GTM Solar

Clean Energy Espionage Case Heads to China’s Supreme Court

Stephen Lacey — 2013-05-24T15:06:55+00:00

There's a new legal development in the corporate espionage dispute between AMSC and the Chinese wind turbine supplier Sinovel.

China's Supreme People's Court said it will review two civil suits AMSC brought against Sinovel for stealing its proprietary software in 2011. (The employee who stole the software and sold it to Sinovel admitted guilt and was sentenced in Austria.)

One of the cases involves a cease-and-desist order, along with $6 million in damages. The other involves copyright and $200,000 in damages. These damages are small compared to the total $1.2 billion that AMSC is seeking through four lawsuits, an arbitration case and a trade secrets case.

Both of these civil suits have moved further up the courts as Sinovel fights the charges. They've finally landed in the highest court in China -- a big development for AMSC and a major milestone for ongoing international trade disputes between the U.S. and China.

"The outcome of this case will send a clear signal to companies about whether or not they can invest in China," said Melanie Hart, an expert on Chinese energy policy at the Center for American Progress, in an interview. Hart has monitored the AMSC case closely and has been talking with all parties involved.

As intellectual property theft soars in China, Communist Party leaders have said they want to do more to protect companies and encourage foreign investment. But Chinese leaders still haven't sent any strong signals about their willingness to act. The AMSC case could be their first chance to do so.

"Businesses have long been concerned about bringing their 'best and brightest' to China because of intellectual property theft. This case will show us whether things have improved, as Beijing claims," said Hart.

The saga over the theft of AMSC's intellectual property by a Chinese wind company has everything a gripping story should: espionage, money and politics.

In 2011, AMSC was riding high on the Chinese wind market, supported mostly by one of China's largest wind turbine suppliers, Sinovel. But in March of 2011, Sinovel abruptly stopped taking orders. With Sinovel representing nearly 70 percent of AMSC's business for components and electrical-control software, AMSC's stock tanked and wiped out more than 80 percent of the company's value by the fall of 2011.

AMSC soon realized that an employee had sold its proprietary voltage-control software to Sinovel, allowing the Chinese company to use a pirated version in its turbines. The employee eventually admitted to his corporate espionage and was sentenced to a year in prison.

But the case drags on in China, where Sinovel is extremely well connected in the Communist Party. One of the company's largest investors, New Horizon Capital, was co-founded by the son of China's former premier, Wen Jiabao.

Because Chinese judges report directly to the communist party, a ruling on the AMSC case will be a political signal as much as a legal one.

"There's no independent judiciary, so Chinese courts operate different ways depending on the politics," said Melanie Hart. "If a Chinese company is very connected, that makes it very tough to get a fair hearing. If you have party leaders who tell judges to decide this according to law, the court can rule fairly. It has a lot to do with politics."

Although Sinovel is well connected, the AMSC case is one that the Obama administration has talked about with top Chinese officials. And there may also be new political pressures to rule fairly on the case as China and the U.S. reportedly work on settling ongoing trade disputes over solar manufacturing.

"In a U.S. court system, this would be a clear and easy win for AMSC," said Hart. "Chinese leaders are now very aware of this case. But if you can't win in a Chinese court with this much of a smoking gun, that sends a bad message to companies."

Political influence is guaranteed in the Chinese courts, said Hart. At issue is what kind of political influence Communist Party leaders will exercise given international pressures over intellectual property rights and clean energy trade.

Podcast: Understanding America’s Seismic Energy Shift

Stephen Lacey — 2013-05-24T10:55:37+00:00

America is undergoing a seismic shift in energy. We are now producing more oil than at any time since the early 1990s; we are awash in natural gas, which is helping push coal out of the market; and we have doubled renewable electricity in the last four years.

Coupled with dire climate challenges and a shifting geopolitical landscape, there's a lot of change underway in energy. But this era isn't necessarily unique, explains Michael Levi, a senior fellow at the Council on Foreign Relations. In this week's podcast, we'll discuss the realities of America's current energy transition -- and how it compares to previous eras of uncertainty.

Our weekly podcasts let you hear from industry experts, GTM research analysts, editors, reporters and other special guests. Don't forget to subscribe to this podcast on iTunes to get automatic downloads whenever we post a new show. You can also subscribe to our RSS feed here.

Power in the Desert: Ivanpah on the Verge

Earthtechling, Pete Danko — 2013-05-23T19:53:16+00:00

The giant Ivanpah solar thermal project in the Mojave Desert is now 92 percent complete, developers said this week. The 377-megawatt project consists of three 459-foot-tall towers encircled by arrays of garage-door-sized mirror sets. Those computer-controlled heliostats -- 153,990 out of 173,500 of which are now in place -- will reflect the sun onto the receiving towers, heating water to create steam that will drive turbines that produce electricity.

The government-backed project has drawn criticism from some environmentalists, most notably for its impact on a fragile endangered desert tortoise habitat and, more recently, for dust problems linked to the development. But others view it as a remarkable step forward in the search for clean, sustainable energy. Click on the photos below, all taken in early April and provided by developer BrightSource Energy, and see what you think.

{article-slideshow}

***

Editor's note: This article is reposted in its original form from EarthTechling. Author credit goes to Pete Danko.

Grid-Scale Energy Storage on the Cusp of True Market Entry

Eric Wesoff — 2013-05-23T19:00:09+00:00

Energy storage is often called the holy grail of renewable energy. The problem with the "grail" language is that the grail was never located. At least not with a compelling business case.

There is a lot to report from this week's Energy Storage Association meeting, and the approximately 400 engineers, developers, researchers, and utility experts it attracted to Santa Clara, California. This is the kickoff article in a series of energy storage articles. GTM's Jeff St. John attended and has already written about energy storage pioneer AES' integration software and a related move to standardization and plug-and-play batteries from software vendor 1Energy.

I've attended this event over the years. Grid-scale energy storage, which is this event's focus, is still a developing market, and the exhibition floor reveals a market and supply chain still very much in formation.

But, despite the early stage of this industry and its players, I would suggest that the energy storage industry took a noticeable step forward this year. Instead of technical papers on electrolytes, anodes, and hysteresis, the panels and hallway chatter were dominated by:

Lessons learned from energy storage pilots and initial commercial deployments
Integrating energy storage with solar and wind and connecting to the grid
The necessity for big data analytics to effectively shave peak and smooth renewable generation
The need for standards, modeling, software integration and cybersecurity awareness

Confronting these issues, rather than running a technology love-fest, is indicative of an industry coming to grips with its place in the energy ecosystem.

It's been slow going, but the pilot programs are yielding information. Equipment crews at vendors and utilities are gaining experience at deploying substation-sited storage, co-locating with renewables, as well as in domains such as community energy storage and residential energy storage. Regulators at the state and federal levels are listening. And the case studies are starting to show some actual monetizable value from energy storage.

The "behind the meter" energy storage firms such as Stem, Demand Energy, and Silent Power are beginning to post their compelling case studies. We'll be profiling those firms, as well as SolarCity, Isentropic Energy, Beacon Power and many others in the coming days. Stay tuned; there's a lot to cover.

In the meantime, here are a few stray observations:

Solar is interested in storage; First Solar and SunPower technologists were in attendance.
I did not see a single VC investor at the event. And I couldn't find one on the attendee list, either. Are VCs done with energy storage? Vinod Khosla did not show.
Darrell Hayslip was named the next Chair of ESA. Hayslip headed the development of the the 36-megawatt storage system for Xtreme Power at the Duke Notrees Windpower project.
The two largest installers of on-grid residential and consumer energy storage in California are not pure-play energy storage firms. Who are they?

Solar Developer Tioga Energy Winds Down Operations

Eric Wesoff — 2013-05-22T15:28:59+00:00

Sadly, Tioga Energy has joined the List of Deceased Solar Companies.

Tioga, a VC-funded commercial solar developer, is winding down its business, becoming another casualty of the solar market shakeout.

Downstream commercial is perhaps a more challenging market than the thriving residential solar business of SolarCity or Sunrun.

Paul Detering, Tioga's longtime CEO, told GTM, "Our approach to the commercial DG space required a strong (big) balance sheet, and we went out to the market for that in the second half of 2012. A couple of months ago, when it became clear that we were not going to close on a transaction in a timely fashion, we decided to go ahead and sell the operating and pipeline assets in an orderly fashion and wind down the operations of the company. That is in progress and going well. The assets are performing very well and there is a lot of interest in strong, well performing operating assets."

Detering praised his team for earning customer trust and building overperforming projects.

One of Tioga's projects brought 3.3 megawatts of solar to 30 sites across New Jersey’s Union County, spanning schools, libraries, and a community center in a large public-private partnership. All 30 of the installations survived Hurricane Sandy.

Tioga had received more than $44 million in funding from MEMC, NGEN Partners, Nth Power and Draper Fisher Jurvetson since its founding in 2007.

Zep Solar’s Installation Hardware Goes Rail-Free

Herman K. Trabish — 2013-05-22T15:00:05+00:00

An unnamed solar company won praise for its technology during SolarCity's recent Q1 2013 earnings call.

“One of the biggest kind of step-function changes that is currently underway is the movement away from rail-based installation hardware to installation hardware that doesn’t depend on the rail,” SolarCity (SCTY) co-founder and CTO Peter Rive said in answer to a question about cost-cutting innovations in residential rooftop solar.

Rail-free installation facilitates that step-change in installation time and costs, Rive explained, because it “dramatically reduces the number of cutting, drilling and transportation operations that are required in order to be able to install solar.”

“That is Zep Solar,” Zep Executive VP Daniel Flanigan said. It is a matter of public record, Flanigan explained, that both SolarCity and Vivint Solar, another of the biggest U.S. residential rooftop installers, use Zep technology.

“Zep is basically, though not categorically, the only rail-free system supplier, Flanigan said. There are niche rail-free applications, but for the bulk of rail-free systems on typical U.S. homes there are effectively no other providers.”

The GTM Research/Solvida Energy Group report Global Solar PV Balance of System (BOS) Markets: Technologies, Costs And Leading Companies, 2013-2016, sampled 25 of the hundreds of commercial and residential rooftop installation hardware suppliers, highlighting innovations by Zep Solar, Solon, and Solar Flex Rack.

Source: The GTM Research/Solvida Energy Group report Global Solar PV Balance of System (BOS) Markets: Technologies, Costs And Leading Companies, 2013-2016

Based on the market shares of its customers, Flanigan “guesstimated” that Zep Solar supplied about 10 percent of U.S. 2012 rooftop residential installation hardware and is on track to provide 30 percent in 2013.

With Zep technology, Vivint is achieving “previously unheard of levels of installation efficiency,” Flanigan said. The firm is "installing two and sometimes three residential systems in one day with a three-person crew.” Any installer can install “more kilowatts in a day,” he added. “We introduce additional velocity into operations.”

Zep licenses its grooved-frame design to module manufacturers that then produce Zep-compatible versions along with their standard products. Zep’s mounting and grounding hardware locks into the groove. That forms stable module units that don’t require conventional mounting rails, eliminating the logistics and labor of handling them. It also allows for Zep’s auto-grounding and streamlined leveling features.

"Rail-free installation makes the term 'racking' somewhat obsolete,” Flanigan said. “We think of ourselves as an installation technology platform.” Yet Zep’s products and warranties “adhere to industry standard criteria,” Flanigan noted.

Yingli (YGE), Sharp, Trina (TSL), Canadian Solar (CSIQ), Hanwha (HSOL), and Suniva are among the many module manufacturers that market Zep compatible modules, and SolarEdge, Enphase (ENPH), and Tigo all make Zep-compatible power electronics, according to the firm's website.

Flanigan said Zep is continuously “in discussions” with installers that “want to make sure they are not disadvantaged and make sure their cost structure is as good as [those of] their fierce competitors.” And, he went on, “We are working with about a dozen very large-scale installers in some stage of piloting or implementing their transition to the Zep technology platform.”

Later this summer, Flanigan said, Zep will launch a ballasted, rail-free, commercial flat-roof product. “It will be very fast-installing, totally tool-free, and auto-grounding with stackable parts.”

CTO Jack West evolved Zep Solar’s rail-free concept while working as a solar system designer and installer in the late 1990s. The company now has headquarters in northern California and parallel supply chains in the U.S. and the Shanghai area. “We don’t operate factories; we manage supply chains,” Flanigan said.

“After brieﬂy hitting a high of 7.3 gigawatts in 2012, the global residential rooftop market is expected to experience a downturn, staying around 6.2 gigawatts in 2013 and 2014 before seeing a bounce back to 10.2 gigawatts in 2016,” GTM’s market study said, resulting in a 2012-2016 CAGR of 7.1 percent. The U.S. market, it said, “will exhibit a strong 38 percent CAGR between 2011 through 2016, rising to over 1.5 gigawatts in annual installations.”

"Mounting structure suppliers are under a lot of pressure to reduce hardware costs and deliver additional value to their installer customers,” according to MJ Shiao, GTM Research Senior Analyst and co-author of the BOS report. “Solutions that can lower installation time while reducing design effort will have a distinct advantage in the heavily competitive racking market."

GlassPoint Brings 7 MW of Enclosed Trough CSP On-Line in Oman

Herman K. Trabish — 2013-05-22T14:30:55+00:00

GlassPoint Solar is a step closer to proving that its enclosed trough concentrating solar technology is effective at enhancing oil recovery.

GlassPoint is now producing 50 tons of steam per day at its 7 megawatt project in the southern interior region of Oman, according to Business Development VP John O’Donnell. That translates to 110 million British Thermal Units (BTUs) of energy per day and replaces about 1 percent of the natural gas-fired steam used for enhanced oil recovery (EOR) at the Amal oil field.

The project, O’Donnell added, came in on budget and on time, despite its “severely remote” location and the "hardest" of desert conditions.

"Played-out" oil wells hold a third or more of their potential in heavy oil that is not recoverable via conventional drilling and pumping methods. For decades, natural gas has been used to boil water into pressurized steam that, flooded into the well, can turn the oil more fluid so that pumping can keep it coming up.

Concentrating solar installations in California by ARCO Solar, BrightSource Energy, Areva, and GlassPoint proved the technical feasibility of using concentrating solar power (CSP) to produce steam for EOR, but have not yet shown it to be cost-effective.

GlassPoint recently won $26 million in Round B financing from oil giant Royal Dutch Shell (NYSE:RDS.A), as well as RockPort Capital, Nth Power, and Chrysalix Energy Venture Capital, to continue development of its enclosed trough CSP concept.

Solar power tower technology is capable of bringing operating fluids to the higher temperatures needed to make thermal storage possible, and it seems to be siphoning favor away from the older and more proven parabolic trough technology used by GlassPoint.

But the very efficiencies that make power tower technology able to achieve the higher temperatures, GlassPoint CEO Rod MacGregor told GTM, are why trough technology is better suited for EOR. Both a Ferrari and a Ford F150 pickup can pull a trailer, he said, but it is not economic to use the Ferrari.

“If its technology works, the company could benefit from a first-mover advantage into a niche market that could prove to be sizable and attractive,” GTM Research Solar Market Analyst Scott Burger noted.

But with the newfound abundance and consequent low price of natural gas, “the world has turned upside down,” O’Donnell said. To compete in California oil fields, which produce half of the state’s consumed oil, and with half of that from natural gas-driven EOR, solar EOR would have to come in at $3 to $5 per million BTUs.

In the Middle East, however, GlassPoint’s technology gives it several advantages, O’Donnell explained.

The air there is twelve times dirtier than in the U.S. Southwest, making CSP operations and maintenance (O&M) key to productivity, O’Donnell said. Tower technologies’ heliostats have to be cleaned frequently, consuming a great deal of water and labor.

GlassPoint’s aluminum parabolic trough mirrors on single-axis trackers are enclosed in agricultural glass greenhouses that are cleaned robotically, using a process that allows for 90 percent water recovery. And because they have been in use for decades, there is no need to scale-up a supply chain.

GlassPoint’s technology is also designed, MacGregor said, to handle the dirty feed water and harsh low maintenance conditions of an oil field. And GlassPoint’s facilities require less capital and less land because they do not have to achieve the high temperatures required by tower technologies. What's more, the devices are built with materials that do not have to stand up to the harsh desert environment, because they are protected by the glass enclosure.

As evidence that GlassPoint’s technology is cost-competitive in Middle East oil fields, O’Donnell pointed out that Petroleum Development Oman, the project owner, had selected it over competitors in an open bidding process.

“The keys to bringing costs down are speed, certainty and scale,” O’Donnell said. “This little unit is a pilot for larger installations. Those are targeted at the $3 per million BTUs to $5 per million BTUs price of gas in that region, and that is what the technology is developed to deliver.” O’Donnell declined to discuss whether GlassPoint has won future commitments.

Unlike the U.S., where shale reserves and fracking technologies have produced a plentiful natural gas supply, Middle East gas is rapidly being consumed by domestic and EOR needs, O’Donnell explained.

“Other major oil-producing nations in the MENA region, including the UAE, Kuwait, and Saudi Arabia, will continue to face natural gas shortages,” Burger affirmed.

One recent study predicted the global EOR market will be $16.3 billion in 2014. Over 40 percent of California’s century-old oil wells now require enhancement, and that is expected to rise to 60 percent in the next few years.

The real market, MacGregor said, is the Middle East, where a “perfect EOR storm” favoring solar is setting in. Light crude in many Middle East fields is largely played out, he explained, and there is a shortage of natural gas, as well as plenty of sun.

The Smart Meter Stimulus-Cash-to-Integration Equation

Jeff St. John — 2013-05-21T19:03:06+00:00

We all know that the 2009 American Recovery and Reinvestment Act (ARRA) has handed out billions of dollars to smart grid projects around the country, with smart meters, or advanced metering infrastructure (AMI) deployments, getting the biggest share. That's been a boon to AMI vendors like Itron, Silver Spring Networks, Elster, Trilliant, Sensus and Landis+Gyr, and has helped put about 12.3 million digital, two-way communicating electricity meters into the field, out of a nationwide total of some 35 million and counting.

But AMI is about more than simple, standalone automated billing devices attached to every home. To achieve full value, smart meters will have to integrate to lots of utility back-office software systems, grid operations control centers, customer service and workforce management platforms, and many other parts of the utility enterprise. That's a goal of many stimulus-backed AMI deployments -- but how far along are they in the integration task?

To shed light on that subject, we turn to two sets of data out this week. The first comes from research firm Zpryme, which reported Tuesday that, out of $8 billion in Department of Energy grants and matching expenditures across 99 stimulus-backed projects, about $5.1 billion has been spent as of mid-May.

That’s up from about $3 billion as of March 2012, and accounts for just less than two-thirds of a one-time capital infusion that has boosted the smart grid industry’s fortunes over the past few years. And, of the total spent so far, about 63 percent of it, or $3.2 billion, has gone to smart meters. We've been covering the effects of ARRA funding on the U.S. AMI market, as well as the slowdown that has come in its wake.

The second set of data comes from GTM Research’s upcoming report, AMI Analytics: Vendors, Applications and Markets, and takes a look at the core question of AMI integration. According to these findings, utilities still have a ways to go in realizing the potential of their smart meters to do more than just collect bills.

So far, utilities are pretty good at that core function, with 94 percent saying they’ve integrated AMI into their billing systems. (The remaining 6 percent could be early-stage projects that haven’t gone live yet or have been delayed, since without billing, meters are of little use.)

But only 71 percent of stimulus-backed AMI projects have integrated with utility customer information systems (CIS), which would seem like the next logical place to extend smart meter functionality. Seemingly simple tasks, like giving utility phone center operators the data to tell customers whether their smart meters are on or off during a power outage, require this kind of integration to be successful.

Even fewer utilities (54 percent) have integrated AMI with their outage management systems (OMS), which again is a place where knowing whether the meter is on or off could be very useful. And only 51 percent have integrated their AMI with their distribution management systems (DMS) to do things like feed data into volt/VAR optimization schemes, or alert grid operators of grid instability in real time, to name two examples.

It’s important to remember that these figures should climb over time, as more and more utilities move further along in their long-range AMI plans. Oracle surveyed 150 U.S. utility executives in 2012, and found that a good number have begun collecting data for AMI integrations they haven’t carried out yet. For instance, while 78 percent of respondents said their utilities were collecting outage detection data from their smart meters, only 59 percent were actually using it for business processes and decision-making.

Similar gaps were revealed in voltage data, with 73 percent collecting it vs. 57 percent using it; tamper detection data (63 percent collecting it vs. 47 percent using it); and diagnostic data (56 percent collecting it vs. 33 percent using it). Of course, discrepancies like these make some sense, considering that many of these deployments are trying to combine different utility technologies for the first time.

Perhaps the better question is whether all this data collection will support spending more money on full-scale AMI integration. While the urgency of getting smart meters and billing systems working smoothly is obvious, there may be fewer business imperatives pushing the integration of smart meters into all the other platforms that make up the utility enterprise.

Finding these imperatives will be critical for AMI vendors and the smart grid industry in this post-stimulus environment. DOE’s proposed 2014 fiscal year budget calls for only about $450 million in smart grid investment, much of it on the R&D side. As GTM Research senior smart grid analyst David Groarke pointed out in an article this month, this may not be enough to maintain domestic growth in smart meters, both in terms of utilities installing them and vendors supplying them.

Illustrating the Impact of Minnesota’s New Solar Standard

Herman K. Trabish — 2013-05-21T14:59:44+00:00

The Minnesota legislature just approved a solar carve-out in the state’s Renewable Energy Standard expected to drive at least 450 megawatts of solar growth over the next seven years.

The new law requires Minnesota’s investor-owned utilities to obtain 1.5 percent of their power from solar energy by 2020. Of that, 20 percent must be from distributed solar systems of less than 20 kilowatts.

To drive solar growth, the law creates a five-year, $5 million per year fund that will pay performance-based incentives for ten years to system purchasers. The fund will come from payments by Xcel Energy (NYSE:XEL) of $500,000 per cask of spent nuclear fuel that it stores in Minnesota.

In answer to opponents of the solar standard, Institute for Local Self-Reliance State and Communities Energy Program Director John Farrell, one of the leaders in the drive for the new law, created a set of eight slides to illustrate its value. Below are three of his favorites and his thoughts about them.

“The first line for opponents of the solar standard bill is ‘Solar is expensive and it is going to cost a lot of money -- and why does it need incentives?’ so it’s important to tell the whole story,” Farrell explained. “This is an investment. For every dollar of public money put in, Minnesota will get an enormous return in private capital. It is, essentially, private capital building power plants for the public utilities. That’s a really great deal, especially when it also accomplishes environmental and economic goals.”

The solar standard will create about 1,400 installation jobs and about another 100 for operations and maintenance, Farrell said. Because the solar standard law includes performance-based incentives for ‘Made in Minnesota’ solar modules, about 20 percent of the new solar will likely be sourced from in-state manufacturers and the affiliated supply chain, Farrell added. He expects that to produce about 400 direct new jobs. That would likely produce about 2,700 indirect jobs associated with making components and providing services.

Solar’s availability at peak demand times puts it in direct competition with fast-ramp natural gas plants, Farrell pointed out. The California Energy Commission’s cost estimate for building simple-cycle, spinning-reserve, gas-fired facilities like those Xcel would need to meet peak demand is between $0.28 per kilowatt-hour and $0.65 per kilowatt-hour, Farrell said. The cost of rooftop solar in Minnesota is $0.18 per kilowatt-hour.

“The reason solar advocates pushed for a lot of distributed solar in the bill,” Farrell explained, “is because geographic distribution reduces solar’s minute-by-minute variability, making it more effective as a peak demand resource.” In addition, he added, “peak demand rises when the sun is shining. There is a high correlation in Minnesota between when the sun is shining and when there is an episode of peaking demand.”

“My favorite [slide] is the one about rapidly rising retail electricity prices,” Farrell said. “The utilities always talk about how solar is expensive and therefore rates are going to go up. My answer to the utilities is, rates are going up and it is your fault.”

Minnesota utilities have been raising rates at 4 percent per year for a decade, Farrell said. Solar will hit parity and be competitive by 2020, when this solar standard ends.

“A key part of the story,” Farrell said, “is that energy prices are not fixed. When we talk about changing the way we get energy, we are talking about a system that is constantly in motion, and generally that motion is upward price shifts. Solar fits in incredibly well because once the investment is made, the fuel cost is zero, forever."

Eos Raises $15M for Zinc-Air Grid Batteries

Jeff St. John — 2013-05-21T03:47:01+00:00

Eos Energy Storage, the zinc-air battery startup targeting a super-low $160 per kilowatt-hour for grid-scale energy storage, has raised a $15 million Series B round from a syndicate of twenty-one strategic and financial investors, including Fisher Brothers and a big potential strategic partner, NRG Energy.

New York-based Eos has previously raised about $12 million from investors, though it hasn’t disclosed much about its investors before Tuesday’s funding announcement. The startup was originally bootstrapped by founders Michael Oster and Steven Amendola, and has spent the past five years bringing their technology through R&D and lab trials to more recent field tests.

Eos is working with hometown utility Consolidated Edison and five other unnamed partners to test small-scale versions of its battery chemistry and supporting grid interconnections. The company’s goal is a 1-megawatt, 6-megawatt-hour cargo container-sized battery called the Eos Aurora, set to be released in 2014 with characteristics that include long life, fairly high efficiency and a super-low cost of $140 per kilowatt-hour -- a fraction of the price of competing flow batteries, lithium-ion and advanced lead acid batteries on the market.

Eos represents the first energy storage investment for NRG, but the Princeton, N.J.-based energy giant is deeply involved in wind and solar power, plug-in vehicle charging and other green endeavors. “Eos’ technology is of strategic interest to NRG as we seek to enhance the value of our generation assets and evaluate novel energy storage business opportunities,” Denise Wilson, NRG executive vice president and head of its New Businesses unit, said in Tuesday’s release.

Fisher Brothers is a privately owned New York City-based real estate firm which also owns Plaza Construction, a contractor with experience building urban power plants and renewable energy projects. It’s also a co-sponsor with Morgan Stanley of the City Investment Fund, as well as a founding partner of Convergent Energy + Power, an energy storage asset development company with a pipeline of projects in New York, California and elsewhere.

Here’s our previous coverage on Eos.

The company claims its batteries can achieve 75 percent round-trip efficiency, along with a 10,000-cycle, or 30-year, lifetime. That compares favorably to the lifespan of other batteries on the market, and matches the round-trip efficiencies of flow batteries now on the market, though not those of the latest lithium-ion battery chemistries now in deployment on the grid.

But it’s the low price Eos is offering that has utilities and competitors most interested. Eos is targeting a total system cost of $1,000 per kilowatt, or $160 per kilowatt-hour of energy storage for its six-hour system, according to Philippe Bouchard, Manager of Business Development at the firm. Today’s flow batteries are being priced anywhere from $400 to $600 per kilowatt-hour, but at lower efficiencies. Lithium-ion batteries, on the other hand, while offering certain power delivery strengths that Eos doesn’t match, cost $800 to $1,000 per kilowatt-hour and up, he said -- although some Chinese Li-ion manufacturers are targeting $500 per kilowatt-hour.

Part of what makes it so cheap is its use of zinc, Bouchard noted. Zinc is much cheaper than lithium, at approximately $2 a kilogram, with global reserves of 1.9 billion tons and 30 million tons a year in production. That’s made zinc air-based battery chemistries popular, and indeed, many are on the market today -- but almost all in non-rechargeable formats. Getting them to recharge is much tougher, for various complex technical reasons having to do with the way air affects the anodes and cathodes of the batteries.

Eos says it has fixed those cycling issues by using what’s essentially salt water as an aqueous electrolyte in its battery cells, with the ability to amend or refill the system with more liquid as needed, he said. That’s gotten it to 6,000 cycles in lab tests, way beyond other zinc-air-based rechargeable batteries, and on a par with lithium-ion batteries, giving the startup optimism that it will reach its 10,000-cycle goal for its commercial-scale units, he said.

Eos isn’t the only startup promising groundbreaking advances in batteries, of course. On the rechargeable zinc-air front, contenders include Revolt Technology and PowerAir, PowerGenix and Taiwan’s APET. On the more esoteric front, venture investors like Vinod Khosla believe that batteries for the grid will involve new chemistries like Pellion's magnesium ion. Kleiner Perkins is betting on sodium-ion batteries from Aquion, and Kleiner Perkins and Khosla Ventures have also invested in battery startup QuantumScape.

Eos is just in the early stages of real-world testing, Bouchard stressed. The ConEd project won’t actually get underway until 2014, and while Eos expects to unveil other utility partners in the coming months, those projects will also be running on similar timeframes.

That may seem to put it behind competing energy storage vendors like NGK, A123 or Xtreme Power, which collectively have installed hundreds of megawatts of grid batteries to date. At the same time, Eos is taking a slow and steady approach that befits an as-yet-unproven technology, Bouchard said.

“We’ve built this fully transparent relationship with major utilities that are themselves going to be trendsetters for the industry,” he said. “They know exactly what we’re doing -- we’ve given them an in-depth perspective on the technology and how it operates, so there are no surprises.”

At the same time, Eos is still perfecting various parts of its grid-ready storage system, including developing a new generation of its current battery management software (BMS), which monitors the state of each liquid-filled cell within the battery arrays that Eos stacks together for power and energy data, as well as safety, he said. But unlike lithium-ion, which must be carefully managed to avoid thermal runaway, Eos’ aqueous-based, electrolyte-filled cells power themselves down in high-temperature extremes, presenting no fire hazard, he said.

As for what ConEd plans to use Eos’ first battery for, the partners are still looking into various options, Bouchard said. But the utility certainly has a lot of challenges in keeping its mostly underground, highly stressed metropolitan grid balanced, both in terms of delivering power to certain congested corridors during peak demand times and in keeping power quality stable amidst new intermittent generation sources like rooftop solar, he said.

Indeed, ConEd is also working on a broad range of energy storage projects as part of its $181 million in smart grid stimulus grants, including an $18 million project with Brooklyn-based Green Charge Networks to install batteries at 7-Eleven stores and airport EV charging stations to help balance end-use power for grid purposes. With 2012 grid upgrade plans that added up to $1.2 billion (PDF), the utility certainly has a lot of opportunities to look for places where batteries could help it avoid replacing or augmenting the 86 percent of its 130,000 miles of power lines that lie underground, for instance.

The grant Eos and ConEd are using for their pilot is also just part of millions of dollars in energy storage grants given out by the New York State Energy and Research Development Authority (NYSERDA). The state agency has backed everything from flywheel maker Beacon Power’s 20-megawatt energy storage facility in upstate New York (the company went bankrupt, but the facility is still providing frequency regulation to the grid), to startups like Eos and Albany, N.Y.-based BESS Technologies in more recent grants.