The Democratizing Promise Of Energy Storage

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While energy storage is a small fraction of total power generation capacity, promising examples suggest that distributed energy storage could change the electricity system during the next decade as fundamentally as distributed renewable energy has in the last decade.

Right now, 95% of energy storage in the U.S. is water pumped uphill into in reservoirs, but there are at least four applications that show how energy storage can complement renewables and offer more local control of the energy system.

Where Storage and Renewables Meet

As highlighted in a new report from the Institute for Local Self-Reliance, there are four areas where electricity storage is helping expand the use of distributed renewable energy.

  • Electric vehicles (EVs) – EVs provide an economical alternative to driving on petroleum fuel, and offer a broadly distributed method of storing grid electricity for future use. While the vehicle-to-grid technology needed to make energy storage practical is not widely in use, many EV owners already look at combining their vehicle with solar on their home to double-down on shrinking their carbon footprint.
  • Community solar – one electric cooperative in Minnesota is using battery storage with its community-based solar array to meet local energy demand. In the future, this may also provide additional revenue, and increase the potential scale of local solar projects.
  • Island power grids – using energy storage, modeling remarkably high penetrations of variable renewable energy (40% and higher), island grid energy storage can maintain reliability and the match between supply and demand.
  • Microgrids – localized power systems can reduce costs, increase reliability, and scale up renewables, made possible by combining local energy production and storage.

Energy Storage Technology and Uses

Over 95% of deployed energy storage is in the form of water stored in hydropower reservoirs. But new, promising technologies are being commercialized to support distributed renewable energy and meet the reliability and quality needs of the electricity system, along with many decades-old technologies.  Energy storage is divided into many technologies within 4 different media.

Energy storage can serve a number of important roles on the electricity grid, much more than simply storing daytime solar electricity for nighttime use, for example.

Uses for energy storage include:

  • Managing Supply and Demand – energy customers can reduce their bills by shifting energy use to low demand periods or by reducing their maximum
  • energy use in a given month. Energy storage can cost- effectively supply capacity and backup power that has historically been provided by expensive quick- response fossil fuel power plants.
  • Delivering Ancillary Services – at every moment supply and demand of electricity must be in balance. Energy storage can respond more quickly than most existing technologies, helping maintain the voltage and frequency of the electricity system to avoid damage to connected electronics and motors, and avoid power outages.
  • Reinforcing Infrastructure – power lines, transformers and other grid infrastructure wears more quickly when operating at peak capacity. Energy storage can shift energy demand to ease stress on expensive equipment. It also allows energy users to manage their own energy use.
  • Supporting Renewable Energy – renewables are often variable, and variable energy can be challenging for inflexible utility power plants to accommodate. Energy storage responds quickly and effectively to variations in renewable energy output, enabling higher penetrations of wind and solar on the electric grid.

The different technologies for energy storage vary in their ability and cost-effectiveness to provide these services. The forms of potential energy provide the best bulk storage of electricity, but the other forms can be more nimble and meet needs for fast response.

How Energy Storage Can Grow

Three factors mentioned in the report suggest that energy storage is on the cusp of greater growth:

1. Falling costs will permit utilities to use storage to more efficiently integrate high percentages of renewable energy;

2. Electric vehicle use will continue to grow quickly as a cost-effective alternative to petroleum fueled vehicles; and,

3. Businesses, individuals, and other entities will seek more control over their energy system, enabled by energy storage.

Energy storage will also change the political dynamic of local renewable energy development. Utilities that have tried erecting barriers to on-site power generation may find that cost-effective energy storage enables their customers to leave the grid. Although most will not leave, the option to defect (described in a recent Rocky Mountain Institute report) will give electricity customers unprecedented leverage and control over their energy future.

Photo Credit: Pete Slater

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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (, and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at

John Farrell has 518 posts and counting. See all posts by John Farrell

28 thoughts on “The Democratizing Promise Of Energy Storage

  • This report pinpoints the problems of the German Energiewende.
    In Germany they focus on pruducing green energy, but forget the way how to use it.
    and must give production away to neighbour countries.
    While Germans still drive gas cars and heat their houses with heating oil.
    alot of money is lost for import.
    With every produced MW green energy, they should implement a
    used MW in EV cars and electric heating houses by heat pump and the closure of
    one MW of coal fired utilities.

    Than they have a real Energiewende.
    easy to do and why do not they do this????

    • The electricity exported from Germany is from baseload coal plants; renewables are still well below total demand.

      Germany is doing well on energy efficiency in houses already, and has led the way on zero-energy construction. I agree that it has lagged on evs.

      It’s a political fact of life that Germany has a consensus policy of early phaseout of nuclear. (It’s only a matter of timing; economics means that nuclear will decline in most countries, including France). This has sadly limited the impact of renewables on coal. But it’s starting.

  • Pumped storage is much, much cheaper than any of the new technologies. It’s really the only current candidate for storage at the scale of days and weeks rather than minutes (flywheels) or hours (batteries). Japan has 25GW of it – ironically, built as backup to nuclear power stations; the USA already has 21GW.

    Among future technologies, John leaves out power-to-gas, being pushed by no less than Fraunhofer as the best solution to providing Germany with 2 weeks of storage under an 85% renewable scenario. One advantage of P2G is that you already have the gas distribution pipelines and peak generators, so all you have to build is the conversion plants, handy to your wind farms.

    To complete the list, a really fun idea from Edward Heindl: giant rock pistons cut out of hilltops.

    • You put in “giant rock pistons” in jest, but… “Gravity Power’s
      New Take on Pumped-Hydro Energy Storage” – November 2010
      I don’t know how they are fairing and I would have concerns about water containment without leaks over the long term. (fair amount of pressure at that depth)
      Certainly, a great deal more pumped hydro could be developed in the US. We have huge dams in series on the Columbia and Colorado rivers that could be used for pumped hydro if pumps and pipes were installed. Southern Cal does that for water supply already.

      • I provided a link to Heindl, who certainly makes his proposal seriously. The integrity and repair of the piston rings is a big issue. Embedded links don’t show up well in this blogging platform, you have to watch the cursor change.

    • I just found a very interesting paper which identifies a large number of sites in Europe which could be used for closed loop pump-up storage.

      “In the cases where a PHS can be built based on linking two existing reservoirs (topology 1), the European theoretical potential is 54 TWh (11.4 TWh in the EU) when a maximum distance of 20 km between reservoirs is considered.”

      “When a PHS is built based on one existing reservoir and on a nearby, appropriately non-sloping site for a second existing reservoir, the theoretical potential at a maximum of 20 km reaches 123 TWh in Europe of which 60 TWh in the EU.”

      Even Germany has sites.

    • Existing worldwide pumped hydro capacity may be in the range of 127,000 MW. With the ball park average capacity of a nuclear reactor around 1,000 MW that means about 127 nuclear reactors worth of pumped storage already extant. Not bad for something taken more or less as an afterthought in the energy mix. What if we started to take it seriously?

      • GW.

        • Sorry, in a bit of a rush there. I’ve already made the correction. But I used thousands of MW as units. I,000 MW equal 1 GW.

      • Where are you finding 127 GW?

        I found a list of PUH sites > 1 GW that summed to only 63.7 GW. It’s missing some as it has the US at 14.8 GW when I commonly see 20 GW.

        • Wiki. I still trust them a little. Maybe that’s not so wise?

          “Pumped storage is the largest-capacity form of grid energy storage available, and, as of March 2012, the Electric Power Research Institute (EPRI) reports that PSH accounts for more than 99% of bulk storage capacity worldwide, representing around 127,000 MW.[1]”

          • Got it. The Wiki links back to an Economist article –

            “PSH accounts for more than 99% of bulk storage capacity worldwide: around 127,000MW, according to the Electric Power Research Institute (EPRI), the research arm of America’s power utilities.”


            My list was from another Wiki pump-up page. Since it lists only the larger sites it must be missing a lot. There’s a heck of a lot more out there than I suspected.

          • Whew . . . just an enthusiastic amateur here. Thought I might have screwed up again. Seems to check out at the EPRI site as well.

          • My takeaway is that there are a lot of PuHS sites already. And far more sites than the world would ever need if that’s the type of storage that works best.

            (I think most of us are amateurs here.)

    • Pumped hydro is also the most hated energy storage method, because it destroys natural ecosystems and sometimes may force people to relocate.

      Also the biggest problem with pumped hydro is that it is centralized energy storage. And this means that it is inherently expensive, because the transmission costs are very high, especially in central Europe.

      • Here’s a study of potential pump up hydro storage sites in Europe which, if utilized, would cause almost no one to move. All these sites have one or two reservoirs already in place and are within reasonable distance from existing transmission lines.

        All the sites are at least 500 meters from inhabited sites.

        There are well over 1,000 potential sites in Europe, including several in Germany.
        Pump-up is the cheapest form of storage we have at the moment.

        • decentralized batteries and electric vehicles (off-peak charging) will be even cheaper in not too distand future.

          And habitat destruction is more problematic. Especially in Germany there is not too much space and if there are no people, it almost certainly means that the area has high natural values.

          • You are guessing that decentralized storage will be cheaper. I’ve seen no one in the storage industry suggest they will be price competitive with PuHS.

            And you might try reading the report. There is quite a bit of PuHS storage ability in Europe where the reservoirs already exist.

          • but it is probably better to dismantle existing hydro storage and restore natural values.

            In Germany decentralized batteries for solar panels are already cheaper than centralized pumped hydropower (grid electricity) — at least for households due to electricity taxes.

            And price difference to commercial electricity is not that big and it is closing fast. Solar panels already achieved commercial grid parity in 2013 in Germany.

            Like I said, smart charging for 85 kWh Tesla is already technically feasible, although smart grids are still lacking behind schedule. And off-peak charging of Model S is by far the cheapest grid storage. It is at least one order of magnitude cheaper than pumped hydro.

          • Come on.

            “it is probably better to dismantle existing hydro storage and restore natural values.”

            And increase the global warming problem.

            Overall the amount of land that would be used for PuHS is very minimal. We could gain a lot more ‘natural value’ by no longer ripping the tops off mountains and creating immense open pit mines. Not to mention coal ash dumps.

            Then there’s fracking.

            “In Germany decentralized batteries for solar panels are already cheaper than centralized pumped hydropower (grid electricity) — at least for households due to electricity taxes.”

            That is not how one prices the cost of storage. You’re confounding the math by bringing in retail bases.

            “And price difference to commercial electricity is not that big and it is closing fast. Solar panels already achieved commercial grid parity in 2013 in Germany.”

            That has nothing to do with the cost of storage.

            ” And off-peak charging of Model S is by far the cheapest grid storage.”
            That also has nothing to do with grid storage. The power put into EV batteries does not flow back to the grid.

          • Power does not need to flow back to the grid from electric vehicle. Off-peak electricity consumption is equivalent to grid storage. If we have enough long range electric vehicles, synthetic fuel production, electric water heating and vertical farms that can absorb large loads off-peak power, we do not need grid storage into anything.

            This is why smart grid is such an important idea. It will revolutionize power grid economics, because during the peak solar hours, we can essentially let the price of grid electricity to fall near zero.

            The regrowth of forests absorbs annually about 2 tons of carbon per hectare about the next 200 years. It might be that if the pumped hydro plant is dismantled, the regrowth of forests will absorb more carbondioxide from atmosphere than that particular pumped hydro plant can save during its operational lifetime.

          • We are talking about storage. Not dispatchable load.

            “The regrowth of forests absorbs annually about 2 tons of carbon per hectare about the next 200 years. It might be that if the pumped hydro plant is dismantled, the regrowth of forests will absorb more carbondioxide from atmosphere”

            That is simply a bizarre claim. Do you ever do math?

          • The point is that from the point of view grid economics storage and dispatchable electricity consumption are equivalent.

            Today there is not enough flexibility on electricity demand, so therefore we need grid storage. And we need even more due to integrated renewable generation.

            But electric vehicles and some other promising near future technologies may change the game. I mentioned as an example vertical farms (that will be the ultimate clean tech of the future — but unfortunately it is hard to predict when) and synthetic methane (kerosene) production. All these three technologies can fully adjust their electricity consumption according the availability of renewable electricity. Therefore they act as equivalent to grid storage.

          • No, Jouni.

            When the Sun is down and the wind lazy we need a way to fill in the grid supply other than burning fossil fuels. Getting into our EVs and driving around will not do that.

          • It takes decades before we get rid of baseload power completely. When wind does not shine we go with baseload power and the price of electricity is priced according with that.

            I predict that we go for 100 % solar in 2030’s, but I admit that I am wildly optimistic on technological progress, because this assumes that the cost of batteries will go down more than one order of magnitude from current prices.

            But anyway, any plans that go further than 20 years ahead into future are irrelevant, because they are beyond prediction horizon. We really cannot anticipate what new technologies are possible in late 2030’s and beyond.

          • It would be helpful if you would use something like “always on” generation rather than “baseload”. There will always be a daily/annual minimum demand. A baseload.

            My guess is that the US will be free or essentially free of coal “always on” generation in 20 years. Nuclear will hang on longer simply because we appear to be bringing five new reactors on line and they will be only partway through their design lifetime.

            I can’t see any place going 100% solar except for some very small exceptions. Wind is cheaper than stored solar. Adding wind means that storage cycles more time per year and less is needed. A 100% solar grid would require that solar + storage would cost less than wind. And it would require extensive days of storage without wind filling for periods of cloudy days.

          • Actually nuclear plants are quite expensive to operate and maintain. And there is that waste accumulation problem that is not yet solved anywhere, so we really do not know the true cost of waste problem. (my guess is that nuclear waste must be destroyed in special nuclear reactors and that is very expensive at current level of technology.)

            We remember that Vermont nuclear reactor will be shut down 18 years earlier than scheduled, because electricity prices are too low to keep the running and updating that old nuke profitable. And solar is a real short term thread for centralized energy producers as they cut the midday peak demand.

            Also according to Lenz Blog (not very reliable source, IMO), the operation and maintenance costs of nukes in Germany are about €40 per MWh. this is above average market price of electricity. Therefor shutting down German nukes by 2022 may be economic necessity!

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