For those who have long been frustrated with the pace of progress in energy storage for electricity, we are happy to finally report a bit of good news.

Two weeks ago, Jason moderated a panel at “Investing in Energy Storage Technologies,” a conference in New York City sponsored by Financial Research Associates, LLC. Unlike most industry conferences on storage (meetings where we all sit around preaching to the already converted), bona-fide, real-life energy tech investors attended this one. Plus — and here’s where it gets exciting — there were actually two presentations that together could very well signal the increase in interest and investment needed to commercialize energy storage technologies for our electricity grid.

First, American Electric Power Corp. (AEP), one of our country’s largest electric utilities, has announced a program to install up to 1,000 MW of energy storage devices over the next 13 years. Most of it is based on a relatively new technology called the sodium-sulfur battery. AEP has been demonstrating this technology at the 1.2-MW scale at a facility adjacent to a substation. Now that it has gained some confidence in them, the utility plans to install 6 MW worth of these devices by 2008, 25 MW by 2010, and 1000 MW by 2020. This is an unprecedented commitment to energy storage for electricity infrastructure in this country. AEP’s main interest is in ensuring that distributed energy at non-utility sites can be smoothly integrated into its electricity production and delivery system.

Second, as some of you already know, a piece of legislation is circulating in Congress titled The Energy Storage Technology Advancement Act of 2007. The act comes with a funding commitment of $150 million, which would be appropriated to cost-share technology demonstration projects. With respect to the electricity grid and distributed generation, this means the federal government seeks to facilitate the transition of storage technologies from R&D to commercialization. A discussion of the act was hosted by Brad Roberts, chair of the Electricity Storage Association, who had just testified to the relevant Congressional committee the week before.

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The bill represents a quantum leap in commitment; until now, the federal government has supported energy storage with a meager R&D budget of around $10-15 million. Of course, compared with the hundreds of millions of dollars allocated to support just one coal technology, integrated gasification combined cycle (IGCC), it doesn’t seem like much. But it’s a huge step in the right direction.

Of course, it’s a long way from a bill introduced in the House to real money in the lab, but we’re excited anyway.

So, who stands to benefit the most from these developments? We believe renewable energy proponents do. Large-scale wind and solar, in particular, cannot compete against nuclear and fossil fuels for electricity generation without commercial storage. Their intermittency and unpredictability will ultimately prove formidable barriers to renewables achieving more than 5-10 percent penetration on the grid, or competing without significant direct subsidies. Energy storage converts an unpredictable resource, one that utilities are essentially forced to adopt, into one that can be scheduled into the markets.

So, the AEP move and the House bill may signal a real turning point for energy storage. We’re not holding our breath, but we are definitely keeping our fingers crossed.

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