Why energy storage is important?

Energy storage fundamentally improves the way we generate, deliver, and consume electricity. Energy storage helps during emergencies like power outages and equipment failure. But the game-changing nature of energy storage is its ability to balance power supply and demand instantaneously, making power networks more resilient, efficient, and cleaner than ever before.

Why do we need to store energy?

Patterns of energy supply and consumption are changing rapidly due to several factors, including increasing penetration of renewable energy sources and distributed generation, a sustained increase in fossil fuel prices, changing market regulations and stringent environmental targets.
There is considerable pressure on stakeholders to evolve to meet these new demands. Effective energy storage can deliver a number of strategic services both on the regulated and deregulated side of the power business, addressing three major challenges:

  • Balancing demand & supply;
  • Managing transmission & distribution grids;
  • Increasing need for energy efficiency.

How big is the energy storage market?

World-wide demand for grid-scale energy storage is estimated to reach over 185.4GWh by 2017.

Energy storage is crucial to renewable energy providing a larger share of the energy mix.

A handful of countries are responsible for the growth in energy storage at present.

In Europe, Germany has established demand for behind-the-meter energy storage in the residential solar PV market to enable self-consumption. Several power producers and utilities in Germany are also building large-scale energy storage plants to provide ancillary grid services, without requiring subsidy to build these assets.

In Italy several large-scale batteries on the grid have been built to help integrate surplus wind instead of building costly new transmission cables.

In the UK energy storage systems built on the distribution network demonstrate how battery storage can achieve payback by carrying out several functions, such as deferral of grid works, and provision of the grid’s ancillary services.

The US represents one of the largest and most diverse markets for energy storage. There is a thriving market for services that energy storage can provide among commercial electricity customers seeking to reduce demand charges on their bills to cut down energy expenditure.

Residential and commercial solar customers are also interested in energy storage for backup, for when there are grid outages. In several states, including California, proactive policies and targets for energy storage have helped unlock demand for the technology for deployment by utilities.

Where is innovation needed most?

Whilst innovation in storage technologies (performance, cost, materials) is necessary in the long term, progress has been made, more recently, in proving the technical feasibility of energy storage in different renewable energy applications.

However, further work needs to focus on showing the competitiveness of energy storage, compared with more conventional approaches. Energy storage systems can overcome this cost hurdle when they are designed to carry out several functions and services over their operational lifetime.

Energy storage is subject of shared interest among several existing European initiatives such as European Industrial Initiatives, Public Private Partnerships, the European Technology Platform Smart Grids and the European Energy Research Alliance. Europe needs however to further support energy storage through ad hoc policies and financial support.

How cost-effective is energy storage?

Intermittent forms of renewable energy such as wind and solar tend to be most productive at times other than when demand is highest. At its simplest level, energy storage holds onto the excess energy produced by renewables for when there is peak demand.

The alternative is to build more transmission and distribution cables and infrastructure to ensure that the grid can cope with excess electricity produced by renewables.

Depending on demand and supply in a given region storage can therefore be a less costly alternative compared to the construction of additional T&D infrastructure.

Energy storage can, in some cases, compete with back-up fossil fuelled power generation for grid stability. This may diminish the impact of load-following on power plant efficiency.

As costs of energy storage technology, such as batteries, continue to come down it will become more affordable in the coming years.


What does a business model for energy storage look like?

At present, EASE is investigating different coherent and comprehensive business models for different storage users. Besides arbitrage, one can consider the following examples:

  • Producers of (renewable) energy: energy storage can prevent revenue losses from curtailment
  • Grid operator: by providing peak shaving services, energy storage can avoid or defer grid upgrades and substitute existing grid services (ancillary services) in a more cost effective manner
  • End users of electricity: storage can enhance the value and usage of locally produced energy (e.g. rooftop PV) and/or avoid purchase of electricity during peak hours
  • Aggregators of storage services can benefit from several of the above value streams


What is the impact of energy storage on the environment?

Reducing CO2 emissions while ensuring security of energy supply is at the forefront of the EU integrated approach to fighting climate change.

In 2007, Member States set the so-called “20-20-20” targets by 2020:

  • a 20% reduction in EU greenhouse gas emissions (GHG);
  • a 20% increase of the share of RES in EU’s energy consumption;
  • a 20% increase of energy efficiency.

In 2011, the European Commission published its Energy Roadmap 2050 exploring pathways toward a low carbon economy with a CO2 emission reduction of 85-90% compared to 1990 levels.

Switching to renewable energy sources will inevitably lead to a situation in which, from time to time, generation will largely exceed demand or vice versa, with specific concerns regarding transmission and distribution networks.

The growing penetration of renewable energy, in particular non-dispatchable generation such as wind and solar PV, will increase the need for flexibility in the energy system.

Energy storage is especially well suited to respond to this challenge and ensure a continued security of energy supply at any time.

The share of intermittent wind and solar energy in our electricity supplies will expand significantly. Renewable energy supply will then exceed demand at times and the electricity network will operate at the limits of its capacity combined with intelligent energy storage. Renewable power, enabled by energy storage, will be able to cover more and more base-load demand.

Energy storage can enable the energy system to operate more efficiently, by reducing system losses, and it can substitute grid services that are at present provided by fossil fuel generators.

Concerns related to the recycling of energy storage components (end of life recycling) will be taken into consideration along the work developed by EASE.


How does energy storage work?

Energy storage devices are “charged” when they absorb energy, either directly from renewable generation devices or indirectly from the electricity grid. They “discharge” when they deliver the stored energy back into the grid.

Charge and discharge normally require power conversion devices, to transform electrical energy (AC or DC) into a different form of electrical, thermal, mechanical or chemical form of energy.

Energy storage can be used among to store surplus energy from intermittent renewable sources, such as solar PV and wind power, until it is required.

There exist many different forms of energy storage: chemical (batteries, natural gas, hydrogen, electrolysis), mechanical (pumped storage plants, compressed air energy storage, pumped heat electrical storage, compressed storage of liquid air) and thermal (molten salt, bulk goods).

Dependent on the needs of the specific application or use case, various solutions are possible depending on whether a larger number of small, local storage facilities or a smaller number of large, central facilities are to be used.

The two main parameters to differentiate energy storage solutions are:

  • Power: can reach from a few kW (e.g. in end user applications like residential PV) to MW (large scale generation plants) up to hundreds of MW or even GW for centralised bulk energy storage devices.
  • Time: storage may perform charge or discharge functions over a few seconds or minutes (e.g. for grid services like frequency stabilisation), minutes to a few hours (smoothing or time shift of renewable generation), up to days and weeks (balancing long term fluctuations in generation and consumption). Multiplying power by time delivers the capacity or energy content of the storage.

Chemical energy storage includes:

  • Hydrogen
  • Synthetic Natural Gas


Electrical energy storage includes:

  • Super capacitors
  • SMES


Electrochemical energy storage may be subdividing in two sub-families:

1. Classic batteries

  • Lead acid
  • Li-on
  • Li-Polymer
  • Li-S
  • Metal Air
  • Na-Ion
  • Na-NiCl
  • Na-S
  • Ni-Cd
  • Ni-MH

2. Flow batteries

  • Vanadium Red-Ox
  • Zn-Br


Mechanical energy storage includes:

  • Fly wheels
  • Adiabatic Compressed Air
  • Diabatic Compressed Air
  • Pumped Hydro
  • Pumped Heat Electrical Storage
  • Compressed Storage of Liquid Air


Thermal energy storage includes:

  • Heat (hot water/PCM)
  • Molten salt (Heat/CSP thermal)
  • Packed-bed heat storage


Is energy storage clean?

Energy storage has no direct emissions. It recycles electricity. Energy storage systems typically require a minimal footprint, compared with building conventional power plants. Eventually, energy storage will also help cut emissions as it takes more of the load off traditional generation.

The grid will become a “weak” point in the future. How can energy storage support the grid?

Energy storage allows for technical optimisation of generation, transportation and consumption by allowing for a time-shift between these three thus contributing to energy security. Storage is a means of postponing grid investments to a time, when this is more sensitive from the market point of view. Grid investments are necessary to integrate markets.

By enabling a mismatch between generation and consumption, storage also allows for the decrease in design specifications of the transportation system: not to match possible maximum loads, either from generation or consumption, but rather an optimised solution can be realised.

What is the most pressing regulatory matter relating to energy storage that needs to be resolved?

The challenges are numerous. The different functions enabled by energy storage must be framed by policy. Defining energy storage as a separate asset (neither generation nor consumption) and enabling operators to own and operate energy storage systems within their asset portfolio are important issues that must be addressed.

Also, frameworks need to be adapted to enable trading of storage services amongst the different stakeholders participating in the electricity market and to allow players to aggregate various energy storage and other resources to provide grid services.





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