What is energy storage?

The ability to store energy can facilitate the integration of clean energy and renewable energy into power grids and real-world, everyday use. For example, electricity storage through batteries powers electric vehicles, while large-scale energy storage systems help utilities meet electricity demand during periods when renewable energy resources are not producing energy.

The expansion of renewable energy made possible by energy storage can supplant and reduce some fossil fuel-based energy production and environmental impacts. This advancement can help countries achieve their net-zero goals.

The battery, one of the most famous inventions designed to store electricity, dates back to 1800. Italian physicist Alessandro Volta used a pile of nickel disks, zinc disks and saltwater-soaked pads to deliver electrical current. Some 60 years later, French physicist Gaston Planté invented a rechargeable battery by using lead and sulphuric acid—known as a lead-acid battery. 

Then, in the early 19th century, American inventor Thomas Edison created a different type of rechargeable battery, which used nickel and iron. Canadian chemical engineer Lewis Urry later developed the prototype for the modern alkaline battery in 1957 after researching Edison’s use of zinc.

Two other long-used forms of energy storage are pumped hydro storage and thermal energy storage. Pumped hydro storage, which is a type of hydroelectric energy storage, was used as early as 1890 in Italy and Switzerland before spreading around the world.

Thermal energy storage (TES) was in use in ice boxes designed for food preservation in the early 19th century. Modern TES systems have helped heat and cool buildings since the early 20th century.

Electricity generation capacity in energy storage systems can be measured in two ways:

1. Power capacity, or the maximum amount of electricity that is generated continuously, is measured in watts, such as kilowatts (kW), megawatts (MW) and gigawatts (GW).
   
   
2. Energy capacity, or the total amount of energy stored, is measured in watthours, such as kilowatthours (kWh), megawatthours (MWh) and gigawatthours (GWh).

Electrical energy storage systems (ESS) commonly support electric grids. Types of energy storage systems include:

• Pumped hydro storage
• Battery energy storage systems
• Flywheels
• Compressed air energy storage
• Thermal energy storage
• Hydrogen storage
• Supercapacitors

Pumped hydro storage, also known as pumped-storage hydropower, can be compared to a giant battery consisting of two water reservoirs of differing elevations. The so-called battery “charges” when power is used to pump water from a lower reservoir to a higher reservoir.

The energy storage system “discharges” power when water, pulled by gravity, is released back to the lower-elevation reservoir and passes through a turbine along the way. The movement of water through the turbine generates power that is fed into electric grid systems.

Pumped hydro storage is the most deployed energy storage technology around the world, according to the International Energy Agency, accounting for 90% of global energy storage in 2020.¹ As of May 2023, China leads the world in operational pumped-storage capacity with 50 gigawatts (GW), representing 30% of global capacity.²

A battery energy storage system (BESS) is an electrochemical storage system that allows electricity to be stored as chemical energy and released when it is needed. Common types include lead-acid and lithium-ion batteries, while newer technologies include solid-state or flow batteries.

Lithium-ion batteries currently dominate the market for grid-scale battery storage. As of 2023, the largest lithium-ion battery storage facility in the world was in Monterrey County, California, with a capacity of 550 megawatts.³ Lithium-ion batteries are also used in electric vehicles.

Battery storage solutions are expected to overtake pumped hydro storage in market share in the coming years, as countries around the world invest more heavily in grid-scale battery storage solutions. In the US, for instance, installed battery capacity is expected to double in 2024, with most new BESS installations located in Texas and California.⁴

While much of the world’s BESS investments occur in large, advanced economies, developing countries receive assistance for battery storage installations through programs such as the World Bank’s Energy Storage Partnership.

A flywheel is a mechanical energy storage device in which a rotating wheel stores kinetic energy. Electricity is used to “charge” the wheel by making it spin at high speeds, while the wheel’s rotation at a constant speed stores that energy.

Flywheel energy storage systems (FESS) are considered an energy-efficient technology but can discharge electricity for shorter periods of time than other storage methods. While North America currently dominates the global flywheel market (large flywheel energy storage systems can be found in New York, Pennsylvania and Ontario), demand is increasing in Europe.⁵

This energy technology works by using electricity to compress air and store it underground, often in caverns. To generate electricity, the air is released and run through a turbine that is linked to an electric generator. A handful of compressed air energy storage (CAES) plants are operational around the world, including in China, Canada, Germany and the US.

Thermal energy storage (TES) can be found at solar-thermal electric power plants that use concentrating solar power (CSP) systems. Such systems use concentrated sunlight to heat fluid, such as water or molten salt. While steam from the fluid can be used to produce electricity immediately, the fluid can also be stored in tanks for later use.

Electricity can be converted into hydrogen for storage through the electrolysis of water—using electricity to split water molecules into hydrogen and oxygen. The energy is released when hydrogen is used as a fuel for electricity generation and for transportation. Hydrogen storage is considered a critical technology for fuel cells, which generate electricity through chemical reactions.

Supercapacitors are electrochemical devices that store energy by collecting electric charges on electrodes (electrical conductors) filled with an electrolyte solution. They can discharge electricity quickly and have long lifecycles. They are sometimes considered potential replacements for lithium-ion batteries but have lower energy density.⁶

The benefits of energy storage systems extend to electric grids due to their capability to compensate for fluctuating energy supplies. An ESS can hold excess electricity when it’s available, often during periods of low electricity consumption at night and in the morning. Then, an ESS can contribute electricity supply at times when primary energy sources aren’t contributing enough, especially during peak hours of energy usage, such as in the late afternoon and evening.

In addition, ESS systems that are owned by grid customers can provide emergency backup power during grid outages and be integrated into microgrids. 

The flexibility that ESS provides to power grids can help integrate renewable, green energy (both utility-scale installation and smaller, distributed energy resources) into power systems previously reliant on fossil fuels. Renewable energy storage projects can help stabilize power flow by providing energy at times when renewable energy sources aren’t generating electricity. For instance, they supply power at night for solar energy installations with photovoltaic cells or during calm days when wind turbines don’t spin.

Conversely, ESS is also helpful in cases when renewable energy sources produce excess electricity—solar power generation on sunny afternoons or wind power generation on windy days, for example. Renewable energy storage solutions ensure that excess electricity doesn’t go to waste.

The support that energy storage provides to electric grids is considered key in helping countries transition to clean energy and achieve a net-zero future. As countries increase their use of renewable energy, they can reduce their reliance on fossil fuel power. This shift can significantly curb their greenhouse gas emissions and help them achieve sustainability in energy consumption and production.

The length of time an ESS can supply electricity varies by energy storage project and type. Energy storage systems with short durations supply energy for just a few minutes, while diurnal energy storage supplies energy for hours. Pumped hydro, compressed-air and some battery energy storage systems provide diurnal storage, while other battery systems and flywheels support short duration storage.

High energy costs and short storage durations can be hurdles in the adoption of some energy storage systems, but researchers are working on surmounting those hurdles. Innovations in energy technologies might enable low-cost electric energy storage systems to supply power for 10 hours or more, which could further stabilize power supplies as more renewable energy sources come online.

The development of such long-duration energy storage (LDES) also has the support of policymakers, with countries such as Spain, the United Kingdom and the US developing plans to encourage LDES projects.