Ener1 Inc., a manufacturer of lithium-ion battery energy storage systems, has signed a strategic cooperation deal with a division of the Russian Federal Grid Company (FGC) to co-develop storage systems under a nationwide grid modernization program. An equipment-supply, business and technical consulting contract has been signed for US$40 million. The Russian government has funded the update of the country's power transmission infrastructure at a level of $15 billion through 2012.

“This is a unique opportunity for an American company to get in on the ground floor of Russia's historic shift toward energy efficiency as a full-fledged partner,” said Bruce Curtis, president of Ener1 Grid Storage. “FGC is in a leapfrog mode to incorporate Li-ion storage technology for multiple uses in an overhaul of what is one of the world's largest bulk power grids. Russia is the largest country in the world, and we believe this contract is only the beginning for us there.”

The initial phase of cooperation is underway. It focuses on grid integration of large-scale emergency power back-up systems in economically critical regions, specifically the Black Sea port city of Sochi, selected as the site of the Winter Olympic Games in 2014. Installations are being custom designed for exacting operational conditions and placement at remote grid substations in the Western Caucasus Mountains ski resort Krasnaya Polyana. The purpose is to maximize reliability of the power supply for Olympic events.

The supply contract was signed with state-run FGC's wholly owned subsidiary Mobile GTES, Russia's leading manufacturer of mobile electric power stations. In addition to the design and manufacture of the specialized Sochi energy storage units, the contract includes two in-depth joint studies involving Ener1 and FGC engineers covering:

• Systemwide assessment for deployment of Li-ion storage for applications, including strengthening the grid in remote regions, peak load-shaving and future integration of intermittent renewable power sources such as wind

• Feasibility of localization within Russia of development and manufacture of Li-ion battery cells and other components for energy storage systems.

For more information, visit www.ener1.com.