Energy storage for the grid has been referred to as something of a “game changer” for integrating intermittent sources of renewable energy – such as wind or solar – onto the grid.  If done properly, energy stored when these sources are producing energy could be discharged when users demand it – even if the source is not producing energy at that moment.

But if you ask utility executives about grid-scale energy storage options available today, it’s likely you’ll hear a response indicating that they are unimpressed with their current choices.  Many have remarked that – in some cases – there isn’t a solid business case justifying the investment necessary to site, build, and interconnect a grid-scale storage solution.  Or that it’s hard to predict operations and maintenance costs over a long period for (what can be) relatively new technologies.  Or that there can be major permitting obstacles.  Or that they struggle to choose from a bewildering range of electrochemical solutions that seemingly span the entire periodic table.  And this is not to mention mechanical, thermal or electrical solutions like compressed air energy storage (CAES), ice storage, or capacitors.

Given these challenges, why bother with grid-scale storage at all? Is it one of those technological challenges whose solution is seemingly always decades away?

Despite many challenges, there are good reasons to be more optimistic about grid-scale storage now than ever before.  The first is the emerging “ecosystem” around grid-scale storage.  What is an ecosystem?  Think of a market ecosystem similar to the physical one a biologist might recognize – it includes all the market participants, including “environmental” elements outside the market influencing its development, such as public policy.

For a useful example of a business ecosystem, consider what happened during the IT boom.  Cable companies invested billions to lay or repurpose cable to include bandwidth for Internet connectivity.  That enabled you – the consumer – to get online, browse for content, and buy things from Amazon.com.  The processing speed of your computer was doubling approximately every two years – following Moore’s Law, becoming cheaper and more powerful all the time.  This same computer was probably running software from Microsoft, which was booming and churning out IT savvy employees who might leave the company and start new ones.  These startups were funded by venture capitalists, who were eager to capitalize on what seemed to be the best investment opportunity in decades.  And all these players were supported by armies of consultants, bankers, lawyers, and other service providers catering to the growing market.

In short, many players in the information technology ecosystem were making investments and decisions that supported other market participants, even if that wasn’t their intention (and it usually wasn’t).  Ultimately the ecosystem created fortunes, helped spawn companies like Facebook and Google, and brought into the mainstream developments like email, search, and social networking that many of us take for granted today.

Is this a bit of an overblown comparison to grid scale storage, which is estimated to be only a worldwide $1.5B market today?  Sure it is.  But it’s not entirely wrong.

Companies are tackling all stages of the energy storage value chain – from invention, to funding and commercialization, to manufacturing, even to recycling.  At the earliest stages, scientists, universities, and government agencies are busy helping to fund and invent new storage technologies today.  Start-up storage companies are spinning out of labs and universities.  ARPA-E, venture capitalists and others are funding energy storage companies and deployments. Large companies like GE are building out storage businesses, while others are building storage businesses by acquisition.  Companies like Nanosys are focusing on components of what makes for a successful storage technology – such as materials – while many others, particularly those in Asia, are building out the manufacturing scale necessary to drive down costs.  Utilities are beginning to adopt solutions. Service providers in the legal, consulting, and market research fields are paying attention.

Will this lead to low cost, high energy grid-scale storage nirvana anytime soon?  Probably not.  But it’s reason enough to believe that grid-scale storage is a lot more than just hype.