GE Builds Energy Storage on Successful Wind Business Model

General Electric is building its energy storage business based on its wind energy success.
Published: Sat 10 May 2014

General Electric plans to develop its battery business to the level of its wind business and investment in technology is going to get the firm there. This is according to Todd Alhart, Director Media Relations at GE Global Research, who spoke to Engerati recently.

New technologies and opportunities are key to success

The reliability and performance levels of the wind turbines have improved significantly, thanks to the integration of new technologies and this has been the key to General Electric’s wind business success, explains Mr Alhart.

He points to the Durathon battery which was built with “great technology” and is, as a result, differentiating itself from other batteries in the storage market based on reliability and performance. Mr Alhart explains that no other battery can withstand extreme weather conditions in the field.

The company is also being smart about finding business opportunities where the battery is uniquely positioned to deliver solutions, explains Mr Alhart. A good example of this is battery systems to support back-up power for cell towers in remote regions of the world like Africa. Many of these systems run on diesel fuel which is costly and is not environmentally friendly. By integrating General Electric’s battery into these systems, tower operators can cut their diesel fuel costs in half and reduce unnecessary carbon emissions.

Overcoming industry challenges

Start-ups face a number of setbacks and obstacles but having the research team so close to the physical plant has been a real advantage for General Electric, explains Mr Alhart. It has enabled the company to resolve issues much faster than they would otherwise be able to fix, he explains.

Building a customer base can often be difficult but the firm discovered two great launch opportunities to do this by offering solutions in the telecommunications and grid spaces.

“As we sell more products into these markets, we can build up our production base and capacity to scale. This will position us well as new market opportunities such as the hybrid locomotive arise down.”

Exploring options

We asked whether General Electric is exploring other energy storage solutions apart from its Durathon model. In response, Mr Alhart explained that the company is continuously exploring and monitoring other emerging storage technologies.

“Some of this takes place in our labs experimentally and some of it happens through strategic GE Ventures investments in startup business.”

For the latter, he explains that the firm provides mentoring to help emerging companies anticipate and work through technical and business challenges.

Cutting costs and improving efficiency

Energy storage solutions still seem to be quite expensive. We asked General Electric how they intend to bring these costs down in order to remain competitive.

He explained that their batteries use fundamental materials such as sodium and nickel which are not inherently expensive. He added: “We also believe we can drive down costs on the production floor itself by creating a factory that is world-class in efficiency and has high production yields. “

During his talk at the NY-BEST Energy Storage Conference, Mark Little, Director of Global Research, discussed how General Electric’s Battery Plant has been a model for smart manufacturing at work. The Plant has over 10,000 sensors which monitors everything including temperature, humidity, air pressure and machine operating data. With the swipe of a finger on a Plant manager’s i-Pad, machine malfunctions can be avoided or adjustments in processes can be made quickly.

Says Mr Alhart, “We continue to build and enhance this model to push higher levels of efficiencies and drive down production costs.”

General Electric’s focus

The firm’s power grid efforts are broadly-based and include renewable integration, grid scale services, behind the meter energy management, as well as microgrids.

General Electric is also venturing overseas in search of areas that need energy storage solutions. Opportunities in Europe and Asia are growing, explains Mr Alhart.

We asked if General Electric will be focusing on stationary energy storage for commercial and residential needs. In response, he said that these markets are interesting and that storage can most definitely offer a “unique solution.” He added that in established grids, storage should improve efficiency, reliability and security. These benefits can help motivate customers to stay on-grid. He adds that in emerging markets, storage can help to influence the design and construction of whole new business models.

Mr Alhart points out that with General Electric’s portfolio of energy solutions the firm is positioned to lead these changes.

We asked Mr Alhart if he thinks energy storage development will go the same way as solar photovoltaic-oversupply of cheap technology and low cost installations. He responded by saying that General Electric recognizes that the market is growing fast and that there is plenty healthy competition. In response, the firm intends to differentiate itself on performance, safety, reliability and system solutions that create “the greatest value” for their customers.

In conclusion

Mr Alhart says that the firm is excited about the opportunities that lie ahead for its Durathon battery, as well as the prospects for energy storage in general.

“As we look at major trends such as renewables integration, grid resiliency, and transportation, energy storage has a critical role to play in advancing each. It will provide a nice runway of growth to building a business that achieves the kind of success GE’s wind business has experienced.”