October 23 2008 / by Garry Golden
Category: Energy Year: 2010 Rating: 2
General Electric is taking another step into the growth sector of energy storage by investing $30 million in A123’s $102 million Series E financing, making it the battery manufacturer’s largest single cash investor – at 9 percent ownership. The investments were made by GE Commercial Finance – Equity and GE Energy Financial Services, bringing GE’s combined total investment in A123Systems to $55 million.
What does GE see in storage? A way to manage production?
GE is already one of the world’s leading power generation equipment providers, so why invest in batteries and storage?
GE’s executives must see clear growth ahead around demand for storage to support growth in wind and solar power generation, utility companies trying to build more robust ‘smart grids’, and to help the automobile industry as it moves the world’s fleet away from liquid fuels and the combustion engine.
If GE is able to expand alternatives for energy storage through better batteries, fuel cells and capacitors- it could expand growth around its own wind turbines, solar panels and hydrogen production appliances.
In a decade GE might be a leader in emerging classes of distributed ‘energy appliances’ involved in on-site storage and power generation, not too mention a potential brand name for powering electric vehicles expected to hit showroom floors after 2011.
A123 Mixed Week of News
A123 has had a lot of recent press coverage around its nanostructured rechargeable lithium-ion batteries that provide power density, low weight, and low cost without sacrificing safety issues caused by overheating. But the startup must figure out a way to compete against strong incumbents in the energy storage sector.
Earlier we covered General Motor’s decision to skip A123’s batteries for a Detroit based unit of LG Chem to provide batteries for the Volt.
GE’s investment could help to balance out this weeks’ bad news.