In his State of Union speech President Obama called for a year of action. In particular he urged for a “shift to a cleaner energy economy.” The chances that President Obama will be able to legislate major strides towards more clean energy in our current gridlocked Congress are slim. But 2014 might just be the year when we move towards a less energy intensive economy through smart energy storage.

As Katie Fehrenbacher of Gigaom recently pointed out, the power grid is looking more and more like the Internet with distributed computing and smart systems. The biggest challenge in America’s grid today is that utilities are required to build enough capacity to meet the highest level of demand. But, through new predictive software, we can reduce peak demand and save a lot of energy and money along the way.

Energy efficiency has captured national attention for the past several decades, and rightly so. But much of the low-hanging fruit is gone — lightbulbs have been changed, homes have been weatherized and smart thermostats have become so hip that Google paid $3.2 billion for thermostat-maker Nest. The next frontier is to use technology to improve the way our overall grid functions, an idea we’d like to call “power efficiency”.

The team at GCN has always been fascinated by the prospect that we can use software algorithms as a substitute for more hardware, essentially by increasing the utilization and efficacy of what already exists. The challenge is to apply innovation to the biggest machine in the world, our electric grid.

Our grid started in 1882 as a small power station in New York that provided power to 400 lamps. After the Great Depression, big government projects brought power to the masses and regulation to utility companies, creating the grid we have today. Our grid was the greatest engineering feat of the 20th century but it can’t keep up with 21st century demands.

In the 21st century we need to move towards a more decentralized system with smart technologies to use power efficiently and enable the addition of more clean, distributed power. We’re beginning to get there.

California has led the way by passing the first statewide energy storage directive in the country last fall. Governor Cuomo has begun championing energy storage in New York. Just last month the U.S. Department of Energy released a Grid Energy Storage report outlining the challenges and opportunities in the energy storage marketplace.

Our union might be in a state of political stagnation but the state of energy storage holds great promise for our country.