A123 Surges on China Grid-stabilization Contract

Christopher Martin, Bloomberg
July 23, 2012 | 5 Comments

A123 Systems Inc., a U.S. maker of lithium-ion batteries for electric cars, surged the most in a month after winning a contract to supply a 2-megawatt system to China's Ray Power Systems Co. to help regulate grid frequency.

A123, based in Waltham, Massachusetts, rose 9.6 percent to 76 cents at the close in New York, the most since June 18. With today’s gain the company has a market value of about $111 million.

The batteries will store electricity until needed to help stabilize China’s electric grid and allow for the integration of fluctuating renewable-energy resources such as wind and solar power plants, Ray Power Systems said today in a statement released by A123.

“This is an application A123 has been chasing for some time and it’s good to see they’re making progress,” said Michael Lew, a senior analyst at Needham & Co. in New York who has a hold on the stock. He estimates that the 2-megawatt storage system is comparable to enough batteries to run about 800 to 1,000 hybrid-electric cars.

Lead image: Power lines via Shutterstock

5 Comments

ANONYMOUS
July 25, 2012

The full press release is at: http://www.a123systems.com/f4ffc3a2-4dd4-49c2-a728-ec4e2e3314a6/media-room-2012-press-releases-detail.htm

It is pretty common to see these systems characterized only by the power they can deliver, with other key metrics left unmentioned. Elsewhere on their web site they claim a 90% trip efficiency, but I didn't see any data related to storage capacity, the stability of the system with respect to deep discharge, or the number of cycles the system will be stable for. The usual reason one would obscure these metrics is that their performance on them isn't noteworthy. Some of their frequency regulation products claim are claimed to be scalable in the 15 min. to 8 hour range. I rather doubt the system is intended for long duration usage, so I'd guess the operation duration is toward the low end of this range. Also missing in the press release is any hint of the value of the deal. There seems little reason, based on this deal, to thing A123 is headed for a turnaround.
Steven

JSM @AltWatt
July 24, 2012

Although it is by no means certain, one would expect that this press release would indicate that this could provide "2-megawatt of grid frequency regulation" services and that the system has 2MwH of capacity (although perhaps less, as frequency regulation would never in practice utilize 100% of its capacity). I could be wrong, but that's only the output of one large wind turbine at optimal speed (or maybe less). This doesn't seem to be worth the attention (and stock price bump) it is getting to me.

ANONYMOUS
July 24, 2012

This isn't a "2-megawatt" system. Energy storage systems store energy, and because there's no time in the units (MWhour, MWsecond, whatever...), we have no idea how much energy this system can store.

ANONYMOUS
July 23, 2012

They still might go bankrupt....
Steven