General Electric Oil & Gas (NYSE: GE) has signed an exclusive global licensing deal with Highview Power Storage, a U.K. startup that makes utility-scale liquid air energystoragesystems.

The agreement is just the beginning of an early demonstration phase, according to a GE spokesperson, and will explore the opportunity to integrate Highview’s LAES technology into GE’s natural gas peaker plants.

“Highview’s readily available LAES technology, with its ease of implementation and access to an operational pilot plant, makes it an ideal partner for GE Oil & Gas to provide fully integrated energy solutions to our customers,” Luca Maria Rossi, product management general manager for GE Oil & Gas’ Turbomachinery Solutions business, said in a statement.

Highview’s technology uses liquid air or nitrogen to provide long-term energy storage and doesn’t have the geographic restrictions associated with pumped hydro or compressed air.

Excess or off-peak electricity is used to power an air liquefier to produce liquid air. The liquid air is then stored in tanks at low pressure. When the energy is needed, the liquid air is pumped to a high level of pressure and is heated to a gas state. The gas is then used to drive a turbine.

Highview’s technology is an ideal fit for gas peaker plants, but can also be used with liquefied natural gas and industrial waste heat sites, according to Matthew Barnett, head of business development for Highview.

The technology requires some form of waste heat to increase its round-trip efficiency, which is the measure of how much energy comes out of the process compared to how much is put in. Heating liquid air by itself has a round-trip efficiency of only about 50 percent, CEO Gareth Brett told Greentech Media in 2012, but that figure gets closer to 80 percent when combined with waste heat from a power plant or industrial process.

For peaker plants, the storage technology makes the plants even more flexible, allowing them to both absorb and supply energy. LAES does not have the extremely fast ramping time of batteries or flywheels, but can improve the startup time of a peaker plant, cutting it from about ten  minutes to about two to five minutes.

Unrelated to the partnership, both GE and Highview were chosen last month by the U.K. Department of Energy & Climate Change to work with recycling and renewable energy company Viridor to build a 5-megawatt, 15-megawatt-hour LAES demonstration plant at a Viridor landfill gas-to-energy plant in the U.K. The £8 million ($13 million) government-funded project will begin operation in spring of 2015.

Highview also has an agreement with German industrial gas company Messer Group, although that partnership is more about accessing Messer’s expertise in industrial gases than it is about project development.

The partnership with GE, on the other hand, gives Highview access to a global supply chain. Currently, the startup is working with GE on technology integration. No other pilot projects have yet been announced.

Highview is eager to expand into the U.S., where the 1.3-gigawatt energy storage mandate in California is attracting various technologies. The startup’s costs at the SSE plant outside of London have remained at about $1,000 per kilowatt, or about $500 per kilowatt-hour of energy stored, which is cheaper than current battery grid storage.

For the past three years, Highview has had a grid-connected 350-kilowatt, 2.5 megawatt-hour pilot plant with Scottish & Southern Energy next to the utility’s 80-megawatt Slough Heat and Power Biomass Plant just outside of London.

Highview has raised around £17 million ($28 million) to date and is currently going through an investment round that could bring that figure to about £20 million ($33 million).