The Hawaii Natural Energy Institute has awarded a $1.8 million contract to a Nevada company to install a battery backup system at a wind farm Hawi on the Big Island.

Altair Nanotechnologies will install the 1-megawatt energy storage system at the 10.5-megawatt wind farm operated by Hawi Renewable Development. Hawaii Electric Light Co. buys the electricity generated by the wind farm.

The project, which is funded by a grant from the Office of Naval Research, is designed to test the performance characteristics of the battery system and to demonstrate the effectiveness of battery storage technology to integrate wind energy into an electrical grid. The project is expected to be operational by the third quarter of this year.