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The Understand Energy Learning Hub is a cross-campus effort of the Precourt Institute for Energy.

Energy Storage

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Fast Facts About
Energy Storage

Energy storage allows energy to be saved for use at a later time. Energy can be stored in many forms, including chemical (piles of coal or biomass), potential (pumped hydropower), and electrochemical (battery). Energy storage can be stand-alone or distributed and can participate in different energy markets (see our The Grid: Electricity Transmission, Industry, and Markets page for more information about energy markets).

Energy storage is a valuable tool for balancing the grid and integrating more renewable energy. When energy demand is low and production of renewables is high, the excess energy can be stored for later use. When demand for energy or power is high and supply is low, the stored energy can be discharged. Due to the hourly, seasonal, and locational variability of renewable production, energy storage is critical to facilitating the clean energy transition.

Pumped hydropower storage represents the largest share of global energy storage capacity today (>90%) but is experiencing little growth. Electrochemical storage capacity, mainly lithium-ion batteries, is the fastest-growing.


Why Do We Need Energy Storage Now?

Resilience against weather-related outages

Increase in electricity demand with electrification of buildings and transportation and global growth

Renewables growth on the grid increases the need for flexibility to balance demand with supply

Faster ramp up times than peaker plants


Energy Storage Technologies

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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. 


Distributed vs. Centralized Storage

Distributed Storage: Located on the consumer side of the meter, often in combination with consumer-side energy production like rooftop solar panels

Centralized Storage: Located on the production side of the meter, often in combination with utility scale renewables

System Integrated vs. Standalone Storage

System Integrated Storage: Connected to the main electrical grid and provides grid services

Standalone Storage: Not connected to the main electrical grid, often providing rural storage needs

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

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Lithium-Ion Battery Materials and Supply

Cobalt

DRC produces 69% 🇨🇩

Graphite

China produces 67% 🇨🇳

Lithium

Australia produces 52% 🇦🇺
Chile produces 25% 🇨🇱

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

Global Grid-Scale Battery Storage Annual Additions

⬆1133% increase
(2017-2022)

2017: 0.9 GW added
2022: 11.1 GW added

Battery Prices Are Dropping Due to Lower Mineral and Manufacturing Costs*

⬇66% decrease
in average global battery price (2015-2023)

*Battery prices vary by region, cheapest in China

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

Utility-scale PV (100MW) + Storage (50 MW)
$110 - $131

Utility-Scale Standalone (100MW)
$200 - $257

Residential PV (0.01 MW) + Storage (0.006 MW)
$663 - $730

Residential Standalone (0.006 MW)
$1,215 - $1,348

Utility scale storage is much cheaper than residential scale.


Energy Storage Has Many Potential Applications and Roles

Generation

  • Address supply disruptions
  • Compensate for variability of renewable resources
  • Provide peaking capacity

Transmission

  • Defer transmission upgrades
  • Relieve transmission congestion
  • Provide grid services

Distribution

  • Defer distribution upgrades
  • Provide backup power
  • Support microgrids
  • Reduce excess demand charges (e.g., time-of-use charges)

Drivers

  • Increasing use of intermittent renewables
  • Prices continue to drop as battery manufacturing scales for EVs and consumer electronics
  • Quick ramp up times for batteries relative to other peaker plants
  • Transmission costs for energy can vary by location and over time, and energy storage can alleviate the price differential

Barriers

  • Negative environmental and human impacts of mining for needed minerals
  • Current battery technologies are unable to meet long-duration storage needs
  • High upfront capital costs for introducing battery storage

Updated October 2023

Before You Watch Our Lecture on
Energy Storage

We assign videos and readings to our Stanford students as pre-work for each lecture to help contextualize the lecture content. We strongly encourage you to review the Essential readings and videos before watching our lecture on Energy Storage. Include selections from the Optional and Useful list based on your interests and available time.

Essential

Optional and Useful

Our Lecture on
Energy Storage

This is our Stanford University Understand Energy course lecture on energy storage. We strongly encourage you to watch the full lecture to understand why energy storage plays a critical role in the clean energy transition and to be able to put this complex topic into context. For a complete learning experience, we also encourage you to watch / read the Essential videos and readings we assign to our students before watching the lecture.

Kirsten Stasio

Presented by: Kirsten Stasio, Adjunct Lecturer, Civil and Environmental Engineering, Stanford University; CEO, Nevada Clean Energy Fund (NCEF)
Recorded on: May 10, 2023   Duration: 60 minutes

Table of Contents

(Clicking on a timestamp will take you to YouTube.)
00:00 Introduction
2:55 Why Do We Need Grid Energy Storage?
12:25 What are the Different Technologies?
35:20 How Do We Use Grid Energy Storage?

Lecture slides available upon request.

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Additional Resources About
Energy Storage

Stanford University

Government and International Organizations

Fast Facts Sources
Global Energy Storage by Type: CNSEA Energy Storage Industry White Paper, 2021, BNEF Sustainable Energy In American 2023 Factbook
Battery Manufacturing by Country: Visualizing China’s Dominance in Battery Manufacturing, Visual Capitalist
Battery Growth, Grid Scale Additions: Annual grid-scale battery storage additions, 2017-2022
Battery Pricing, percent change: Trends in Batteries, IEA
Cost Range for Storage in Different Scenarios: LCOE, Lazard, 2023
Lithium-ion battery materials and supply: bp Statistical Review of World Energy, 2022
More details available on request.
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