That’s why we wanted to take the opportunity to highlight some of the rare next-generation battery startups out there that are using nanotechnology, new printing technologies, high-powered computing, and other innovations to produce the future’s batteries. With a little luck, strong leadership, and maybe some government support, these battery startups could change the way the world stores energy. Also make sure to check out an advanced battery report (subscription required) recently published by our research service GigaOM Pro.

1). Ambri: Ambri is one of the most well known battery startups out there. Formerly called Liquid Metal Battery, the company was founded by MIT Professor Don Sadoway, who is probably the only battery startup founder ever to score an interview on The Colbert Report. It’s also got investors Bill Gates, Vinod Khosla, and oil giant Total. Ambri is developing a battery for the power grid using molten salt sandwiched between two layers of liquid metal. The battery is still at least a year and a half from commercialization.

2). Imprint Energy: Using zinc, instead of lithium, and screen printing technology, Imprint Energy has developed a battery that is ultra-thin, energy-dense, flexible, and low cost. Because the battery can be made thin and pliable, the company hopes to target companies making wearables. Imprint Energy is already making small volumes of its batteries for pilot customers, and plans to ramp up to commercial scale manufacturing in a couple years.

3). Alveo Energy: Half-year-old startup Alveo Energy is looking to develop and commercialize a battery made out of water, Prussian blue dye — which is used to color things like blue jeans, crayons and paint — iron and copper. The battery is meant to be ultra low cost and long lasting, and if successful, could help deliver breakthrough energy storage technology for the power grid. The research behind the battery was done by Stanford PhD student turned entrepreneur Colin Wessells, and Stanford Professor Professor Robert Huggins, and the company managed to snag a $4 million grant from the Department of Energy’s high risk early stage program called ARPA-E.

4). Pellion: Pellion went about finding the perfect battery chemistry in a totally disruptive way: the researchers created advanced algorithms and computer models that enabled them to test out 10,000 potential cathode materials to fit with its magnesium anode for its battery. Pellion co-founder, MIT Professor Gerbrand Ceder, also helped develop The Materials Genome Project at MIT, which is a program based on using computer modelling and virtual simulations to deliver innovation in materials. Pellion says its magnesium batteries could have very high energy density — higher than current lithium ion batteries. The startup is backed by the ARPA-E program as well as Khosla Ventures.

5). QuantumScape: QuantumScape is an early stage stealth battery startup that is truly a product of Silicon Valley. The company is commercializing technology from Stanford University, it was founded by Infinera co-founder and CEO Jagdeep Singh, and it’s backed by Kleiner Perkins Caufield & Byers and Khosla Ventures. The company is trying to create a battery — called the all-electron battery — that has the density of fossil fuels. The technology being used is a new method for stacking trace amounts of materials together.

6). Envia: A year ago battery startup Envia unveiled that its lithium ion battery technology could deliver an electric car with a 300-mile range for a cost of around $25,000 to $30,000. Founded in 2007, Envia developed a low-cost cathode and then paired that with a silicon carbon anode, and a high-voltage electroloyte. The company is backed by General Motors, Japanese giant Asahi Kasei, Pangaea Ventures, Redpoint Ventures and the DOE’s ARPA-E program.

7). GELI: Startup GELI isn’t making new types of batteries, but it’s developing an operating system and software for grid batteries. Companies, building owners and utilities can buy GELI-enabled batteries and use the batteries for services like providing energy storage for solar systems, or for storing and discharging energy when the demand for energy becomes out of balance with supply.

8). Sila Nanotechnologies: Sila Nanotechnologies was founded in 2011 by Valley entrepreneurs working with the Georgia Institute of Technology. The company is building a lighter lithium ion battery that has double the capacity of current lithium ion batteries. The company received a $1.73 million grant from the DOE.

9). Boulder Ionics: Boulder Ionics is working on breakthroughs for the electrolyte part of the battery, which is the guts of the battery, where the ions flow across between the anode and the cathode. The company is developing an electrolyte made of ionic liquids that can function at high temperatures and voltages and is lower cost to make than the more standard way to make ionic liquids.

10). Prieto Battery: The brainchild of Colorado State chemistry professor Amy Prieto, Prieto Battery is making a lithium ion battery that it says can charge in five minutes and last for five times longer than the standard lithium ion batteries. The company is leveraging nanotechnology to develop tiny copper nanowires that make up the anode of the battery, and the electrolyte is made of a solid polymer.

11). Sakti3: Sakti3 is a startup in Michigan that is building a lithium ion battery that is entirely solid state, and has a high energy density. Making it from solid polymers means it won’t have those flammable liquids and could be a lot safer for electric cars. The company is backed by Khosla Ventures, GM Ventures and Itochu.

12). Xilectric: Xilectric is re-making the “Edison Battery,” which traditionally has been a rechargeable nickel iron battery. But Xilectric is making it out of aluminum and magnesium, which it says will make it more low cost and with higher performance. The company was awarded a $1.73 million grant from the DOE.

13). Amprius: Based on research from Stanford’s Yi Cui, Amprius is working on lithium ion batteries that use a nanostructured silicon material for the anode. The nanostructured material could shrink the anode fourfold and allow a fourfold increase in energy density. The company has raised at least $25 million from Trident Capital, VantagePoint Venture Partners, IPV Capital, Kleiner Perkins Caufield & Byers, and Eric Schmidt.

Updated: This article was updated on January 14th at 10:30AM to correct the name of the show that Ambri’s founder did an interview on, from The Daily Show to The Colbert Report.

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Today Wessells is the CEO and co-founder of a half-year-old startup called Alveo Energy, which is looking to develop and commercialize a battery made out of water, Prussian blue dye — which is used to color things like blue jeans, crayons and paint — iron and copper. The battery is meant to be ultra low cost and long lasting, and if successful, could help deliver breakthrough energy storage technology for the power grid.

Start of the journey

For now, the company is just getting started. Wessells co-founder is Stanford Professor Robert Huggins, and the small team works out of office space in Palo Alto, Calif. They plan to round out the team to just four people over the next couple of months, and perhaps double that over the next three years. So, yeah, they plan to stay lean.

Alveo Energy is one of just a few early stage battery startups that’s emerged from the Valley in 2012. I came across the company last week because they managed to snag a $4 million grant from the Department of Energy’s high risk early stage program called ARPA-E. They won one of the largest grants out of the 66 projects that were funded.

Wessells, a first time CEO, called the grant “a validation of their technology,” and an incredibly important milestone for them. The company will probably bring on another investor to round out the seed round in the coming months, but the ARPA-E grant will make up most of the company’s planned seed round.

The funding environment on Sand Hill Road has been really challenged this year for cleantech companies, said Wessells. Investors that might have done a promising battery deal out of Stanford two years ago, today are being dissuaded by their limited partners to fund early stage cleantech firms. They see the risk as just too high.

And perhaps VCs are smart to be more risk averse this time around. Alveo Energy is still in the protoype and R&D phases. They’ve created version one of their prototype, and they published data on that technology about a month ago. Version two of the battery is what they’re working on now and hoping to scale up in size and performance. Currently generation two can provide battery power without degradation (batteries degrade over time) for between one and two calender years — the team hopes that the eventual commercialized battery will provide closer to five to ten years of battery life.

Power grid applications

Unlike some lithium ion batteries that are being used in the next-generation of electric cars, Alveo Energy’s batteries aren’t meant to provide intense bursts of power to move large objects. They have a lower voltage and deliver a smaller charge than typical lithium ion batteries — about one tenth the energy, one third the voltage, and one third the charge, said Wessells.

That’s because only one sixth of the ions in the Alveo batteries’ structure are electrochemically active. Alveo’s battery is made by taking Prussian blue dye and adding in some iron and copper to optimize a battery structure that can use a water-based electrolyte — the optimal structure just chemically works out that way.

Wessells says Huggins first raised the idea of using Prussian blue dye, which is electrochromic, back around the Christmas of 2009 — before that Wessells was working on trying to use lithium. The next two years were spent on devising the structure of Prussian blue dye, iron and copper. Alveo itself is a word that is related to the Latin for something like channels or honeycomb.

The structure also meant that Alveo’s batteries are relatively large and meant, mostly, to be stationary. They’ll be about three to four times bigger than a standard car battery, said Wessells, and will eventually be developed into a 1 kilowatt, 50 kilogram, prototype.

The potential low cost of such a battery is the real breakthrough for Alveo, and the reason why they’re willing to concede on voltage and charge. Wessells says that they’ll be able to make the battery for below $100 per kilowatt hour. Lead acid batteries, which are far cheaper than lithium ion batteries, are being made for around $150 to $200 per kilowatt hour. Lithium ion batteries are far, far more expensive.

Holy grail for clean power

Wessells says that such a low cost battery could be used for a variety of applications for the power grid, including providing storage for variable clean energy like solar and wind. Big battery farms could be built right onto solar and wind farms, to bank power during the night, and when the wind dies down.

A growing amount of companies, large and small, are working on this clean power problem, using both chemistry and software as a solution. One of the more well known startups is Ambri (formerly Liquid Metal Battery), which is also looking to use dirt cheap materials to make power grid batteries, and which is backed by Khosla Ventures and Bill Gates. Other startups like GELI, are looking to create a battery operating system that can better utilize batteries for the power grid.

Alveo Energy has a long road ahead of it. Even though it’s got an ambitious road map, don’t expect a commercialized version for at least three years from now, if not longer. And at that point Alveo also has a lot of options for how it can make its batteries at scale. It can raise money to just build out a factory, which is in the model of a company like A123 Systems — though, A123 Systems went bankrupt this year and is a cautionary tale. Alveo could also license, or straight out sell, its technology to one of the world’s massive battery makers. That would be a safer, less risky, way to go.

Eventually one of these startups or battery conglomerates — whether its backed by venture capitalists or not — will deliver a breakthrough in battery technology that cracks that fundamental problem with clean power. The future of making clean power low cost and mainstream, depends on it.

Image courtesy of Jurvetson, stevendamron, First Solar.

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GELI, or Growing Energy Labs Inc, has developed an operating system and set of software that can connect batteries for use on the power grid. Companies, building owners and utilities can buy the software and GELI-enabled batteries and use the batteries for services like providing energy storage for solar systems, or for things like storing and discharging energy when the demand for energy becomes out of balance with supply.

It’s still early days for smart grid battery services like this. Right now the grid has very little energy storage and power plants are basically producing the exact amount of energy that buildings and systems are consuming in real time. That makes the grid inefficient and costly. In the future when more clean power like solar and wind, as well as more electric vehicles, are added to the grid, more energy storage will be needed.

NIST has bought six “EOS Nodes,” which are computers with GELI’s operating system. NIST is going to connect the nodes to power converters and various battery systems and evaluate them for use in their Net Zero Home Project. For about a year now, NIST has been researching technologies that can make a home “net zero” or be able to produce and store as much energy as it consumes.

In GELI’s small lab and office space in the South of Market area of San Francisco, founder and CEO Ryan Wartena, and his team, have spent the last two years building large smart batteries that they call Energy Computers. While GELI is now focused on selling software, the company has ambitions to use its technology to usher in a vision of a smart “Internet of Energy” style power grid that has distributed, smart batteries running on their algorithms.

Home and building batteries are not as crazy as they might sound. Solar City recently unveiled in its IPO filing that it has 100 energy storage pilot projects, using batteries, under contract. In Japan, the market is just starting to emerge for batteries paired with home solar systems. At the smart grid conference Distributech early this year Panasonic was showing off a battery box that strings together hundreds of small format lithium-ion laptop batteries.

GELI recently went through the Greenstart program — a green digital accelerator in San Francisco — and raised a seed round through that program. Wartena told me earlier this year that GELI was looking to raise more money to kick off the business and start selling. GELI is an example of a so-called Clean Web company that uses information technology for cleantech aims. The Wall Street Journal reported this morning that a quarter of the investments that went into cleantech in 2011 went into Clean Web companies, compared to 15 percent in 2009.

In the same way that computers and the Internet have been shaped by storage, a connected energy system will need to rely on storage, too. The energy grid is currently a centralized system, where energy is created and distributed from a centralized location by utilities. But eventually energy could form into a decentralized network with solar rooftops and microgrids, not unlike the architecture of the Internet. GELI wants to provide the OS for that energy Internet.

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Each startup gets $115,000 and three months of marketing, design and business model guidance from Greenstart’s team. Previous startups that have gone through the program include the Android for battery startup GELI, and Scoot Networks, which makes an electric scooter sharing network. People Power has been around for a few years, and I’m interested to see how the Greenstart team tweaks their plans.

Earlier this year Greenstart restructured its program, and decided to focus solely on IT-based cleantech companies, and also boosted the size of its investment in the startups in its program. The pivot seemed like a good idea — early stage non-IT cleantech companies can be capital intensive to scale, can be difficult to vet without industry-specific experience, and also can take a long time to mature.

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GE, Ford and the University of Michigan are working on developing a tiny sensor system for a battery that when combined with analytics can extend the range of a battery in an electric vehicle. There are already sensors on the market that are trying to do something similar, but current sensors are too big to be able to fit in certain areas of the battery, says GE. GE will develop the wee system and pair it with real-time modelling of a battery’s behavior.

Such a system, which the group recently won a $3.1 million grant from the Department of Energy to build, could provide a substantial boost to electric car batteries. The range of a car battery — which is also chiefly tied to its cost — is the biggest problem for electric cars today. One hundred miles is about the average of the current electric cars on the market. The team has three years to create the first working version.

Sophisticated battery management system technology — which uses software in a car or on the power grid or on a cell phone — can help use batteries efficiently. Electric car companies Coda and Tesla Motors tout their battery management systems as some of their more important intellectual property. Other startups like GELI want to create a sort of operating system for batteries for the power grid.

Then there’s a startup like Pellion, which is using computer modelling to test out 10,000 potential cathode materials to fit with its magnesium anode for its battery. Basically they’re using a computer as a really smart brain to figure out the battery chemistry problem.

Because battery chemistry is such a hard problem, it’s pretty natural that we’re turning to the power of analytics, big data, cloud computing and all those other fun IT buzz words to solve it.

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GELI is a recent grad of the new green digital-focused accelerator Greenstart, and as part of that incubation process, the two-year-old GELI has emerged with a new focus on software, and has developed an operating system and set of software to connect batteries for use on the power grid. Part of GELI’s software will be open source, and you can think of the idea as creating the Android for power grid batteries.

The future of energy storage

O.K., let’s step back a minute and look at a snap shot of the current power grid. Right now the grid has very little energy storage and power plants are basically producing the exact amount of energy that buildings and systems are consuming in real time. That makes the grid inefficient and also costly, and in addition the lack of energy storage is a barrier when it comes to adding less reliable clean power sources like wind and solar (the sun only shines and the wind only blows at certain times).

New forms of energy storage are starting to be added to the power grid to combat this problem, and batteries are one of the types of energy storage that utilities — as well as building owners and home owners — are looking at. Batteries are attractive to utilities because the charge and discharge of a battery can be tightly controlled, so grid operators can use the battery systems for various grid applications. For example, groups of batteries can store and discharge energy when a utility sees that the demand for energy is becoming out of balance with supply (called “frequency regulation in grid geek speak).

GELI enters this picture because a universal operating system and algorithms will be what utilities can use to smartly control the batteries and deliver these services. This software layer could also enable new types of applications — ones that haven’t even been invented yet — because a GELI customer could dream up their own application and write their own program. Picture something as out-there as peer-to-peer energy sharing if every home had a big battery and solar panels and the software to control the exchange, says Wartena.

GELI isn’t the only company building the software to connect batteries and other forms of energy storage or devices. A company called Grid Mobility has built software and connected hardware to enable utilities to use hot water heaters (and other energy-consuming appliances) as on-demand grid storage in conjunction with local clean power when it’s available. Tendril is also looking to develop a sort of Android for energy layer for home energy consumption, electric cars and the smart grid. (For more on this idea, check out our research note from GigaOM Pro (subscription required): “The big data tsunami meets the next generation of smart grid companies.”)

Are you GELI?

GELI plans to launch its beta software in the coming weeks to some initial customers like Korean battery maker Kokam. GELI is targeting battery manufacturers as its customers, and the battery makers themselves will be the ones that will sell the batteries to the utilities and building owners. Wartena says initial markets that he thinks GELI-enabled batteries will land in include homes and buildings in Japan, commercial and industrial buildings in the U.S., and utility grid services in the U.S.

Through the Greenstart incubator program, GELI raised a small bit of a seed round, but is now working on raising more money to kick off the business and start selling. The Greenstart mentors were also able to convince Wartena to pivot from selling just the hardware (the energy computer battery box) to focus on the software. But tinkering with the energy computers was crucial to the team for developing (and continuing to develop) the software. The EC1 and EC2 (energy computers 1 & 2) are in GELI’s SOMA labs, and Wartena gestures excitedly at EC2 during our interview.

Software seems like a better way to go from a startup perspective, as the margins are higher, and the business model is less capital intensive than hardware. In addition, the huge battery giants in Asia will likely be able to benefit more from the software innovations born out of Silicon Valley than they would from a design to package a battery system in a box (which is what the EC is). In fact, Wartena recently went to a battery show in Japan and realized that there are already dozens of battery box systems from established Japanese companies. Those are our first target customers, Wartena said.

The Energy Internet needs storage

The idea of the EC1 & EC2, though, could one day be more common place than you’d think. Japanese buildings and even homes are beginning to add more and more solar and accompanying battery systems, now that the country is no longer going to rely on nuclear. At the smart grid conference Distributech early this year Panasonic was showing off a battery box that strings together hundreds of small format lithium-ion laptop batteries; a couple of battery stacks would be enough for a single family home, combined with an inverter.

Last month I reported that Tesla and SolarCity have been quietly making deals that could one day lead to dozens of sales of battery projects coupled with rooftop solar systems built at both residential and commercial buildings in California. SolarCity confirmed the energy storage plans with me, and the duo have submitted at least 70 applications for projects to attempt to receive rebates from the California Public Utility Commission’s Self-Generation Incentive Program (SGIP), which provides incentives for distributed energy generation.

In the same way that computers and the Internet have been shaped by storage, a connected energy system will need to rely on storage, too. The energy grid is currently a centralized system, where energy is created and distributed from a centralized location by utilities. But eventually energy could form into a decentralized network with solar rooftops and microgrids, not unlike the architecture of the Internet. GELI wants to provide the OS for that energy Internet.

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At the event at the Greenstart offices, five startups focused on using software to change energy and transportation, showed off their ideas to a packed house of hundreds of investors, potential partners and the media. The startups seemed as excited to present their ideas as the investors were to hear their pitches.

But just don’t call the crop of five companies greentech firms. There’s a lot investors that came to look at these five companies because they are just interested in technology and software, not necessarily in greentech, explained Greenstart partner Dave Graham to me. Greenstart shifted its strategy from incubating broad greentech companies last year to solely focusing on working with digital green companies this year.

And the move has paid off. Greentech or cleantech, as an investment class has a become a dirty word these days. There’s just been too many missteps and investors and entrepreneurs that have lost a lot of money. And, at the same time, there’s been a rush of web and mobile-focused folks that have started to make a real killing (Instagram). As I wrote in this article, I’m not even sure cleantech as an umbrella moniker will survive for too much longer.

However, the overarching trends of a growing population, constrained resources (energy, food and water), people moving to cities, and information technology as a way to manage these resources, won’t go away for decades. And the class of companies that presented at Greenstart’s Demo day all fit into this digital green description.

The digital green players

One of the most buzzy and fun ideas came from Scoot Networks, an electric scooter sharing network, which I covered last month, and which we’ll post a Green Overdrive show around this week. Scoot Networks is still in alpha phase, but is starting to roll out its e-scooter network to companies first (think big Internet companies and co-working spaces) as a way to test the concept and the market. Later on — and after they get the required insurance coverage — the company will eventually open up the network to everyone else, in the hopes of becoming the Zipcar for electric scooters.

Scoot Networks is looking to continue to raise a seed round of $700,000 (it’s raised $300,000 of that) and eventually wants to raise $5 million in a Series A round. The low cost of the electric scooters (they come from China), and the fact that they use an iPhone app as the bulk of their scooter control system (your phone fits snugly into the dashboard) means that Scoot Networks will have high margins, said Scoot CEO and co-founder Michael Keating during his presentation.

Another company that stood out was GELI (Growing Energy Labs Incorporated), which is developing software that can control and monitor batteries for the power grid — think the Android for batteries. The system can help companies and utilities make money off of using batteries for various applications like buying and selling energy, demand response, and energy load shifting. GELI is looking to raise a seed round of $750,000 to ship product to its first customers.

The other three companies that Greenstart picked and which pitched to investors on Wednesday included Ridepal, a startup organizing Google-style commuter buses for companies, kWhours, which has developed an iPad app for building energy efficiency professionals, and finally Smart Grid Billing, which makes software to enable real time pricing for utilities. Looks like “digital green,” “cleanweb,” “collaborative consumption,” “green IT,” or whatever people want to call it these days, is going to be the leading way that investors and entrepreneurs will be able to lead to more sustainable changes — and even make a little money.

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