General Electric Company (GE -2.11%) isn't used to giving up market share. Valued at $270 billion, this industrial giant has been in the energy storage business since 2009, and it's not going to let Tesla Motors Inc (TSLA 12.06%) take over energy storage, yet. Here's what you need to know.

Tesla Motors Inc's not-so-secret secret

Planned Gigafactory illustration. Source: Tesla Motors Inc.   

In case you missed it, Tesla Motors Inc founder and CEO Elon Musk has made an announcement about an announcement where his company will announce its second product line at the end of the month. But for a company building a lithium-ion battery factory that will produce more cell supply in 2020 than the entire world produced in 2013, few believe it could be anything other than an official entry into the energy storage market.

Energy storage will be increasingly important in the years to come -- and not just because of electric cars. As intermittent renewable energy sources like sun (sometimes it's dark) or wind (sometimes it's still) power ramp up, energy storage will allow consumers to take advantage of their captured power whenever they need it. And that's where General Electric Company isn't giving up ground.

General Electric Company's comeback?
General Electric Company had a rapid and respectable start to its energy storage business in 2009. A $100 million investment in Durathon battery technology had all the promises of a niche market: a cheap and reliable technology out there for those unconcerned with sticking storage inside a sports car. But after opening a $170 million production factory in 2011, GE has since backed off its energy storage business projections, all but mothballing the factory earlier this year. 

Durathon energy storage. Source: General Electric Company.  

But last week, GE announced a reentry into energy storage: It plans to supply utility Consolidated Edison's (ED 0.64%) subsidiary, Con Edison Development, with an 8 MWh battery energy storage system in Central Valley, California. While an energy announcement like this would be news in and of itself, it seems that General Electric's latest move will put it in direct competition with Tesla Motors Inc: This will be GE's first foray into lithium-ion batteries.

For Consolidated Edison, it's easy enough to understand why General Electric Company would be a natural partner. "We have a history of working with GE in thermal and wind, and we are pleased to continue our long-standing collaboration into the evolving world of energy storage," said Mark Noyes, Senior Vice President and Chief Operating Officer of Con Edison Development, in a statement. "GE brings a strong technical solution, along with performance guarantees." 

Plans for an 8 MWh battery energy storage system are far from equivalent to Tesla Motors Inc's Gigafactory. If production there goes as planned, this GE system will equate to just 0.002% of Tesla's annual production.

But the announcement makes clear that both General Electric Company and Consolidated Edison consider this to be a pilot project into exciting new territory. GE is keen to distance itself from its seemingly failed Durathon Technology, while creating a comprehensive and cost-competitive product for power providers. Consolidated Edison will use this first energy storage project as a lesson for both "optimizing and operating energy storage facilities in the future," according to the announcement. 

The energy storage war isn't over
The current energy storage market is worth a tiny $130 million, but analysts expect this business to boom to $1.5 billion by 2019. That's almost half of Tesla Motors Inc's 2014 revenue and a not-insignificant 1% of giant General Electric's. This latest news sets into motion what we've known all along: The energy storage war is from over, and investors will need to watch closely as the battery battles heat up.