If you're going to run the country on renewable energy, you're going to have to store it somewhere.

That basic fact, along with improving technology and increased government support for batteries and ultracapacitors to help do the job, could push the grid storage market for those devices from a projected $1.5 billion market by 2012 to $8.3 billion by 2016, according to a NanoMarkets report released Friday.

And the research firm wasn't above picking out a few technologies – lead carbon, sodium sulfur and flow batteries for grid storage, as well as new ultracapacitor-enhanced lead acid batteries – as potential leaders in the field.

There's a simple reason for optimism in grid storage – renewable energy sources like solar and wind power, which can't be scheduled in advance, will need storage before they can be integrated into the grid in any big way.

"Current national and international goals for alternative energy deployment will not be met without extensive new storage capability," the report states.

Right now, almost all utility energy storage consists of pumped hydro – the old-fashioned method of pumping water uphill with cheap, off-peak electricity, then letting it flow downhill to spin a turbine and generate power when demand is high.

But only so many sites are suitable for pumped hydro, limiting their use. The same goes for compressed air storage, or pumping air into underground caverns and then releasing it to boost a turbine's efficiency (see Startup ES&P to Store Electricity in the Air).

Batteries, on the other hand, can be put pretty much anywhere. But there are tradeoffs. For example, sodium sulfur batteries – now the most common type of battery used for grid storage – need to operate at very high temperatures, making them unsuitable for installation at homes or businesses (see Green Light post).

But their relatively high efficiency and long lifespan makes them a popular choice right now. Key manufacturer NGK Insulators has installed them in storage projects with utilities including American Electric Power (NYSE: AEP), Xcel Energy and Tokyo Electric Power Co. (see Batteries for the Grid and GridPoint to Manage Wind Power Battery Storage).

General Electric is working on its own large-scale sodium sulfur batteries, though it's concentrating first on making them for hybrid trains (see GE Aims At Energy Storage For Trains, Grid).

Flow batteries, which share some characteristics of fuel cells, also seem well suited for grid storage, and are likely to increase their share of the grid storage market to about $510 million by 2016, NanoMarkets predicted.

Companies such as Deeya Energy, ZBB Energy Corp and Premium Power are making large-scale flow batteries (see ZBB Seeks DOE Dollars to Expand Flow Battery Production).

Lithium-ion batteries could eventually take their place for grid storage, if the industry's growth in the vehicles and consumer electronics markets can yield technological improvements – and economies of scale – that can bring their price down, some analysts predict (see Top Ten Smart Grid: Energy Storage).

Ideas include neighborhood storage devices or using semi-depleted car batteries for storing electricity at homes or businesses. One of the early growth areas for grid storage will be harnessing building backup power systems to meet peak demand loads, NanoMarkets predicted.

On the other hand, the old-fashioned lead acid battery chemistry could find new life in high-tech grid storage applications, NanoMarkets reported. Specifically, it pointed to lead carbon batteries and "ultrabatteries."

Axion Power International Inc. and Exide Technologies are among the makers of such advanced lead acid batteries that are testing their abilities in grid storage pilot projects (see Axion's Lead Carbon Batteries: Sweet Spot for Micro-Hybrid Vehicles?)

Ultrabatteries, which combine the cheap ubiquity of lead acid chemistries with the fast discharge abilities of ultracapacitors, could also show promise, and should be "fully commercialized in a five-to-eight-year timeframe," NanoMarkets reported.

Ultracapacitors could also fit a few niche applications, such as frequency control and regenerative braking for trains, NanoMarkets predicted. Those two markets could be as large as $1.1 billion by 2016, it predicted (see Maxwell Ultracapacitors to Capture Subway Braking Power).

Commercial-scale grid storage projects could get a boost if a bill proposed by U.S. Sen. Ron Wyden (D-Ore.) is passed. The bill would give tax credits for investing in grid-focused energy storage projects similar to those now available for renewable energy projects (see Energy Bill Could Boost Storage Technologies).

Tags: axion, deeya, exide, flow batteries, lead carbon, maxwell, ngk insulators, premium power, sodium sulfur, ultracapacitors, zbb