Batteries are attracting a great deal of cleantech buzz these days -- a trend that's just spiked with General Electric's announcement that it will build a $100 million plant to make sodium-based batteries for hybrid locomotives and other heavy equipment engines. With plans to create 350 new jobs, the Albany, N.Y., project seems be exactly what president Obama had in mind when he predicted a burgeoning green economy.
And government aid it will get, with GE applying for about $40 million in economic stimulus funding in addition to a $15 million grant from the state of New York. So far, the state and its governor, David Paterson, have been nothing but enthusiastic about the plans, which could pave the way for New York becoming a force to be reckoned with in the battery and hybrid industries. Paterson has already been instrumental in funneling $25 million into efforts to draw plug-in hybrid electric vehicle makers to the region. There has also been talk of cultivating a "Lithium Valley" for battery makers along the Erie Canal, according to the Wall Street Journal .
GE is no stranger to the battery market, having already invested $150 million in high-tech cell development in the last decade -- but this is one of the first opportunities it's had to ride the government's coattails. With the federal funds, the company could very well expedite its strategy to generate $500 million every year from its battery operations by 2015.
But it all starts with this initial plant, which should break ground this year and be up and running by the end of 2011. The batteries it will produce are designed for hybrid engines that derive extra energy from braking, upping fuel efficiency in locomotives by up to 10 percent.
It might seem like GE is missing the mark by not focusing on batteries for consumer vehicles with this facility -- especially considering how many plug-in hybrid electric cars are scheduled to roll into showrooms next year -- but the company isn't putting all its eggs in one basket. It recently gave $30 million in capital to front-running lithium-ion battery maker A123 Systems, headquartered next door in Connecticut. It has given $70 million to the company in all, amounting to a 10 percent stake.
If anyone involved in the plant partnership should be wary, it would be the state of New York. Other states are not going to relinquish their battery and hybrid business easily. Last month, Michigan -- left battered and desperate by the economic downturn and the auto industry's bumbles -- passed $300 million in tax credits for battery makers, luring them to Detroit as a possible replacement for ailing auto makers. Incidentally, A123 Systems is one of four companies that has set up shop in that area to supply Chrysler. Oregon has also made a major play for some EV action, pitching hospitable legislation and landing deals with Nissan, Mitsubishi and potentially Toyota to debut their zero-emission and hybrid vehicles there. Wherever these projects set down roots, battery makers are sure to follow. So, for all its lofty plans to foster a battery-churning mecca, New York hasn't gone nearly as far as its rivals.
It will be interesting to see if the state moves to do more, and if GE's new Albany plant will beget others like it. The batteries it turns out may also have applications in boats and mining vehicles, and the jobs it creates will be mostly in areas of skilled trade and manufacturing. The plant is part of GE's broader Transportation division , which will reportedly provide thousands more jobs like these as it grows over the next several years.