by Debra Fiakas CFA
A few years ago General Electric (GE: NYSE) built out a manufacturing facility in Schenectady, New York for its sodium-ion batteries. CEO Jeff Immelt declared the company a contender in the energy storage industry. He projected that the company could ring up $500 million in annual sales by 2016, and build to $1 billion a year by 2020 by providing energy storage to utility-scale alternative energy projects. Reality has been a bit different than Immelt’s vision. GE ended up shuttering the plant in the Fall 2014, and all but fifty employees were finally laid-off or reassigned in early 2015.
GE’s foray into the energy storage market appeared to be over before it began. Energy industry watchers began an autopsy on GE’s sodium-nickel-chloride battery chemistry that had been used in large train batteries. Others focused on the poor economics of distributed solar and wind power compared to the persistently low prices for centralized natural gas powered power plants.
Then to my surprise, what did I see on GE’s web site in early July 2015 – recruiting notices for forty-eight new jobs in Schenectady, New York! Is this GE’s restart in the energy storage industry?
Indeed, GE is looking for a mix of new employees to work at its battery production facility in positions such as ‘senior electrical engineer’ and ‘energy storage engineer.’ There are some administrative job openings as well.
It appears GE never left the energy storage market. Instead, it seems leadership took a ‘practical’ pill. In April 2015, the company won a contract to supply Con Edison Development with an 8-megawatt-hour battery storage system at a solar project in California. The system will incorporate GE’s Mark IVe control system, GE’s Brilliance MW inverters and GE’s performance guarantees (possibly the most important feature). What the system will not include is GE’s Durathon sodium-ion batteries. GE will be outsourcing or acquiring lithium-ion batteries for the projects.
On a roll with its new approach to the energy storage market, GE won an order in May 2015, to supply a 7 megawatt-hour battery storage system for the Independent Energy System Operator in Ontario, Canada. Convergent Energy + Power is the system integrator. The batteries will be lithium-ion technology.
GE’s spokespersons have been careful to support the company’s Durathon battery, maintaining it will still have a place in GE’s energy storage business. Durathon batteries are installed at an operational wind farm in Mills Country, Texas. Southern California Edison is also incorporating Durathon batteries in a field demonstration of a permanent load shifting application. Princeton Power Systems is the integrator of the project, which is located near Santa Anna, California.
Where will GE source the lithium-ion batteries for the California and Ontario projects? So far, spokespersons have been non-committal on the name. GE has had many bedfellows in the energy industry over the years – some strange and a few obvious.
In the next few posts, we will look at both the strange and the obvious in lithium-ion battery storage.
Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries.
Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.