Around the world, utilities and government regulators are watching very closely the first mass energy storage device to be tied to a windfarm - VRB Power Systems flow batteries and Sorne Hill in the Republic of Ireland.

If you want to know why Ireland is the first country in the world to pioneer energy storage by wind farms this seriously, I reckon there are three reasons;

i) They have pretty much (except possibly New Zealand) the best sites in the world for windfarms - where windspeeds are so high, load factors of 35% are commonplace. So wind is cheaper in Ireland than almost anywhere else, incentivising developers to build more of it.

ii) A few years ago, TSO, who were in charge of Ireland's national grid (they are now called Eirgrid Plc), demanded a moratorium on new grid connections to wind farms at 775 MW to overcome the technical challenges of integrating large amounts of unpredictable power. So in order to progress, energy storage started to loom far larger in the minds of irish developers than in other nations, where it has clearly not actually happened at all.

iii) Ireland has grown by on average 7.5% per annum for each of the last 10 years and they need lots more power, which as island they can't easily import from abroad. Dell's Computers European headquarters are run out of Ireland and the country has been a magnet for foreign investment, requiring even more power.

So there you have it - if Sorne Hill's energy storage is seen to work, I can well imagine regulators around the world will be tempted to start mandating some degree of energy storage for future wind farms.

And it's hard not to see VRB Power Systems doing well out of that.

Iberdrola, which as I wrote in this feature on the world's biggest alternative energy companies here in January 2007, is the largest cap utility with the greatest alternative energy exposure, just might be eyeing up Rokas, as a potential acquisition target.

In Forbes magazine today, Iberdrola's Chairman called them "serious partners" while strategy director, Jose Luis del Valle said in response to a question on whether Iberdrola plans to buy out Rokas' minorities;

"We are not planning to buy any additional shares' at present . . . any such move is dependent on anti-trust approval."

Suzlon Energy, is planning to diversify out of wind into biodiesel and solar.

Measured by its margins - 38% gross and 22% operating, Suzlon is the most profitable wind company in the world. So why dilute that?

That is what seems to be happening. Does Suzlon really need to take over Repower Systems AG, who last year had a low single digit gross margin and a negative operating margin?

And now, they are going to diversify into biodiesel and solar. I'm all for diversification, but only if it is into higher margin activity. I doubt very much that they can repeat their results in two very different industries. Suzlon just might be falling into the classic trap of diversifying out of their own success.

For now, Suzlon might be best advised to stick to the wind.

Repower AG, the focus of a takeover struggle between Suzlon Energy and Areva has just reached a crucial point. According to the French Finance Minister, Thierry Breton, Areva should reconsider its plans to take over German wind turbine maker Repower Systems AG, as the price is being driven too high.

Some of us might think, "What's a commercial decision like that got to do with him and what does he know about company valuation better than the management of Areva?"

But that's not how French capitalism works, which has a marked preference for the Big Man. Areva, after all is owned by the French state so the politicians get to call the shots, however unenlightened they might be.

As I wrote recently here in Power Engineer Magazine . . .

"A breakthrough in multi-megawatt class energy storage is at least a possibility in the next 10 years. At the moment, only a few megawatts can be stored using various energy storage technologies, and at great cost. Wind power would make a huge contribution if perhaps 1000MW could be stored overnight (when it is almost worthless) and sold back into the spot market during the day – when prices are at their highest."

So I was very taken to learn of Sorne Hill windfarm in Ireland, which will shortly have 12 megawatt hours of vanadium flow battery storage, courtesy of VRB Power Systems. Just view all the technical detail here in this January07 piece in New Scientist.

If I've got my doubts still though, there is as yet absolutely no mention of cost for this technology - hard figures like cost per installed watt. The plan for this windfarm seems to be to sell back into the spot market, which would make sense if the technology was expensive and the spot prices were high. And I'm just trying to imagine how big these vanadium flow batteries are. If - as per the article - 70,000 litres of vanadium sulphate solution delivers 800 kilowatt hours, that means 87,500 litres gives you 1 megawatt hour. 12 megawatt hours then requires 1,050,000 litres - or (assuming a similar volumetric density to water) 1,050 cubic metres of space or 37,500 cubic feet of space needed to hold the batteries. That seems like a lot of space, but it is certainly much less than the total surface area required for a 12 megawatt windfarm.

If all goes well at Sorne Hill windfarm, I think we'll see a vast increase in this kind of energy storage. Selling into a spot market with supply shortfalls has to be the most cost-effective way to make this technology pay. So I'm wondering when this will take off in California . . . if it had been around in 2001 in scale, I'm sure that enron traders could not have made anything like the profits they did.

VRB is definitely a company to watch - it has an energy technology that can actually bring prices down.