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Grid energy storage, also known as large-scale energy storage, is a set of technologies connected to the electrical power grid that Energy storage for later use. These systems help balance supply and demand by storing excess electricity from variable renewables such as Solar power and inflexible sources like nuclear power, releasing it when needed. They further provide essential grid services, such as helping to Black start after a power outage.
, the largest form of grid storage is pumped-storage hydroelectricity, with utility-scale batteries and behind-the-meter batteries coming second and third. Lithium-ion batteries are well suited for short-duration storage (under 8 hours), due to their lower cost and sensitivity to degradation at high states of charge. Flow battery and compressed air energy storage may provide storage for medium-duration. Two forms of storage are suited for long-duration storage: green hydrogen, produced via electrolysis and thermal energy storage.
Energy storage is one option to making grids more flexible. Another solution is the use of more dispatchable power plants that can change their output rapidly, for instance peaking power plants to fill in supply gaps. Demand response can shift load to other times and Interconnector between regions can balance out fluctuations in renewables production.
The price of storage technologies typically Experience curve. For instance, lithium-ion batteries have been getting some 20% cheaper for each doubling of worldwide capacity. Systems with under 40% variable renewables need only short-term storage. At 80%, medium-duration storage becomes essential and beyond 90%, long-duration storage does too. The economics of long-duration storage is challenging, and alternative flexibility options like demand response may be more economic.
Electricity storage is one of the three key ways to replace flexibility from Fossil fuel in the grid. Other options are demand-side response, in which consumers change when they use electricity or how much they use. For instance, households may have cheaper night tariffs to encourage them to use electricity at night. Industry and commercial consumers can also change their demand to meet supply. Improved network interconnection smooths the variations of renewables production and demand. When there is little wind in one location, another might have a surplus of production. Expansion of transmission lines usually takes a long time.
| +Potential roles of energy storage in the grid ! !Consumption !Network !Generation |
Providing short-term flexibility is a key role for energy storage. On the generation side, it can help with the integration of variable renewable energy, storing it when there is an oversupply of wind and solar and electricity prices are low. More generally, it can exploit the changes in prices of electricity over time in the wholesale market, charging when electricity is cheap and selling when it is expensive. It can further help with grid congestion (where there is insufficient capacity on transmission lines). Consumers can use storage to use more of their self-produced electricity (for instance from rooftop solar power).
Storage can also be used to provide essential grid services. On the generation side, storage can smooth out the variations in production, for instance for solar and wind. It can assist in a black start after a power outage. On the network side, these include frequency regulation (continuously) and frequency response (after unexpected changes in supply or demand). On the consumption side, storage can improve the quality of the delivered electricity in less stable grids.
Investment in storage may make some investments in the transmission and distribution network unnecessary, or may allow them to be scaled down. Additionally, storage can ensure there is sufficient capacity to meet peak demand within the electricity grid. Finally, in off-grid home systems or Mini-grid, electricity storage can help provide energy access in areas that were previously not connected to the electricity grid.
Recent advances in artificial intelligence and machine learning allow for real-time optimization of energy storage assets. Reinforcement learning algorithms are being explored to maximize arbitrage, manage degradation, and respond to market signals, particularly in complex and high-renewable systems.
Costs of batteries are declining rapidly; from 2010 to 2023 costs fell by 90%. , utility-scale systems account for two thirds of added capacity, and home applications (behind-the-meter) for one third. Lithium-ion batteries are highly suited to short-duration storage (<8h) due to cost and degradation associated with high states of charge.
, there have been more than 100 V2G pilot projects globally. The effect of V2G charging on battery life can be positive or negative. Increased cycling of batteries can lead to faster degradation, but due to better management of the state of charge and gentler charging and discharging, V2G might instead increase the lifetime of batteries. Second-hand batteries may be useable for stationary grid storage for roughly 6 years, when their capacity drops from roughly 80% to 60% of the initial capacity. LFP batteries are particularly suitable for reusing, as they degrade less than other lithium-ion batteries and recycling is less attractive as their materials are not as valuable.
Sodium-ion batteries are a possible alternative to lithium-ion batteries, as they are less flammable, and use cheaper and less critical materials. They have a lower energy density, and possibly a shorter lifespan. If produced at the same scale as lithium-ion batteries, they may become 20% to 30% cheaper. Iron-air batteries may be suitable for even longer duration storage than flow batteries (weeks), but the technology is not yet mature.
| +Technology comparison |
, there have been a number of demonstration plants where hydrogen is burned in Gas turbine, either co-firing with natural gas, or on its own. Similarly, a number of coal plants have demonstrated it is possible to co-fire ammonia when burning coal. In 2022, there was also a small pilot to burn pure ammonia in a gas turbine. A portion of existing gas turbines are capable of co-firing hydrogen, which means there is, as a lower estimate, 80 GW of capacity ready to burn hydrogen.
Hydrogen can be stored aboveground in tanks or underground in larger quantities. Underground storage is easiest in , but only a certain number of places have suitable geology. Storage in porous rocks, for instance in empty Gas field and some , can store hydrogen at a larger scale, but this type of storage may have some drawbacks. For instance, some of the hydrogen can leak or react to form Hydrogen sulfide or methane.
PSH is particularly effective for managing daily fluctuations in energy demand. During periods of low demand, water is pumped to a higher-elevation reservoir, and during peak demand, the stored water is released to generate electricity through turbines. The system has an efficiency rate of 75% to 85% and can quickly respond to changes in demand, typically within seconds to minutes.
While traditional PSH systems require specific geographical conditions, alternative designs have been proposed. These include using deep or constructing hollow structures on the seabed, where the ocean serves as the upper reservoir. However, PSH construction is often expensive, time-consuming, and can have significant environmental and social impacts on nearby communities. Installing Floating solar on reservoirs, can increase the efficiency of PSH systems. These panels reduce water evaporation and benefit from cooling by the water surface, which also improves their energy generation efficiency.
Dams usually have multiple purposes. As well as energy generation, they often play a role in flood defense and protection of ecosystems, recreation, and they supply water for irrigation. This means it is not always possible to change their operation much, but even with low flexibility, they may still play an important role in responding to changes in wind and solar production.
Thermal energy storage is also used in combination with concentrated solar power (CSP). In CSP, solar energy is first converted into heat, and then either directly converted into electricity or first stored. The energy is released when there is little or no sunshine. This means that CSP can be used as a dispatchable (flexible) form of generation. The energy in a CSP system can for instance be stored in molten salts or in a solid medium such as sand.
Finally, heating and cooling systems in buildings can be controlled to store thermal energy in either the building's mass or dedicated thermal storage tanks. This thermal storage can provide load-shifting or even more complex ancillary services by increasing power consumption (charging the storage) during off-peak times and lowering power consumption (discharging the storage) during higher-priced peak times.
For power applications (for instance around ancillary services or ), a similar metric is the annuitized capacity cost (ACC), which measures the lifetime costs per kW. ACC is lowest when there are few cycles (<300) and when the discharge is less than one hour. This is because the technology is reimbursed only when it provides spare capacity, not when it is discharged.
The cost of storage is coming down following technology-dependent experience curves, the price drop for each doubling in cumulative capacity (or experience). Lithium-ion battery prices fall rapidly: the price utilities pay for them falls 19% with each doubling of capacity. Hydrogen production via electrolysis has a similar learning rate, but it is much more uncertain. Vanadium-flow batteries typically get 14% cheaper for each doubling of capacity. Pumped hydropower has not seen prices fall much with increased experience.
| +Storage requirements based on the share of variable renewable energy (VRE). For energy storage, this is the energy stored at a given time, not the total over the year !VRE share !Power (% of peak demand) !Energy storage (% of annual demand) | ||
| 50% | Less than 20% | 0.02% |
| 80% | 20–50% | 0.03–0.1% |
| 90% | 25–75% | 0.05–0.2% |
Like with renewables, storage will "cannibalise" its own income, but even more strongly. That is, with more storage on the market, there is less of an opportunity to do arbitrage or deliver other services to the grid. How markets are designed impacts revenue potential too. The income from arbitrage is quite variable between years, whereas markets that have capacity payments likely show less volatility.
Electricity storage is not 100% efficient, so more electricity needs to be bought than can be sold. This implies that if there is only a small variation in price, it may not be economical to charge and discharge. For instance, if the storage application is 75% efficient, the price at which the electricity is sold needs to be at least 1.33 higher than the price for which it was bought. Typically, electricity prices vary most between day and night, which means that storage up to 8 hours has relatively high potential for profit.
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