Gas cogeneration will kill coal.  Then we displace gas.

There are some indications that capacitors can replace battery technology although I'm not sure of the technology. Ultra-capacitors seem to use nano-carbon technology stored as static electricity, with no messy chemical reactions needed. However, the Texas company is very secretive about it and I bet it cost a fortune.

But man I hate them freaking batteries.  Waste of money and then they go bad.  A new battery can be recharged about 80 percent. An old battery maybe 30 percent - then nothing. My point is that by design they WASTE electricity.

Onward through the fog

What if we designed a world that funtioned when the wind blows and the sun shines?  

What do we need to run 24/7?  Does this fast paced world have us on a treadmill?  When you think about it -- why?  Where is it getting us?  

Unless we can think outside the box we'll be constrained by this kind of "can't".  

Plus, small scale, decentralized storage will probably be more feasible than large scale, centralized storage.

Living with renewable energy will entail a true revolution.  The power centers that be will fight it tooth and nail.  It does not lend itself to maintaining the status quo or the drive toward globalization.  Choosing to go this route sets up a real conflict between world views.  

Some will try to make it an ad on to the main operating system.  But try making it the alternate operating system and you got yourself a real fight.

I get that renewables are intermittent resources, but the grid is massive relative to the volume of renewables - and on a marginal cost basis, there is never a reason why we wouldn't run a renewable if the wind was blowing/sun was shining/etc.  Which would suggest that on a windy/sunny day, the fossil-fired stuff on the margin ought to dial back first - as it already does - as the renewables float.  This is exactly what happens with cogen plants that follow thermal demands - and those make up a much more significant fraction of the total power demand on the grid (meaning that if there were grid-stability issues with these intermittent loads, we'd see it on the cogen long before we saw it on the renewables.)

This logic has limits - indeed, some have suggested that the huge amount of wind in Denmark has caused grid disruptions as wind died down and voltage sagged on the system.  But given as we are so far from those limits in most of the world, why is this AEP project a big deal?  And why are they doing it at all?  The only reason I can see for coupling storage to renewables in today's environment is if you can save power at off-peak hours and sell it when prices go up during peak.  But this is a pretty thin arbitrage opportunity in most parts of the grid, especially once you take into account the round-trip efficiency of storage technologies and the need to recover their capex off that price differential.

What am I missing?

Something looks fishy about those numbers.  Energy storage is usually expensive on a $/kWh basis, since more stored energy requires more storage material (be it battery cathodes/anodes, lakes for pumped hydro, etc.) but on most analyses is relatively cheap on a $/kW basis because you have such wide latitude on the rate of energy extraction.  (For example, you can choose to discharge a battery very quickly or very slowly without having a big impact on battery cost - although it certainly affects efficiency).  Fueled power plants generally show the opposite relationship (high $/kW but low $/kWh on a capital-cost basis).  This has long given energy storage technologies a competitive advantage in situations that need short-duration high power loads - from car batteries to cell phone repeater towers.  

In that vein, $4500/kW looks awfully high.  My guess is that they've either included other unassociated costs with that storage or else are doing something unique - but that's certainly more than I'd expect for this class of technology.

Pumped hydro is great where you have two existing reservoirs at large differential heights. If you try to build it from scratch its expensive and often has some pretty serious env impact issues. I think the consensus is that there isn't a big potential for large expansions in pumped hydro, but having said that, there are plans in Portugal to expand pumped hydro to 1 GW over the next ten years to support their projected growth of wind.