Energy Storage

Fast Facts About
Energy Storage

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Energy storage allows energy to be saved for use at a later time. It helps maintain the balance between energy supply and demand, which can vary hourly, seasonally, and by location. Energy can be stored in various forms, including:

• Chemical (e.g., coal, biomass, hydrogen)
• Potential (e.g., hydropower)
• Electrochemical (e.g., batteries)
• Thermal (e.g., molten salt, hot bricks)
• Mechanical (e.g., flywheels, compressed air storage, pumped hydro)

When people talk about energy storage, they typically mean storing energy for our power grids.  Energy storage decouples when supply is created from when demand occurs, facilitating the integration of intermittent renewable energy sources like wind and solar. 

Energy storage technologies also provide ancillary services that help keep the power grid stable and reliable, such as:

• Frequency control: Ensuring the grid’s frequency stays within a safe range to prevent brownouts and blackouts
• Capacity services: Providing backup power when demand is especially high (e.g., during a multi-day heatwave)
• Ramping services: Quickly ramping up or down to match demand (e.g., in the evening, storage can immediately supply electricity to compensate for the lack of solar power)

Depending on market conditions, energy storage systems can also participate in energy arbitrage — storing energy when prices are low and selling when prices are high (e.g., storing electricity during the day in California when electricity prices are at their lowest due to an abundance of solar energy and selling it in the evening when the sun sets and demand peaks).

The main energy storage technologies used to support the grid are pumped storage hydropower (pumped hydro) and batteries. Pumped hydro is only growing modestly, while battery storage, mainly lithium-ion batteries, is rapidly expanding for many reasons:

• Batteries are modular, installable anywhere
• Batteries aren’t constrained by geography, unlike pumped hydro
• Batteries can ramp up quickly to support demand, making them essential for supporting renewable integration and grid flexibility
• Batteries have become economic, and prices continue to drop as battery manufacturing scales for EVs and consumer electronics

Energy storage projects are rated on power capacity (e.g., MW) and energy capacity (e.g., MWh). The duration of the energy storage project is determined by the stored energy divided by the power supplied. 

$$Duration\hspace{5px}(hours) = {Energy\hspace{9px}Capacity\hspace{7px}(MWh)\over Power\hspace{8px}Capacity\hspace{7px}(MW)}$$

For example, a battery might have 100 MW of power capacity and 400 MWh of energy capacity, meaning it can deliver 100 MW continuously for 4 hours. Energy storage is often described by its duration (e.g., 4-hour battery storage) because that lets grid operators know how long a device can run at its maximum output before it’s empty.

See our The Grid: Electricity Transmission, Industry, and Markets page for more information about the grid and energy markets.

Significance

Why Do We Need Energy Storage Now?

Energy Storage Technologies

Battery energy storage overtook pumped hydro for energy storage power capacity (GW) – the amount of power available at any given time. However, pumped hydro has higher energy capacity (GWh) globally.

Both distributed and centralized storage can be grid-connected or standalone. However, centralized storage is almost always grid-connected.

For more information about the grid, visit The Grid: Electricity Transmission, Industry, and Markets page.

Global Supply and Demand of Battery Storage

Lithium-Ion Battery Materials and Supply

Mineral Resourcing Concerns

• Human rights challenges including child labor, slavery, and unsafe working conditions
• Environmental degradation such as water, land, and air pollution, heavy metal leakage, habitat loss, deforestation
• Human health consequences including lung and cardiovascular problems, birth defects
• Economic injustice as resource-rich countries like the DRC (which supplies 69% of global cobalt) see little economic benefit from that production
• Geopolitical risks from China's dominance of the supply chain (80% of battery manufacturing, 60% ownership share)

See our Energy, the Environment, and Justice page for more information.

*Behind-the-meter data also includes off-grid capacity.

Battery Growth and Pricing

Cost Range (LCOS) for 4-Hour Storage in Different Scenarios (US$/MWh)

Utility-scale storage is much cheaper than residential scale.

Energy Storage Has Many Potential Applications and Roles

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