Recent advancements in energy storage technology could finally make renewables, such as wind and solar, truly viable economic alternatives to fossil fuels when it comes to generating power. The ability to store power bridges the reliability gaps that occur with renewables, when, on any given day, the sun just doesn’t shine bright enough or the wind doesn’t blow hard enough to feed the hungry power grid.

So what is this amazing new technology? It’s batteries – yes, batteries.

But we aren’t talking about any old battery here; rather, we are talking about super batteries with the ability to store megawatt-sized loads, enough to power entire neighborhoods or towns if need be. While you could theoretically achieve the same result by stringing together the type of batteries used to power your laptop or smartphone, the cost of doing so would be economically prohibitive. But entrepreneurial companies, such as Ambri and Eos Energy Storage, are pursuing the next generation of battery technology, with the aim of bringing storage costs down significantly for utilities.

So what is considered to be a reasonable cost? The analysts at Citibank believe that battery storage costs should be between $230/kWh to $150/kWh to be financially attractive enough to see these mega-batteries deployed in large numbers across the power grid. They say the industry should reach this level somewhere around 2030 and expects 240GW of power storage capacity to be deployed by then, which would be worth around $400 billion.

The folks over at Eos believe the future is now. They say that they can produce battery systems with the ability to reach costs as low as $160/kWh – storing power efficiently and inexpensively. Investors are now clamoring to get a piece of Eos. On Monday, the company announced that it had secured $15 million in financing from AltEnergy LLC, an energy technology and infrastructure focused investment firm, with plans to raise an additional $10 million with strategic investors, for total gross proceeds of $25 million.

With such industry interest in battery technology, I sat down with Philippe Bouchard, vice president of business development at Eos, to discuss grid-level storage and how technology is fuelling this new revolution in batteries. The following interview has been edited and condensed for publication.

When will batteries make their mark on the power industry? Do we have to wait ten or fifteen years to see any change?

What most people don’t realize is that batteries are already transforming the energy industry.

Next generation technologies—such as those being developed at Eos—are designed to be low-cost, a key criterion for the grid, as opposed to light-weight, a key attribute for portable electronics and electric vehicles. As the industry drives increasing scale and cost reduction, batteries ranging in size from dorm refrigerators to giant shipping containers will be deployed on the electricity grid.

Just in the last year, California, New York, and Texas utilities alone announced plans to procure more than 6GW of energy storage on the grid by 2020—that’s almost 50% of New York City’s peak load. These states alone are creating a $10+ billion market opportunity and are driving widespread adoption of grid-connected battery storage. In short, this transformation is happening today and will forever change the way we generate, deliver, and consume electricity.

How do the economics work here? Can batteries really compete?

Until now, it has been cheaper to overbuild and underutilize power generation and delivery infrastructure than it has been to store electricity. Thus for batteries to be a compelling solution for the grid, they have to out compete this entrenched incumbent on an economic basis. At an installed cost of less than $300/kWh, long-lasting batteries begin to displace marginal generation used for peak power requirements; at less than $200/kWh, batteries essentially replace most peaking generation and a substantial portion of distribution investment.

But to create a true apples-to-apples comparison, you have to evaluate the cost of these competing solutions over the life of the asset and the amount of electricity delivered under normal operating conditions. Known as levelized cost of energy, gas peakers set this cost threshold somewhere between 20 and 27 cents per kWh.  For the sake of comparison, the levelized cost of energy of an Eos battery is approximately 12 cents per kWh.

Batteries can be charged at night and discharged during peak hours to reduce system load and facility demand charges—allowing utilities to reduce their cost of service while minimizing customer electricity bills. In broader terms, batteries simultaneously replace both expensive peak generation capacity and expensive distribution infrastructure.

Eos’ battery innovation is grounded in radical cost reduction through simplicity of design and use of inexpensive materials. Our novel zinc hybrid cathode battery chemistry consists of metal current collectors, salt water electrolyte, a carbon cathode, low-cost catalysts, and plastic frames. Though more than 600 claims from dozens of patents contribute to our “secret sauce,” they all involve low cost manufacturing methods.

We’ve reduced the number of components in the battery and developed a long-lasting system capable of storing and discharging electricity by reversibly plating and dissolving zinc, which is widely available and incredibly inexpensive. Because we use an aqueous electrolyte and non-hazardous materials, the inherent safety of the technology allows us to simplify system management and balance of plant to further reduce cost.

How does this process differ from, say, the production of a lithium-ion (Li-ion) battery, which seems to be the battery technology of choice for everything from cell phones to electric cars?

Our zinc hybrid cathode technology is fundamentally different and lower cost than Li-ion. Whereas Li-ion batteries require costly clean rooms and complex vapor deposition processes, Eos is now manufacturing zinc hybrid cathode batteries using equipment from the food industry in the equivalent of a machine shop.

We can achieve a price of $160 per kWh for our Aurora DC batterysystem (system, not cells) at much lower volume and roughly 1/100th the capital investment required by Li-ion. Our goal is to not only produce an inexpensive battery, but to produce a batteryinexpensively. With this objective in mind, we designed our technology to employ highly commoditized manufacturing equipment and processes so that we can leverage existing infrastructure to scale-up more quickly and at lower cost.

How should we think about Eos compared to competing technologies like the liquid metal batteries being developed by Don Sadoway and Ambri at MIT, or scale Li-ion plays like Elon Musk and his Tesla Gigafactory?

These and others are great companies with innovative technologies. There are a large number of applications for energy storage both on the grid and elsewhere, and no one solution will be an ideal fit for all applications.

While lithium-ion is a great technology particularly for electric vehicles and portable electronics, established players are pursuing a strategy of brute force volume manufacturing and vertical integration to achieve costs that become interesting on the grid. Our business strategy involves collaboration with major inverter manufacturers and suppliers of utility infrastructure to integrate, sell, and service turn-key energy storage systems using Eos batteries. In short, we’ve developed our Aurora product with the customer for the customer, and believe that our cost will enable us to partner with the industry’s largest players to provide the most reliable and lowest cost energy storage solution on the market.

How long has Eos been working on pursuing this new battery technology?  

Eos’s technology has been under development for almost 10 years. In 2008, co-founder and CEO Michael Oster teamed up with inventor and fellow co-founder Steve Amendola to form Eos Energy Storage.  We soon brought in utility expertise to develop a deep understanding of the business case for grid-connected storage and to facilitate customer-driven product development. George Adamson, our vice president of research and development, has commercialized numerous battery technologies and is now leading product development and manufacturing scale-up. Our entire team is incredible and has maintained unwavering focus: one product, one price, one solution. I believe this focus gives us a competitive edge and will continue to serve as our compass for the journey ahead.

What do we have to look forward to soon from Eos?

This year will be another important one for Eos.  We recently raised sufficient capital to accelerate our manufacturing ramp-up as we work to build commercial production capacity in upstate New York and elsewhere. We are now deploying our first AC-integrated battery systems with Con Edison in New York City and GDF SUEZ in Europe, and we’ve fully sold our capacity for 2015 deployments which now include akeystone project with Pacific Gas & Electric in California. In the first quarter of this year, Eos will launch the industry’s lowest cost MW-scale battery storage product—the Aurora 1000|4000—with availability beginning in 2016. In tandem with our commercial product launch, Eos will announce partnerships with major system integrators participating in our Aegis Program—a partnership that will allow customers to purchase wrapped, turn-key AC energy storage systems from the industry’s largest suppliers of utility equipment.

And finally, what keeps Eos up at night?

Eos seems well underway to achieving its goal of providing reliable and cost effective storage options for utilities. If successful, this could have a profoundly disruptive impact on the power generation business and cause prices for everything from natural gas to coal to even oil to remain in the doldrums from a pricing perspective.

Cheaper renewable power means it will be much cheaper to plug in your car than fill it up at the gas station. It may be one of the reasons why some, like Saudi businessman Prince Alwaleed bin Talal, believe we will never see $100 oil again. And it may also be why investment banks such as Goldman Sachs plans to invest in excess of $40 billion in renewables by 2021. Clearly, this is one technology worth watching.

(This news story is from Forbes)