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A123 Systems plugs lithium-ion batteries into power grid

First power tools, then cars and planes, and now the power grid. A123 is now working with utilities for "grid stabilization," or short-term storage.

A123 Systems has signed on electricity utilities to use its lithium-ion batteries for short-term energy storage, according to a company executive.

The company, spun out of the Massachusetts Institute of Technology, is a closely watched venture that is best known for activity in the auto and power tools markets.

It is working with General Motors for plug-in hybrids and Think for all-electric town cars. A123 Systems also owns Hymotion, a company that converts hybrid cars to plug-in hybrids.

But lithium-ion batteries, already used in millions of consumer electronics devices, can be plugged into the electricity grid as well, according to the company.

A123 Systems is working with investor General Electric to use A123 batteries for "grid stabilization," said Ric Fulop, founder and vice president of business development, on Tuesday. He spoke on a panel of energy storage experts organized by the New England Clean Energy Council.

Utilities need power for short periods of time--it could be as short as several seconds--to ensure that the power supply matches the demand. It's a multimillion dollar market, Fulop said.

"(Our batteries) take our batteries and make the grid a hybrid similar to what we do in a car," Fulop said.

He declined to provide more details on how their batteries are being deployed or how many except to say they are already in use. A company spokesperson was not available to further comment on A123 Systems' work with utilities.

Right now, there are not many storage devices used on the U.S. power grid. But interest in energy storage is growing as utilities look for alternatives to building new power plants to meet peak demand. They are also seeking ways to incorporate solar and wind power onto the grid, though they are intermittent sources of energy.

Fulop said that batteries can meet utility needs for grid stabilization, where a large amount of electricity is needed for a short amount of time.

"The technology can do it. Now it's a question of building the systems," he said. "Megawatt-level systems are all about systems integration."

In addition to batteries, utility-ready energy storage systems require electronics and thermal management systems, he said.

Fulop noted there are a number of challenges to getting new storage technology used by utilities.

Financing large projects is difficult, and utilities are hesitant to work with a technology that does not have a 15-year track record. As a result, he said that venture-backed start-ups are more or less closed out of the market, which is why A123 Systems is partnering with GE.

Still, he predicted that some early adopters of battery storage will yield positive results over the next three to five years. Other alternative to batteries for short-term storage and stabilizing the grid's frequency are flywheels or different types of batteries.

"I think we will see a lot of deployments in the next few years that will change how the grid works," he predicted. "Then we'll see utilities jump on the bandwagon."