SustainX, a startup in West Lebanon, New Hampshire, has received $20 million in venture capital to test its compressed-air energy storage technology on a large scale.

The technology could allow for a wider use of compressed-air storage, which in turn could make renewable energy more attractive, since it would allow wind power generated at night to be stored until daylight hours, when demand is higher. If it's successful, the technology could decrease the need to build natural gas plants to supply peak power demand.

The need for storage is increasing as governments mandate the use of more renewable energy. SustainX has demonstrated a 40-kilowatt prototype and is now completing a one-megawatt system, slated to be deployed next year with the power company AES.

In conventional compressed-air storage, electricity is used to compress air, which is stored in underground caverns or aquifers. That air is then released to drive a turbine-generator to produce electricity when needed. Such storage costs roughly a tenth of what battery storage costs, but it isn't used much because in large part because it requires a location with underground storage space. SustainX's system eliminates this problem because it can efficiently use above-ground storage tanks rather than caverns.