GE, AES and others are active in the storage sector AESStorage products smooth out fluctuations in the grid.Tesla Motors Inc. may be taking its time to become a virtual power plant offering batteries to home and businesses, but that doesn’t mean investors with an eye on the sector have to wait. Storage is widely viewed as a key to more widespread use of renewable energy. Batteries could pick up where renewables sometimes leave off—the sun does not always shine, and the wind does not always blow. What many fail to take into account, however, is that storage already plays a role in our century-old power grid. Companies big and small, old and new have waded into the arena of energy storage. Storage smooths out fluctuations in the grid and decouples generation and consumption, said Matt Roberts, executive director of the Energy Storage Association. It helps the grid run more efficiently and more cheaply. The power grid is finicky—tiny fluctuations in frequency, for instance, can make transformers explode. And then there are fluctuations in demand—such as those caused by a heat wave, or the evening spike as more people flip their switches. Peaks in demand are currently handled by so-called “peaker” power plants, which are usually powered by natural gas and are expensive to run. Here are some of the major companies to watch in the storage arena (besides Tesla TSLA, +0.18% : AES Corp. AES, +3.69% and General Electric Co. GE, +1.30% have units dedicated to the battery storage business, called AES Energy Storage and GE Energy Storage. GE has scaled back production at its storage plant in upstate New York, however, according to local news reports in January. LG Chem Ltd. 051910, +3.08% is South Korea’s top chemical company. It makes car batteries, that power General Motors Co’s GM, -1.69% Chevy Volt, an electric car, among others, and even smaller batteries for cellphones, vacuum cleaners, and other products. LG Chem also supplies batteries for storage and it plans to expand that side of the business “aggressively,” according to its website. SunEdison Inc. SUNE, -0.04% earlier this month said it was buying Solar Grid Storage LLC, a Philadelphia startup that combines solar PV systems and energy storage. Terms of the deal were not disclosed, but the company said it aims to “increase the value of the solar and wind projects that we finance, develop, own, and operate by improving their availability and ability to interact with the grid.” Not public yet, but worth getting on the radar: Switzerland-based Alevo, and Stem Inc. and Advanced Microgrids Solutions, both based in California. Alevo has raised $1 billion in private funding, which is viewed as high for the field. In October, it bought a former cigarette factory in North Carolina, where it plans to start producing its batteries later this year. Stem, based in Millbrae, in the San Francisco Bay Area, and Advanced Microgrid Solutions, also of San Francisco, in November won big chunks of a 250-megawatt storage contract with utility Southern California Edison (85 mw for Stem and 50 mw for Advanced Microgrid). In January, Stem closed on a $27 million equity financing round, which included the venture capital arm of French oil company Total SA. The Energy Storage Association and GTM Research said earlier this month they expect the storage market to grow to 220 megawatts deployed this year, a 250% jump from 62 megawatts deployed in 2014. Claudia Assis