What is battery storage?

The electricity grid is a complex system in which power supply and demand must be equal at any given moment. Constant adjustments to the supply are needed for predictable changes in demand, such as the daily patterns of human activity, as well as unexpected changes from equipment overloads and storms. Energy storage plays an important role in this balancing act and helps to create a more flexible and reliable grid system.1 

For example, when there is more supply than demand, such as during the night when low-cost power plants continue to operate, the excess electricity generation can be used to power storage devices. When demand is greater than supply, storage facilities can discharge their stored energy to the grid.1 

Why is it important?

According to this source, clean, renewable energy sources are needed to help create a sustainable society. They must displace our current dependence on more problematic sources of power such as oil, natural gas and uranium. The trouble with such renewable power sources is that they might not be produced at the time when most needed—during periods of peak energy demand. The creation of energy from such sources depends on environmental conditions. Wind energy is harnessed when it is windy, and solar energy creation is dependent on sunlight. 

Such challenges require a storage solution such as lithium-ion batteries. They enable renewable energy generation to be stored until required.

According to Ram Ramachander, Chief Digital Officer & Chief Commercial Officer for Social Innovation Business, at Hitachi Europe, the importance of battery storage is twofold:

“It serves a dual purpose. Firstly, it facilitates the integration of intermittent renewable energy sources, whilst simultaneously opening the door to generating income for prosumers. The dual purpose of battery storage is driving mass-market adoption of residential storage beyond 2020. By 2025, we can expect residential storage to be an integrated and essential component of all renewable energy projects.” 2

According to this source, storage technologies are important pieces of the energy transition puzzle not only because they can stockpile electricity for use later, but because they help stabilize the flow of electricity, especially as intermittent power sources such as solar and wind enter the network. Thanks to solar panels and wind turbines, people can now generate their own electricity at home, or in places far from the power grid. That makes efficient energy storage essential.

“Storage will be more and more important to smooth out some of the variability that comes when the wind isn’t blowing, when the sun goes behind the clouds,” says Charles Hanley, who manages grid modernization, energy storage, distributed energy resources and other programs for Sandia National Laboratories in Albuquerque, New Mexico.3

What is the future of battery storage?

Storage prices are dropping fast, due to the growing market for consumer electronics and demand for electric vehicles. At today’s lower prices, storage is starting to play a broader role in energy markets, moving from niche uses such as grid balancing to broader ones such as replacing conventional power generators for reliability, providing power-quality services, and supporting renewables integration. The idea of combining renewable energy such as solar with storage enables households to make and consume their own power on demand, rather than exporting power to the grid. This is becoming much more popular for customers.4 Companies such as Tesla are already jumping on this opportunity, with their recently announced Gigafactory. Eventually, we will see more microgrids gaining popularity as well. Battery and energy storage is the future of renewable energy and a sustainable, carbon-free future.


1Union of Concerned Scientists. (February 19, 2015). How Energy Storage Works. Retrieved from ucsusa.org: https://www.ucsusa.org/resources/how-energy-storage-works

2LeBlanc, Rick. (June 25, 2019). The Importance of Battery Storage for Sustainable Energy. Retrieved from thebalancesmb.com: https://www.thebalancesmb.com/importance-of-battery-storage-for-sustainable-energy-4163010

3U.S. Department of State. (2019). The promise – and importance – of energy storage. Retrieved from yali.state.gov: https://yali.state.gov/the-promise-and-importance-of-energy-storage/

4Frankel, David and Wagner, Amy. (June 2017). Battery storage: The next disruptive technology in the power sector. Retrieved from mckinsey.com: https://www.mckinsey.com/business-functions/sustainability/our-insights/battery-storage-the-next-disruptive-technology-in-the-power-sector