SatCon (Nasdaq CM: SATC) is up 17% today on news that the company has been awarded a $2.7M contract.

While the company won't explicitly name its customer, it says it's been asked to develop an energy storage and delivery system initially capable of providing 8 megawatts of power "for several seconds". When the system is fully implemented, the power level is expected to be in excess of 20 megawatts.

Delivery of this first stage is scheduled for June 2007. The full value of all three proposed stages is $6.5M.

"That's fast for a system that size," noted Gord Petroski of Fronius, a maker of smaller size inverter and battery systems for different markets than SatCon. His company didn't have any further insight into SatCon's win, he said, but noted that "the military is adopting more and more technology to move it away from oil dependency."

The system is to be an adaptation of SatCon’s high power inverters and other energy storage products developed for alternative energy and distributed power markets, including solar, fuel cell and wind farm installations.

The company says this contract is in addition to an already announced $32 million in backlog at the end of the company's recent third quarter.

The award expands on SatCon’s portfolio of power electronics applications with the development of an integrated pulse power energy storage system. This technology has direct applicability to "both civilian and military customers", the company said cagily.

SatCon Technology Corporation is a developer and manufacturer of electronics and motors for the Alternative Energy, Hybrid-Electric Vehicle, Grid Support, High Reliability Electronics and Advanced Power Technology markets.

Calls to SatCon were not returned by press time.