One major advantage this would have over chemical batteries (Lithium-Ion or otherwise) is that it should allow for many, many more cycles. You would have to replace cables and motors and such at some point, but the expensive components - the hole and the weight - should last near-indefinitely.

It certainly appears more expensive than pumped storage, but as they say, it doesn't require a convenient mountain and lake. That makes for much more flexibility in placement, and the closer you can place the storage to the demand, the less is wasted in transmission, and the less storage you ultimately need. That said, the pumped heat storage design[1] that hit the homepage yesterday would have all those same advantages, and although the efficiency would be slightly lower, it looks much cheaper to build.

[1]: http://www.windpowerengineering.com/featured/business-news-p...