It's the electrical equivalent of a free lunch, at least according to Xtreme Power.

The company has created a battery-basedstoragesystem for wind farms and solar parks that can also provide grid balancing services, according to CEO Carlos Coe, who will also speak at the Networked Grid conference taking place tomorrow and Wednesday. Using Xtreme's systems to turn a wind farm from an intermittent source of power into a well-managed source of power would add approximately 0.5 cents to 1 cent per kilowatt hour to the cost of the power flowing from the wind farm.

"The maximum would probably be as much as 2 cents per kilowatt hour," said Coe in an interview. "The cost of making wind or solar a stable power source is not that expensive."

The storage facility itself makes the power plant more valuable because it dampens the inherently intermittent output of wind and solar, he said. The cost of storage system, however, can also be absorbed almost completely if the local utility also wants to exploit it during peak power alerts or dragoon it for voltage regulation. In the right circumstances, the storage array becomes a profit center.

"Grid balancing services can more than offset the cost of putting it in. It will be a major functionality," he said. "As a grid asset it has its own revenue stream. [...] It will make most of its money from providing grid regulation services."

"What we are competing with in that regard is single and combined-cycle natural gas plants," he added. "What we are able to do is large-scale power manipulation. In essence, we can digitally control power."

Coe, among others, will describe their strategies for adding storage to the grid during a panel at the conference. 

The company has won four contracts to insert its storage system into wind parks in Hawaii. The latest deal involves a 10-megawatt storage array for a 21-megawatt wind farm in Hawaii. Exploiting these storage arrays for grid balancing is a foregone conclusion. Hawaii has put forward a plan to shift from getting most of its power from diesel generators to getting 40 percent from wind and solar. In all, Hawaii wants to get 60 percent of its power from renewable resources.

Customers can buy storage systems outright or they can get the systems installed under storage-as-a-service contracts, which is becoming increasingly popular in the storage world. The technology can also serve as long-term power storage, similar to pumped hydro storage, as well as short-term storage, like a flywheel. Other competing technologies include flow batteries and sodium batteries.

Coe won't say what the core battery technology is -- others such as Xtreme investor Tom Cain have said it is fiberglass -- but he emphasized that it is solid.

"There is no free-flowing liquid, not gel, no paste," he said. The key to the material is that it has almost no electrical resistance, which means very little waste heat or energy lost in charging and recharging.

The battery was originally developed by Tracor and Ford Aerospace in the early '90s to go inside electric cars. After that wave of EVs died, Ford put the technology on the shelf. Xtreme spun it out and finalized development in the past few years. Another note: the old batteries can be recycled. AES Energy Storage just recently unfurled an 8-megawatt storage facility in New York state that will grow to 20 megawatts this year, while Beacon Power has erected a flywheel park in that state.

The company, however, does not like to refer to its products at batteries. It sells systems, he said a few times, which includes software and controls.

Sam Jaffe, research manager for renewable and distributed energy strategies at IDC Insights, says that the technology is compelling but the cost targets might be a bit premature.

"I have confidence that Xtreme can get production costs at scale to $500 per kilowatt hour, based on discussions with people who know the company well. But 'at scale' is the key term. They were supposed to build a factory in Michigan that could produce a gigawatt per year, but that didn't happen," Jaffe wrote. "They are not selling their battery systems for $500/kWh today, that's for sure. The Hawaii project is probably priced at four to six times that."