This or pumped water is where the action is going to be in utility scale storage, at least for the near future.
From GigaOm Cleantech (formerly earth2tech but it's still Katie's show):
Peter Thiel, Khosla, Bill Gates back air energy storage startup LightSail
Classic Keep it Simple Stupid technology.A startup that makes compressed air energy storage technology called LightSail Energy, has raised a whopping $37.3 million series D round led by Peter Thiel, and also including existing investors Bill Gates and Khosla Ventures. LightSail Energy, based in Berkeley, Calif., has been in stealth for awhile, but the company makes a next-generation technology that compresses air in a tank and efficiently releases it on command, creating a sort of air-based battery for the power grid.Peter Thiel is leading a large investment into an air energy storage startup called LightSail Energy. Thiel joins Bill Gates and Khosla Ventures as investors. Compressed air energy storage tech pumps air into tanks and releases it on demand to create a sort of air battery.
Compressed air is a decades-old technology which takes excess energy from a power plant or renewable energy and uses it to run air compressors, which pump air into tanks or underground caverns where it’s stored under pressure. When the air is released, it powers a turbine, creating electricity. There’s only a handful of compressed air energy storage projects in the world, including one in Alabama and one in Germany....MORE
If Energy Secretary Chu hadn't been such a battery-phile we'd be a lot further along and maybe have conquered this particular bottleneck.