With the electric car business taking longer than expected to get off the ground, battery manufacturers are turning an increasing amount of attention to grid storage projects to pick up the slack. Ener1 (Nasdaq: HEV) signed a $40 million deal in Russia last year, and last week A123 Systems (Nasdaq: AONE) made a splash announcing a 20 megawatt project with AES Energy Storage in Chile. The deals aren't going to grab headlines like an auto deal with Fisker or BMW, but these deals are just as important to the future of the battery industry.

The project will help AES manage fluctuations in the electrical system, allowing the generator to sell more of the power it produces to the grid. This is important partly because renewable power sources will need the same type of energy management to deliver a consistent power source to the grid. If batteries can prove to be effective in managing supply and demand fluctuations, they could be a standard part of managing a more renewable electrical grid in the future.

And momentum is starting to pick up. This is the second such development with AES in Chile, so the first project must have been a success. Don't count on annual orders just yet, but a repeat customer is the first step to this becoming a consistent business. Grid storage/management projects are still relatively small for now. A123 has shipped just 35 MW of advanced energy storage units worldwide, but the potential is big. With more renewable projects, the electric supply swings will also increase and batteries may be able to provide just the buffer that's needed.

As Valence Technology (Nasdaq: VLNC) gains traction in the commercial vehicle market and Advanced Battery Technologies (Nasdaq: ABAT) expands capacity in China, battery makers need to expand the customer base just to survive. Ener1 and A123 Systems are gaining some traction in the grid business. We still need to see more progress as the year goes on, but both are taking small steps in the right direction.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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