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Ener1 Partners With Russia’s Federal Grid Company to Develop Grid Energy Storage Opportunities

Li-ion manufacturer Ener1, Inc. signed a memorandum of understanding (MOU) with Russia’s Federal Grid Company (FGC) to help develop new opportunities to use high-performance battery systems to improve the reliability and performance of the Russian electricity system, which is facing record setting demand on an aging grid.

Rapid introduction of smart grid technology combined with energy storage capabilities is seen as a crucial tool for building a robust and modern system. Russia is the world’s fourth-largest electricity market, and is currently embarked on an intensive multi-billion-dollar effort to upgrade and improve its utility network, which has seen two decades of deferred investment.

FGC operates power grid equipment in 73 regions of the Russian Federation, with 118,045 km (73,350 miles) of electricity transmission lines and 758 sub-stations with a total installed transformer capacity of more than 286,000 MVA, with voltage ranging from 35-1150 kV.

Last February, FGC announced plans to invest approximately $15 billion through 2012 to modernize its transmission infrastructure, including construction of additional 8,419 km (5,231 miles) of transmission lines and 28,933 MVA of installed transformer capacity.

The company estimates smart grid technologies in Russia will reduce electricity losses by 25%, and reduce usage by as much as 35 billion kilowatt hours per year, for savings worth more than $1.6 billion annually.

To fund the massive undertaking, FGC was given authority by the Russian federal government to increase prices it charges electricity generators by 51% in order to reflect with real world delivery costs. Overall investment in Russia’s electricity sector has increased more than eight-fold since 2005, according to the Ministry of Energy, which predicts that the country will spend $20 billion in 2010 alone to improve generating and transmission systems.

The memorandum of understanding between the two companies was signed at the fourteenth annual St. Petersburg International Economic Forum, which gathers global business leaders and top officials of the Russian Federation. This year’s session highlights the Russian government’s new emphasis on technological innovation as the key to economic modernization.

Cooperation between US and Russian companies on energy efficiency and smart grid development is also a focus of the bilateral Presidential Working Group formed last year by President Barack Obama and President Medvedev. That group is co-chaired by US Energy Secretary Steven Chu and Russian Energy Minister Sergei Shmatko, and will hold its next meeting in Washington, DC in July.

Battery storage systems are a readily scalable and rapidly deployable way to serve Russia’s large, remotely located load centers, as well as its densely packed urban environments where rapidly rising demand due to the country’s growing affluence is stretching distribution networks that, in some cases, haven’t been improved since the Soviet era.

FGC was formed in 2002 in conjunction with a reorganization of Russia’s national electric power industry. FGC is listed on Russian stock exchanges and is approximately 78% owned by the Russian federal government.

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