A123 Systems hooks into China’s grid

Only 72 percent of China’s wind-power sources are connected to its grid — meaning there’s a good deal of wind turbines that are spinning that aren’t providing usable clean power. Battery maker A123 Systems (s AONE) hopes its first deal in China can help with that problem, and on Tuesday it announced that it will be supplying a 500 kW lithium-ion battery demo system to one of China’s top wind makers, Dongfang Electric Corporation.

Donfang will install the energy storage system at a factory in Hangzhou city, China Zhejiang Province, and will use it to evaluate how to better use energy storage to integrate wind power onto the grid. Wind power is a variable source — it’s only available when wind blows — and it needs energy storage tech to provide needed capacity to level the ups and downs.

In particular in China there’s the problem of something called “Low Voltage Ride Through,” (LVRT). When wind dies down and there’s periods of low voltage, the wind systems disconnect from the grid, and then are slow to reconnect. A123 Systems says its energy storage management systems are uniquely designed to help get generation back up on the grid quickly.

Rob Johnson, A123 System’s VP of energy storage, told me that the pricing of the battery systems are around $1,000 per kilowatt installed. Not exactly cheap when compared to lower end batteries like lead acid batteries. But Johnson says lithium ion batteries, and specifically A123’s, are better suited to integrating wind on the grid, and can provide the short bursts of power and the high life cycle needed.

China could be the largest grid storage market in the world, says Johnson, given its pledge to construct gigawatts of wind and solar power. And A123 Systems hopes its small demo project — its first foray into the country — will turn into a much bigger deal.

In the wake of a slow ramp up of electric vehicles, A123 Systems has increasingly been looking to the power grid for revenues. So far, it has scored several deals with power company AES, including a deal to provide battery storage as grid regulation for a 500 MW power plant in northern Chile.