As renewable energy sources like solar and wind power grow in popularity and availability, modernizing our energy grid with advanced storage technology is becoming increasingly important. Energy storage allows excess power generated from renewable sources to be saved and used at a later time, helping to balance energy supply and demand over hours, days, and seasons. Different types of energy storage technologies allow power to be stored in various forms, including chemical batteries, flywheels, compressed air and pumped hydroelectric storage.
Battery Technologies Lead the Way
Energy Storage System in technologies have emerged as a major driver in the energy storage sector due to their versatility and suitability for both large and small-scale applications. Lithium-ion battery chemistries currently dominate the marketplace due to their high energy density and relative affordability. Enormous lithium-ion "megabatteries" are becoming mainstream additions to energy grids and microgrids worldwide. Lithium-ion technologies continue to make incremental improvements in energy and power capacity, while costs steadily fall due to private sector investment and mass production. Beyond lithium-ion, next-generation chemistries like lithium-sulfur and solid-state batteries hold promise for even higher performance in the future.
Pumped Storage Still Reigns for Large-Scale Needs
For storing and discharging massive amounts of energy over longer periods, pumped hydroelectric storage (PHS) remains the most widely-used storage technology to date. PHS facilities pump water between upper and lower reservoirs during off-peak hours when renewable energy supplies exceed demand, then generate hydroelectric power by releasing the water through turbines when energy is needed. An estimated 99% of global energy storage capacity currently comes from PHS, yet new projects face significant cost and environmental hurdles. Emerging technologies like compressed air energy storage (CAES) potentially offer lower cost solutions for multiday energy storage needs on a very large scale.
Applications Range From Homes to Utilities
Energy storage applications span all levels - from behind-the-meter home batteries that time-shift solar power for homeowners, to front-of-the-meter "virtual power plants" owned by utilities that help balance regional electric grids. Transportation sector applications are also emerging, like battery-electric vehicle charging infrastructure that enables two-way power flows to support the grid during peak periods. By smoothing out intermittency issues, energy storage enables higher adoption of distributed and renewable power generation across the entire energy economy. It plays a critical role in the transition away from fossil fuels toward cleaner, decentralized and digitally-enabled energy systems.
Policy and Business Model Innovation Drive Deployment
Addressing economic and regulatory barriers will be key to accelerated energy storage adoption. As upfront hardware costs decline, innovative business models and tariff structures can monetize the many value streams that energy storage provides, including capacity, energy and ancillary grid services. Jurisdictions worldwide are implementing policies like investment tax credits and rebate programs to stimulate private sector deployment. The formation of "virtual power plant" aggregators is also a promising model for bundling distributed storage assets into grid-scale virtual resources. With the right market and policy foundations in place, energy storage has enormous long-term potential to revolutionize global energy systems.
As the costs of key energy storage technologies like lithium batteries continue trending downward, deployment is expected to rapidly increase this decade across many applications and scales. Battery-based storage and new storage concepts will play a pivotal role in maximizing the integration of renewable resources into electric grids. With supportive policies and market mechanisms to unlock value, energy storage can help decarbonize energy systems worldwide and enable ubiquitous access to clean, affordable and reliable power. Major deployments are already underway to test and demonstrate storage-enabled grid architectures, setting the stage for transformative impacts in the coming years. Energy storage stands poised to become a cornerstone technology empowering the global transition to renewable energy.
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