How Energy Storage Works | Union of Concerned Scientists

What Are the Benefits of Energy Storage?

What are the benefits of energy storage?

Benefits for a Flexible Clean Energy Grid

One reason that the deployment of energy storage is accelerating is that it increases flexibility in grid operations, offers multiple services, and can be used in different applications. Storage systems can also be located in multiple segments of the electricity grid—in the transmission network, the distribution network (where electricity is delivered to consumers), the generator (for example, co-located with wind or solar), and in the case of smaller scale systems, at the commercial building or residential level.

Because some renewable energy technologies–such as wind and solar–have variable outputs, storage technologies have great potential for smoothing out the electricity supply from these sources and ensuring that the supply of generation matches the demand. If charged during periods of excess renewable generation and discharged at times of increased demand, energy storage can help maximize the use of renewable energy and ensure that less is wasted. And residential battery storage can help the utility to balance electricity customer demand with power supply to better align the more variable wind and solar supply with electricity demand.

More broadly, storage can provide electricity in response to changes or drops in electricity, provide electricity frequency and voltage regulation, and defer or avoid the need for costly investments in transmission and distribution to reduce congestion. Energy storage is also valued for its rapid response–battery storage can begin discharging power to the grid very quickly, within a fraction of a second, while conventional thermal power plants take hours to restart. This rapid response is important for ensuring the stability of the grid when unexpected increases in demand occur.

Energy storage also becomes more important the farther you are from the electrical grid. Homes in rural communities that are farther away from the transmission grid are more vulnerable to disruption than homes in large metropolitan areas. Islands and microgrids have smaller service areas that are (or can be) disconnected from the larger electrical grid. Because they may not be able to rely on the larger grid, these communities can use energy storage to avoid blackouts.

Benefits to Communities

Deployment of energy storage can increase access to and deliver benefits for low-income communities and communities historically overburdened with the impacts of pollution and climate change.

A key benefit of energy storage is its ability to provide the grid services currently fulfilled by fossil fuel peaker plants—or “peakers”— that only operate during limited times throughout the year at periods of extremely high demand for electricity, such as during a heat wave. Peaker plants are usually sited in areas of high electricity demand like urban centers—often in or near low-income communities or communities of color. Most peakers are powered by natural gas (although a few even run on coal, oil, and diesel fuel), increasing air pollution and exacerbating already poor public health impacts in these overburdened communities. Energy storage can replace existing dirty peaker plants, and it can eliminate the need to develop others in the future. Battery storage is already cheaper than gas turbines that provide this service, meaning the replacement of existing peakers will accelerate in the coming years.

Related to this, storage can help customers avoid peak pricing (price spikes) by smoothing out demand. Similar to how car rideshare services spike in prices on holidays or other times of high demand, in some places electricity gets more expensive when demand is high, such as during heat waves as more people rely on air conditioning. Energy storage can reduce high demand, and those cost savings could be passed on to customers.

Community resiliency is essential in both rural and urban settings. Energy storage can help meet peak energy demands in densely populated cities, reducing strain on the grid and minimizing spikes in electricity costs. Energy storage can help prevent outages during extreme heat or cold, helping keep people safe. Storage can be used alone or in addition to community solar or aggregated home or commercial building rooftop solar projects to create community-level microgrids or resiliency hubs. By providing localized backup power, these systems can help communities during natural disasters—for example, in meeting energy demands during floods, wildfires, and extreme weather events, all of which are becoming more frequent and intense with climate change.

By charging storage facilities with energy generated from renewable sources, we can reduce our greenhouse gas emissions, decrease our dependence on dirty fossil fuel plants contributing to pollution and negative health outcomes in communities, and even increase community resilience with solar plus storage systems.

Battery storage, or battery energy storage systems (BESS), are devices that enable energy from renewables, like solar and wind, to be stored and then released when the power is needed most.

Lithium-ion batteries, which are used in mobile phones and electric cars, are currently the dominant storage technology for large scale plants to help electricity grids ensure a reliable supply of renewable energy. We’ve begun deploying this technology with heavier equipment, working with Viridi Parente – a company that makes battery storage systems for industrial, commercial and residential buildings.
 

Why is battery storage important and what are its benefits?

Battery storage technology has a key part to play in ensuring homes and businesses can be powered by green energy, even when the sun isn’t shining or the wind has stopped blowing.

For example, the UK has the largest installed capacity of offshore wind in the world, but the ability to capture this energy and purposefully deploy it can increase the value of this clean energy; by increasing production and potentially reducing costs.

Every day engineers at National Grid and electricity grids worldwide must match supply with demand. Managing these peaks and troughs becomes more challenging when the target is to achieve net zero carbon production. Fossil-fuel fired plants have traditionally been used to manage these peaks and troughs, but battery energy storage facilities can replace a portion of these so-called peaking power generators over time.

The UK government estimates technologies like battery storage systems – supporting the integration of more low-carbon power, heat and transport technologies – could save the UK energy system up to £40 billion ($48 billion) by 2050, ultimately reducing people’s energy bills.

Prescott Hartshorne, a Director at National Grid Ventures in the US, says: “Storage enables further renewable generation, both from an operational and reliability perspective. It’s also a key piece of our utility customers’ ongoing evolution and transition to renewables.”

 

How exactly does a battery storage system work?

Battery energy storage systems are considerably more advanced than the batteries you keep in your kitchen drawer or insert in your children’s toys. A battery storage system can be charged by electricity generated from renewable energy, like wind and solar power.

Intelligent battery software uses algorithms to coordinate energy production and computerised control systems are used to decide when to store energy or to release it to the grid. Energy is released from the battery storage system during times of peak demand, keeping costs down and electricity flowing.

This article is concerned with large-scale battery storage systems, but domestic energy storage systems work on the same principles.
 

What renewable energy storage systems are being developed?

Storage of renewable energy requires low-cost technologies that have long lives – charging and discharging thousands of times – are safe and can store enough energy cost effectively to match demand.

Lithium-ion batteries were developed by a British scientist in the 1970s and were first used commercially by Sony in 1991, for the company’s handheld video recorder. While they’re currently the most economically viable energy storage solution, there are a number of other technologies for battery storage currently being developed. These include:

• Compressed air energy storage: With these systems, generally located in large chambers, surplus power is used to compress air and then store it. When energy is needed, the compressed air is released and passes through an air turbine to generate electricity.

• Mechanical gravity energy storage: One example of this type of system is when energy is used to lift concrete blocks up a tower. When the energy is needed, the concrete blocks are lowered back down, generating electricity using the pull of gravity.

• Flow batteries: In these batteries, which are essentially rechargeable fuel cells, chemical energy is provided by two chemical components dissolved in liquids contained within the system and separated by a membrane.

Prescott Hartshorne says: “The next decade will be big for energy storage in general and for batteries in particular. It will be an important proving time for batteries and for other technologies.”
 

Last updated: 9 May 2023
The information in this article is intended as a factual explainer and does not necessarily reflect National Grid's strategic direction or current business activities.