Energy Storage

Fast Facts About
Energy Storage

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)

When people talk about energy storage, they typically mean storing electricity for our power grids. 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 and batteries. Pumped storage hydropower accounts for about two-thirds of global storage capacity but 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 storage hydropower
• 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

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

Why Do We Need Energy Storage Now?

Energy Storage Technologies

Though pumped hydro currently dominates global storage capacity, electrochemical is growing the fastest. Generally, pumped hydro storage is used for longer-term storage compared to battery storage, which is often used on a day-to-day scale. 

Both distributed and centralized storage can be system integrated or standalone. However, centralized storage is almost always system integrated.

Global Supply and Demand of Battery Storage

Lithium-Ion Battery Materials and Supply

Mineral Resourcing Concerns

• Human rights challenges (e.g., child labor, slavery)
• Environmental impacts (e.g, water, land, and air pollution, heavy metal leakage, habitat loss)
• Human health problems (e.g., lung and cardiovascular problems, birth defects)

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

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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