View of the Torresol Energy Gemasolar thermasolar plant in Fuentes de Andalucia near Sevilla, southern Spain, taken on October 4, 2011. Gemasolar is the first commercial-scale plant to apply central tower receiver and molten salt heat storage technology.

Electricity is a hoarder’s worst nightmare. It is difficult to capture and store on a large scale and within seconds of being created it disappears.

“We have an electricity grid that is unusual compared to any other industry in the world. It is the largest supply chain without a warehouse,” said William Acker, executive director of the New York Battery and Energy Storage Technology Consortium.

But that could change if Congress adopts an investment tax credit proposed last week for energy storage technologies. Introduced by US Representatives Chris Gibson, a Republican from New York and California Democrat Mike Thompson, the bill offers energy storage the same kind of tax advantage that has spurred double digit annual growth in the wind and solar industries.

Energy storage support was proposed into the US Senate late last year. Read more about the Senate proposal on Breaking Energy here.

A Multitude of Choices

Energy storage is not one technology, but a range of devices, such as advanced batteries, compressed air, ice storage, pumped hydro and fly wheels, which help grid operators with the second-by-second balancing of supply and demand on the electric grid.

“Electricity has to be made at the precise time we consume it, and that leads to very real challenges,” Acker said.

Unlike wind and solar power, energy storage hasn’t yet captured the public imagination because many of these devices are in an earlier stage of development, emerging more recently out of research and development and into commercial readiness, according to Katherine Hamilton, policy director of the Electricity Storage Association (ESA) Advocacy Council. Full disclosure: Hamilton is also a member of the Breaking Energy Editorial Advisory Board.

Energy storage offers fixes for frequency regulation, congestion, back-up power, demand response, energy cost management and other grid needs. It also offers size advantage in an era when urban crowding and not-in-my-backyard protests stymie construction of large transmission lines and power plants.

“You can’t put a natural gas-fired peaker in the middle of Manhattan,” Hamilton said. ” You can put a battery anywhere.”

The technology appears to have bipartisan acceptance, even in today’s deeply divided Congress, Hamilton said. Still, ESA is realistic about the bill’s chances of passing Congress before the election. Hamilton handicaps it at “about zero.”

That’s okay, though, she said, because ESA’s intent at this stage is to use the legislation to educate lawmakers and the public about energy storage. “Most people don’t know what energy storage is,” she said. The bill is meant to make it “become part of the conversation” when Congress does takes up energy policy again.

Financing The Expansion

The bill provides $1.5 billion for grid-connected energy storage systems of at least one megawatt through a 20% investment tax credit. Each project can secure no more than $40 million. Smaller, on-site storage systems at businesses or homes would be eligible for a 30% credit.

The credit is meant to make it easier to finance grid-scale projects and ramp up use of storage devices so that manufacturing and installation costs drop. Costs now range dramatically for energy storage depending on location and technology type.

John Zahurancik, vice president of operations and deployment for AES Energy Storage, says his company has four commercial projects already operation, including the 32-MW Laurel Mountain, a project in West Virginia that operates with 1.3 million battery cells. On line since October, the project helps moderate the swings in output of a 98-MW wind farm and keep the grid in balance.

Zahurancik says energy storage offers a quicker and more precise way to keep supply and demand in balance than our current approach, which may mean ramping up and down the output of a power plant every four seconds.

Jam the gas pedal of a car on and off that much and “that is going to have an impact on the life of your engine, the fuel economy ,the emissions,” he said. The same is true for power plants.

Energy storage systems, on the other hand, offer a “technical approach to solve the problem that is cost effective, produces less emissions and is able to do a superior job,” he said. He envisions costs for batteries falling the way costs for solar panels have, and says the tax credit would hasten the price drop.