Q&A: Inside GE's battery business
Earlier this month, General Electric marked the official grand opening of its energy storage manufacturing business -- a 220,000-square-foot facility that will make its flagship Durathon battery -- by doubling down on its investment.
The company, which spent a decade and $100 million developing a sodium nickel chloride battery that could be used in a broad swath of industrial applications, including hybrid railroad locomotives, telecom and renewable energy, announced plans to invest an additional $70 million to double capacity.
GE Chairman and CEO Jeff Immelt has high hopes for the Durathon. His publicly stated goal: to generate $500 million in annual revenues by 2015 and sales of $1 billion by 2020.
SmartPlanet caught up with Prescott Logan, general manager of GE Energy Storage, to find out the story behind the company's new Durathon battery, where its greatest market opportunities await and why it pursued this technology to begin with.
SmartPlanet: Is this GE's first foray into batteries?
Prescott Logan: If you go back to the early 1900s, Edison did a bunch of work with lead-acid batteries and automobiles. So, really the roots of interest have always been there.
In the late '70s and early '80s, GE, along with the Department of Transportation, did a whole bunch of work with sodium sulfur batteries, which contained a little bit of a different chemistry than our battery today. And I think a lot of that was driven by some of the things occuring in the '70s with oil, and so forth.
From a technology perspective, we have a group in our global research labs, who have done work since the '70s and early '80s on batteries. There's a basic competency in our labs and we sort of tapped into that group about 10 years ago.
SP: So, what prompted GE to get back into energy storage a decade ago?
Prescott Logan: There's two pieces to the story.
Our transportation business in 2000 and 2001 began to fund investments in the development of hybrid technology that could be used on the types of large industrial motive applications that our transportation business unit plays in: mining trucks, locomotive, marine work boats, that kind of thing.
The big technical challenge was what do you use for storage technology? Lithium-ion has been all the rage for passenger vehicles. But when you're talking about big industrial applications that go into some of the worst environments in the world as far as temperature extremes, dirt and dust -- the lithiums didn't work.
So there was a big effort that went on at our research labs evaluating a whole bunch of different chemistries over about five or six years. During that time, our sodium metal chloride battery technology that we now are commercializing, kept rising to the top of the list.
We realized if we were serious about it, we were going to have to participate in the value chain or the manufacturing of it because there really were no big capable suppliers of the technology at the time.
In 2007 and 2008, we got more and more serious about it. We also got smarter and realized the economics of this technology really didn't make sense at the scale that we were talking about using for our own GE transportation application. We needed to get more volume into the factory that would make sense to build. So we started looking at other applications and really liked what we saw on a business case and started to gather and establish a standalone energy storage business.
So, the initial impetus for this was this program out of GE transportation to develop a hybrid technology. But as the business case started to come together for a standalone business there was a sort of an infusion of vision; a vision that batteries and storage technology were going to be an important part of the energy ecosystem of the future. That this is the kind of thing GE should be doing.
SP: Why did GE ultimately go with this battery chemistry?
At GE we make industrial stuff that's got to last. We really placed a premium on this technology. It's rugged. It's a sealed battery, which means it's not impacted by temperature extremes. You can put it in extreme heat, extreme cold and it will perform the same way.
Dirt; dust; none of those things impact it. It's pretty robust in terms of shock and vibe. We also like the fact that it has a long cycle life; it's roughly eight to 10 times the life of a lead-acid battery. The energy density was also really important. It's smaller and lighter than conventional technologies.
And later, on top of all that, it had pretty good recharge properties. It was something that looked like it could make a lot of sense.
We felt that, obviously, the economics behind it made sense, at the right scale. It was technology worth betting on.
SP: What are the best market opportunities for the battery? And which markets will GE pursue first?
Prescott Logan: Our launch focus is on the telecom and grid storage markets. In telecom, we're putting batteries as back-up power in cell towers around the world, specifically focusing on the emerging markets where the electric grid is not as reliable. So we'll be sending batteries to places like Nigeria, Kenya, Indonesia and Vietnam. Our second focus will be in the grid storage market.
In the second half of next year and beginning in 2014, you'll see us launch into two motive applications that we're currently finishing up some piloting and development on.
In 2014 and 2015, there will a couple of other things that are on the horizon. I see us eventually having a fairly nicely balanced set of applications that allow us to play in a number of different markets with a really geographic spread. A lot of what we're going to be selling here in New York will get shipped abroad, so that's great.
SP: The battery doesn't put off a lot of waste heat, which would seem to make it a good candidate for data centers. Is GE pursuing that market?
Prescott Logan: It's a sealed battery. It's actually a hot battery that operates at about 300 degrees Celsius and it's sealed within its package, so if you touch the outside of the package it might have a slightly warm to ambient temperature. But you can touch it and it's safe.
We have looked at data centers. It's something we think could really change the game in that space. We have maybe de-emphasized our focus there right now because we think there's a bigger pull coming from some different markets instead.
And the data center market tends to be very careful about what they introduce and how they go about doing so because the whole game is about availability.
Photo: GE
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This post was originally published on Smartplanet.com