Energy Storage

energy storage


In most cases, electricity that is generated is generally fixed over a short period of time despite fluctuations in demand throughout the day. With the increase of renewable energy systems that rely on the sun shining or wind blowing to generate power to meet decarbonization goals, intermittency of electricity generation is a growing issue that must be addressed. One solution to this problem is using energy storage systems. Energy storage is the ability to store energy and dispense or use it at a later time, as well as to respond to large fluctuations and/or peaks in grid demand.
Grid-scale energy storage will play a key role in the transition towards decarbonizing the U.S. economy by enabling the widespread use and reliability of firm renewable energy. To meet the anticipated demand, energy storage technologies will need to continue to evolve. Today’s technologies yield only hours of storage, but through advancements and investments in research, innovators are developing energy storage technologies that may be capable of storage capacity that stretches for days.

Key Technologies

Energy storage technologies largely rely on batteries to store dispatchable power. After pumped-storage hydropower, lithium-ion battery storage is the most widely used battery type and makes up the majority of all new capacity installed.1 Battery storage is also the most scalable technology option. Advancements in battery technology from electric vehicles may help to advance energy storage technologies, providing cost and technology improvements. Other energy storage technologies include thermal energy storage, mechanical storage, and hydrogen.

The key technologies and components of energy storage include:


  • Pumped hydropower: Currently most widely deployed grid-scale technology, accounting for over 90% of global electricity storage.
    • Compressed air energy storage (CAES): One of the oldest methods of energy storage, storing air and gas in a pressured container or cavern underground and released to meet demand. Requires very large volume storage sites (salt caverns).
  • Flywheel: Relative to other energy storage methods, flywheel energy systems have a longer lifetime and require little to no maintenance. They provide load leveling capability for large battery systems, providing short-term reserve for changes between supply and consumption.


  • Super capacitator: Used for rapid charge and discharge cycles, rather than long-term compact storage. Common uses are in vehicles, buses, trains and elevators with regenerative braking.
  • Superconducting magnetic energy storage (SMES): Used in short duration energy storage due to high costs of refrigeration and superconducting wiring. Often used to improve power quality.


  • Power-to-gas: Electricity converted into gaseous energy carriers via water electrolysis.
    • Hydrogen: Electricity can be stored as hydrogen by conversion through electrolysis. The hydrogen can be re-electrified in a fuel cell or burned in a combined cycle gas power plant.
    • Synthetic methane: Electricity can be converted to synthetic methane via electrolysis and used as a direct replacement for natural gas or as seasonal energy storage.
  • Flow batteries (vanadium redox, zinc-bromine, polysulfide-bromine): promising technology, benefiting from less sensitivity to higher depth of discharge, long life cycles (25-30 years), and unlimited energy capacity.
  • Batteries (lead-acid, nickel-cadmium, lithium-ion, sodium-sulfur): Smaller scale currently than pumped hydropower, but work is being done to scale-up. Batteries have a high energy density and/or power density. Lithium-ion is the most common and preferred battery type deployed for energy storage.

Potential Market Size & Timing

As the share of grid power from renewable energy sources grows, the need for energy storage will also expand. Energy storage also enables better response to demand fluctuations as the ‘electrification of everything’ comes into place. The U.S. has a national goal to achieve 100% carbon-free electricity by 2035 and by 2050, more than 90% of energy demand is anticipated to come from renewable energy sources. Further, the U.S. is targeting net zero emissions economy-wide by 2050. These goals will require energy storage deployed at commercial scale across industries.

Future Market Size

  • According to a September 2022 IEA report, grid-scale battery storage needs are anticipated to have a 44-fold expansion between 2021 and 2030, with projected capacity to grow to 680 GW globally.2 By 2050, capacity needs are expected to increase to more than 930 GW of storage when over 90% of energy comes from renewables.3
  • Global investment in battery energy storage reached $10 billion in 2021 (90% of total deployment was lithium-ion batteries). By 2025, U.S. investments alone are projected to reach $8.5 billion.4
  • According to a December 2020 report by the Department of Energy (DOE) titled Energy Storage Grand Challenge: Energy Storage Market Report, “by 2030, stationary and transportation energy storage combined markets are estimated to grow 2.5-4 terawatt-hours (TWh) annually, approximately three to five times the current 800-gigawatt-hours (GWh) market.” Furthermore, report suggests that “the largest markets for stationary energy storage in 2030 are projected to be in North America (41.1 GWh), China (32.6 GWh), and Europe (31.2 GWh). Excluding China, Japan (2.3 GWh) and South Korea (1.2 GWh) comprise a large part of the rest of the Asian market.”5


  • Cost: While costs for energy storage have improved, particularly alongside the growth in electric vehicle battery research and development, costs must continue to improve for widespread deployment. Particularly, battery mineral prices for minerals such as nickel, cobalt, and graphite are currently high due to both demand and global events like the Russian invasion of Ukraine.
  • Manufacturing batteries: Supply chain issues and mining limitations have led to long lead times and cost increases for battery storage technologies. Manufacturers are also grappling with end-of-life battery policy (i.e., who is responsible for a dead battery and how is it recycled or disposed of properly?).
  • Outdated regulatory policy and market design: Current electric grid interconnection rules create storage project backlogs.
  • Energy markets need to adapt to a zero-carbon future: While much progress has been made in committing to carbon free electricity, implementation of strategies to adopt the necessary technologies is lagging behind.
  • Need for further technology advancements: Continued advancement of energy storage technologies is necessary to meet the demand for deployable clean power and demand flexibility and response. Improved storage capacity and energy density are among some of the general improvements that innovators are working toward.


  • Global movement towards renewables
    • Several US states have set dedicated targets for storage, driving demand for technologies at the state level. For example, NY has committed to doubling the state’s energy storage target to 6 GW by 2030.
    • The landmark IIJA and IRA legislation included funding for battery innovation and an investment tax credit for stand-alone storage, which is likely to boost competitiveness of new grid-scale storage projects
    • China, Spain and Germany are among other countries committed to expanding energy storage capacity through complementary policy.
  • Cost and performance improvements
    • Focus on recycling and use of second-life batteries to minimize mining restrictions for lithium-ion batteries
    • Shared benefit of technology advancements and cost improvements related to manufacturing economies of scale as a result of electric vehicle sector growth and support
  • Grid modernization: As the grid modernizes, energy storage will help to unlock the capabilities of smart grids and other enabling technologies to meet demand growth, increase capacity, and meet flexibility needs.
  • Financial incentives: The U.S. and other countries have increased support for energy storage technologies and innovation in post-pandemic policies related to infrastructure and clean energy. Global efforts to advance the market for energy storage will enable the full value chain to improve costs and advance technologically.

Relevant NEMA Technologies

  • Energy storage systems such as: machine logic control and systems, man-machine interface, systems integration, communications and energy management software
  • Utility products & systems
  • Capacitor
  • Electrical submeter
  • Connected building systems
  • Power electronics


  3. Jorgenson, Jennie, A. Will Frazier, Paul Denholm, and Nate Blair. 2022. Grid Operational Impacts of Widespread Storage Deployment. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A40-80688. fy22osti/80688.pdf.