Ener1 (HEV) is announcing a significant contract with the Russian Federal Grid Company to co-develop utility scale lithium battery storage systems.  The initial phase of the $40 million contract is already underway and focuses on grid integration of emergency power back up systems in economically critical areas.  The Russian government is spending billions to upgrade its electrical infrastructure ahead of the Winter Games in 2014, so this may be the first of a few contracts for Ener1 if all goes well.

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“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 leap-frog mode to incorporate lithium-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.”

After initially popping on the news this morning, HEV has given back all the gains but still retains support of its 50 day moving average.  I believe HEV is offering a compelling entry at current levels and I have initiated a position.