Title: Beacon Power - Massachusetts innovators seek to solve renewable storage problem

Industry sector: Energy storage

David Marcus, CEO of General Compression Inc., believes his company’s innovation can solve a major problem facing wind powered-turbines – how to store excess power. Marcus said his company has been engineering a new technology for two years that involves storing excess wind power as compressed air.

Battery storage systems are currently cost-prohibitive so most often wind power has to be used when it is available. That allows for a lot of renewable power to go to waste when the wind is blowing particularly hard or at night when demand for energy is lower.

“There is not a real mechanism in the marketplace for storage services but there is a mechanism for firm power contracts,” said Marcus. “Our goal was to start a business that allows wind to be stored for long periods of time and allow it to compete for those power contracts.”

Energy providers that are contracted to firms must have electricity available at all times. General Compression has worked hard to make its offerings attractive to investors. Originally, the firm constructed wind turbines of its own and attached the proprietary storage systems but this was a costly proposition to potential investors. Those that did sign in with General Compression asked them to develop the technology further before making the rounds to raise the capital needed to market it.

In 2007 General Compression was able to raise nearly $10 million in capital investment. The company employs about a dozen people. Its resurgence as a potential solution to the problem of renewable power storage shows that major players within the energy industry are listening or are ready to listen.

The new administration in Washington has helped also. New regulations will require huge amounts of renewable power to be integrated into America’s power grid.

“The bottom line is, people are starting to realise that storage is going to be a major component of a smart grid,” said Brad Roberts, executive director of the Electricity Storage Association, an industry trade group. “What’s amplifying this is as the amount of renewable energy in the system goes up the impact on grid operations starts to become more obvious.”

Technology strategies for storage of renewable power vary widely – many companies are concentrating on more efficient and cost-effective batteries while others, like General Compression, are going a completely different direction. Beacon Power, for one, has designed large flywheels as a storage solution.

A big challenge for start-up companies is the costs involved. Beacon Power is seeking a $46.7 million grant from the U.S. Department of Energy to build two 20 megawatt systems in New York. It has a backup plan to sell $60 million in stock if the grant isn’t awarded. Beacon Power has also lobbied for legislation that would allow renewable energy developers to receive tax credits for investing in storage units.

Now that the industry is focusing on how to store excess wind power, General Compression is able to raise capital again for the first time in two years. The new cash infusions will fund pilot projects either in Colorado or the Texas panhandle, where wind power is plentiful.

Despite the attention from the energy industry, Marcus won’t rest until he starts building. “What I really want is to build projects,” he said. “That will put a smile on my face.”