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| Fig. 1: Classification of energy storage systems.(Image Source: C. Cranmer, following Worku. [1]) |
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| Fig. 2: Technological maturity of energy storage systems,(Image Source: C. Cranmer, following Worku [1]) |
As the global energy system transitions to renewable energy sources like wind and solar, the inherent variability and intermittency of these sources pose significant challenges to grid stability and reliability. Energy storage systems (ESS) can mitigate these fluctuations by decoupling generation from demand, thus maintaining a stable energy supply. ESS also enables ancillary services like voltage regulation, frequency stabilization, and load leveling, enhancing overall grid performance. [1]
Moreover, the integration of energy storage can prevent renewable energy curtailment, optimize the utilization of power plants, and reduce reliance on fossil-fuel-based peak power plants. This results in economic and environmental benefits, such as reduced greenhouse gas emissions and air pollution. [2]
Storage technologies can be classified into 5 types, as shown in Fig. 1: Electrical, Mechanical, Chemical, Electro-chemical, and Thermal. This report will look in detail at the Mechanical and Electro-chemical options highlighted in blue (note: this is not an exhaustive list).
We can also classify the storage technologies examined in this paper based on their relative technological maturity (Fig. 2). Note that a technology is not considered mature and commercial until it has had several large deployments, stabilized costs and materially reduced technology risk.
Finally, we need to consider what we mean by energy storage. There are several types of storage that support electricity system operation (shown in Table 1) - in the context of a growing share of intermittent renewable energy on the grid, the most relevant are Peaker replacement and Seasonal storage.
Grid-scale energy storage faces several technical and economic challenges: [3]
Cost and Economic Viability: High initial capital costs and ongoing maintenance can be prohibitive. Some technologies also rely on materials like lithium and cobalt, which have fluctuating prices and limited availability.
Lifespan and Degradation: Battery systems often suffer from capacity fade over time due to repeated charge-discharge cycles, which can limit their operational lifespan.
Safety Concerns: Issues like thermal runaway and fire hazards, especially in lithium-ion batteries, raise safety concerns.
Environmental Impact: Mining and disposal of battery materials pose environmental and ethical challenges.
Scalability and Siting: The physical size and energy density of some battery technologies, such as flow batteries, can limit deployment in densely populated areas. [4]
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| Table 1: Applications for select energy storage technologies. [3] |
Pumped Hydro Storage is the most mature and widely deployed energy storage technology globally, accounting for the largest share of grid-scale energy storage capacity. It operates by pumping water from a lower reservoir to a higher reservoir during periods of low electricity demand and releasing it through turbines to generate electricity during high demand.
PHS is advantageous due to its long lifespan, high round-trip efficiency (up to 80%), and ability to provide large-scale, long-duration energy storage. Its capacity to stabilize the grid and support frequency regulation further enhances its value. However, the technology is highly site-specific, requiring suitable geographical conditions with significant elevation differences and available water resources. Moreover, its implementation involves high capital costs, long development timelines, and potential environmental concerns, such as impacts on local ecosystems and water availability.
CAES systems store energy by compressing air in an underground cavern or above-ground tanks during periods of low demand and releasing it through turbines to generate electricity during peak demand. It is typically used for large-scale, long-duration energy storage.
CAES systems are scalable and have relatively low operational costs once installed. However, the round-trip efficiency of CAES systems is lower than that of other technologies, ranging from 40% to 55%. Additionally, like PHS, CAES depends on specific geographical conditions, such as the availability of suitable underground storage spaces, and its deployment can be constrained by high upfront costs.
LAES is an emerging technology that uses surplus electricity to cool air to its liquid state at cryogenic temperatures, storing it in insulated tanks. During high demand, the liquid air is heated and expanded through turbines to generate electricity.
LAES has the advantage of being scalable and not geographically constrained, making it deployable in a wide range of locations. It is also capable of providing long-duration energy storage, making it suitable for balancing intermittent renewable energy sources. Further, LAES systems can utilize waste heat from industrial processes to improve efficiency. However, the technology has relatively low round-trip efficiency, typically around 50-60%, and is still in the early stages of commercialization, requiring further research and cost reductions to achieve widespread adoption.
Lithium-ion batteries (with various sub-types) have high energy density and efficiency, and have been deployed in grid applications like renewable energy storage (e.g., coupled to a solar plant) and as backup power systems. This technology accounted for the majority of newly installed energy storage capacity in recent years, with 16 GW installed as of 2021. [5] Li-ion batteries have experienced a significant price drop in recent years, driven by advancements in technology and economies of scale.
Despite these benefits, lithium-ion batteries face limitations, including a relatively short lifespan, high costs, and reliance on critical materials like lithium and cobalt, which are subject to supply chain vulnerabilities. A predicted scarcity and price increase for lithium further complicate the outlook, as does the currently limited recycling infrastructure. Recycling lithium is estimated to cost up to USD 20 per kWh of installed capacity, and repurposing batteries often results in even higher levelized costs of energy storage. While these factors could push costs higher in the future, lithium-ion batteries also exhibit a high learning rate, meaning that ongoing technological improvements may offset these challenges in the longer run. [6]
Lead-acid batteries are one of the oldest and most established energy storage technologies; they are typically used in cars. There are multiple types, each with slightly different use cases. They store energy using lead-based electrodes and a sulfuric acid electrolyte and are commonly used for backup power and off-grid systems. These batteries are low cost and mature, but suffer from a short lifespan, low energy density, and significant environmental concerns related to lead disposal. [7] Their lifespan is a particular issue for grid-scale storage given the reliability requirements and frequency of cycling.
Sodium-sulfur batteries consist of molten sodium and sulfur separated by a solid ceramic electrolyte. They are particularly suited for large-scale applications due to their high energy capacity and durability. Several projects are operational at TRL 8. These batteries are advantageous because they provide high energy capacity and a long lifespan while reducing dependence on critical metals. Nevertheless, they require operation at high temperatures, often exceeding 300C, which necessitates advanced thermal management systems.
Vanadium flow batteries use vanadium ions in a liquid electrolyte to store energy. Their modular design makes them ideal for large-scale and long-duration applications. This technology has a TRL of 8, and some full-scale installations are operational. These batteries are particularly beneficial for their scalable energy storage capacity and long cycle life with minimal degradation. However, their high upfront costs and low energy density make them less suitable for applications where space and initial capital are constraints.
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| Table 2: Cost comparison of grid-scale storage technologies. †Li-ion levelized cost calculated only for shorter duration T and D support in this paper. |
A word of caution on battery costs they are extremely difficult to pin down compared to electricity generation costs. The installed cost of storage differs from cost per kwh which differs from the levelized cost of storage (LCOS), but many papers and media articles use these terms without defining which precisely they are calculating. For consistency, the figures in Table 2 refer to LCOS - the theoretical price needed for a technology to break even given costs, lifetime (years and cycles) and the rate of return required by financiers.
However, even LCOS is not standardized across papers, and each calculation relies on many assumptions that can alter the resulting $/MWh dramatically. If a source is not explicit about the cost metric used and assumptions made, and/or it does not provide a relatively wide margin of error, I would urge caution. The below sources are illustrative of how material input assumptions are for LCOS ranges. [8-10]
These authors disagree on which technology is cheapest, and to what extent. PNNLs numbers are noticeably lower than those from Schmidt et al on CAES and Lead-acid batteries, raising questions on which assumptions differed so materially.
Given the challenges outlined above, there are numerous areas of ongoing research aimed at overcoming these obstacles and advancing energy storage technologies. Efforts are focused on developing advanced materials, such as silicon-based anodes and sulfur-based cathodes, to reduce dependency on rare and costly materials like lithium and cobalt. Researchers are also prioritizing improvements in battery recycling and reuse infrastructure to enhance material recovery and mitigate environmental impacts. Hybrid systems, which integrate technologies like batteries and supercapacitors, are being explored to optimize performance for specific grid applications. Additionally, long-duration storage solutions, such as metal-air and advanced flow batteries, are gaining attention for their potential to support renewable energy integration over extended periods of variability. Finally, enhancing system integration through advanced control algorithms and grid management strategies is critical to maximizing the reliability and efficiency of energy storage in a renewable-powered future.
© Caitlin Cranmer. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] M. Y. Worku, "Recent Advances in Energy Storage Systems For Renewable Source Grid Integration: A Comprehensive Review," Sustainability 14, 5985 (2022).
[2] X. Fan et al., "Battery Technologies For Grid-Level Large-Scale Clectrical Energy Storage," Trans. Tianjin Univ. 26, 92 (2020).
[3] O. Schmidt et al., "Projecting the Future Levelized Cost of Electricity Storage Technologies," Joule 3, 81 (2019).
[4] "Advanced Batteries," U.S. Government Accountability Office, GAO-23-6332, December 2022.
[5] S. Mulder and S. Klein, "Techno-Economic Comparison of Electricity Storage Options in a Fully Renewable Energy System," Energies 17, 1084 (2024).
[6] M. H. Mostafa et al., "Techno-Economic Assessment of Energy Storage Systems Using Annualized Life Cycle Cost of Storage (LCCOS) and Levelized Cost of Energy (LCOE) Metrics," J. Energy Storage 29, 101345 (2020).
[7] H. Ajibade et al., "Improvement in Battery Technologies as Panacea For Renewable Energy Crisis," Discov. Appl. Sci 6, 374 (2024).
[8] V. Viswanathan et al., "2022 Grid Energy Storage Technology Cost and Performance Assessment," Pacific Northwest National Laboratory, PNNL-33283, August 2022.
[9] V. Jülch, "Comparison of Electricity Storage Options Using Levelized Cost of Storage (LCOS) Method," Appl. Energy 183, 1594 (2016).
[10] B. Zakeri and S. Syri, "Electrical Energy Storage Systems: A Comparative Life Cycle Cost Analysis," Renew. Sustain. Energy Rev. 42, 569 (2014).