It's one of the bigger issues facing today's electrical grid: There's no cost-effective, convenient method for storing excess electricity. Utilities' inability to easily regulate production leads to wide discrepancies in the price of electricity; for instance, a utility can't just shut down a nuclear power plant when demand is lower, nor control when the wind blows. As a result, electricity is often two to three times cheaper during the middle of the night -- when demand is typically much lower -- than during the day.
Yesterday, Pacific Gas & Electric
The technology, dubbed V2G, is still pretty crude, and PG&E does not expect wide-scale deployment before 2012, but the trend bears watching. Here's why.
For starters, an increasing number of hybrid plug-in vehicles, including General Motors' Saturn Vue SUV (available by the end of 2009), will soon be capable of storing electricity in this fashion. In addition, companies such as Altair
As these two trends converge, it's not a stretch to believe that companies with huge fleets of automobiles, such as UPS
Larger, energy-conscious corporations such as Google
The technology is still a few years away from the mass market, but PG&E's demonstration shows how innovative companies can make alternative energy a competitive advantage.
I encourage investors to watch for signs that other companies are transitioning to hybrid plug-ins, or making arrangements to install the conversion technology necessary to siphon the electricity stored in those vehicles' batteries. It might mean not only profits for companies producing the technology, but also notable cost savings for end users.
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Fool contributor Jack Uldrich does not own stock in any of the companies mentioned in this article. Microsoft is an Inside Value pick, UPS is an Income Investor pick, and FedEx is a Stock Advisor pick. The Fool has a strict disclosure policy.