When it comes to clean energy, most people have heard about solar and wind. But there is another entire category of clean energy infrastructure that will play just as important a role in the climate transition: energy storage.
Energy storage is a critical component in the transition to a low-carbon economy and the fight against climate change. Unlike power plants fueled by coal or natural gas, there is no dial to ramp solar and wind up or down. Large-scale energy storage technologies—including batteries, flywheels, thermal, and pumped-hydro—enable the efficient integration of renewable energy sources into the grid, thereby decreasing reliance on fossil fuels for electricity generation. Best of all, it can be a great investment opportunity, too.
What is energy storage?
In the simplest terms, energy storage is just as its name implies—a kind of technology that stores energy. Storage technologies usually store the energy as chemical energy (i.e., the energy stored in chemical bonds), potential energy (i.e., the energy that could be released by virtue of one object’s position relative to others), or kinetic energy (i.e., the energy from being in motion). Whereas generation technologies, like photovoltaic solar panels, capture energy from the sun, energy storage technologies take that energy and save it for later.
Energy storage technology comes in many forms. A salient example in the context of the climate transition is batteries. Battery technology is diverse. Not only are they derived from many materials (such as lithium-ion, lead acid, zinc-bromine, and sodium-sulfur), but they also come in all shapes and sizes. Some batteries can be as small as the battery that fits in your watch, whereas others are as big as a shipping container. Currently, lithium-ion batteries are the leading type of battery for most commercial applications, from electric vehicles to laptops. A generation ago, lead acid batteries were the most common type of battery found, normally in cars. Now, some companies are recycling older lithium ion and lead acid batteries for grid storage purposes, thereby giving them new life and avoiding the landfill.
Batteries are not the only energy storage technology that can be utilized at the grid level. Another grid storage technology is “pumped hydro,” which is short for pumped hydropower. Pumped hydro stores energy by pumping water from a lower elevation reservoir to a higher elevation reservoir, usually at night when electricity prices are cheaper. Then, when electricity is more expensive during the day, the water from the elevated reservoir is released to the lower reservoir through controlled channels. As the water flows through those channels, the water spins turbines that generate electricity and send it back to the grid. While some energy is always lost in the process, pumped hydro remains fairly efficient, often reaching 70% to 80% efficiency.
Fly-wheels constitute another form of energy storage, which operate on similar principles. Fly-wheels are basically massive spinning wheels that operate in a low friction environment. The angular momentum of a big, heavy, spinning wheel allows it to store incredible amounts of kinetic energy. When an electrical generator is applied to the axle, the wheel slows, and the generator transforms the wheels’ kinetic energy back into electrical current.
Yet another storage technology worthy of mention is thermal energy storage (TES). Using phase-changing materials, TES systems can absorb or release heat when needed. One illustration is ice batteries, whereby a business with large cooling needs (such as a grocery store with a frozen aisle) pumps cold air from large tanks filled with ice into its refrigerators. Doing so offsets the electrical load during the day, when electricity is expensive. Later on, at night, the storage tanks refreeze the now-melted ice when electricity is cheap, essentially shifting more of the business’s electrical load to cheaper times of day while keeping its products cold. As heating and cooling needs account for 10% of U.S. energy consumption, TES may offer the ability to significantly reduce the environmental footprint related to buildings and climate control.
Another application of TES can be found in concentrated solar power (CSP) systems. In a CSP system, sunlight is concentrated onto a solar collector, which heats a substrate fluid or molten sand. That heated substrate is stored until needed and then used to create steam and generate electricity, even after the sun sets.
Not all energy storage is born equal
Energy storage technologies vary in terms of their expense, their size, their limitations, and their environmental costs. Conventional lithium mining, like many other forms of extractive mining, has contributed to local water pollution, among other issues. Pumped hydro is often impractical where natural reservoirs do not already exist. And fly-wheels are limited to smaller storage projects because of their quick discharge.
Technically, all fossil fuels count as a form of energy storage, too, because they are derived from the remains of ancient plant life, which photosynthesized energy from the sun eons ago. After the plants decayed, whatever energy was left over became preserved as crude oil, methane, coal, and other hydrocarbons. Burning those hydrocarbons releases that stored chemical energy, along with carbon dioxide and other hazardous air pollutants, like sulfur dioxide, nitrous oxide, PM2.5, and soot. Therefore, it is important to discern amongst storage technologies and understand their full carbon footprint.
Why does energy storage matter for a clean energy future?
Solar and wind energy are naturally intermittent. The amount of available sun or wind in any given spot depends on the weather and the time of day. After all, you won’t capture much solar energy at night, and you won’t capture much wind energy on a still day. Even hydropower can be intermittent, albeit on longer time scales: if a certain region experiences drought for many months or years, then the amount of available water flowing through a dam may be significantly reduced. During the summer of 2022, for instance, drought struck the western half of the United States, cutting the power generation of the Hoover Dam–located on the Colorado River–nearly in half.
Storage solves the problem of intermittency by capturing excess energy and then discharging that clean electricity back onto the grid when renewable energy sources are less plentiful. In other words, large-scale energy storage can smooth out the natural fluctuations in renewable energy generation.
Without storage, the grid must rely on other energy sources—usually fossil fuel power plants—to balance out supply and demand. The consequences of allowing supply and demand to go out of whack are not trivial. Power outages or black outs can occur. Increasing the amount of available energy storage thereby enables us to deploy more clean energy generation safely and effectively, while reducing our reliance on fossil fuels.
Storage provides other benefits, as well. Small scale energy storage systems can provide backup power in the event of a grid failure or natural disaster, keeping the lights on in homes while powering other critical infrastructure like hospitals and cell phone towers. Larger scale energy storage systems can also be used to manage grid frequency and voltage fluctuations in real time.
Energy storage as an investment
Investing in large-scale energy storage can be a smart financial decision. The cost of energy storage technologies has decreased significantly—over 70% between 2015 and 2018—making them increasingly cost-competitive with traditional power sources, especially when paired with solar or wind “behind the meter.” Furthermore, as more states and countries continue to set ambitious renewable energy targets and implement policies to support the integration of renewables into the grid, the demand for energy storage is expected to grow. Those tailwinds create a strong investment opportunity for companies and individuals looking to capitalize on the transition to a low-carbon economy.
In summary, energy storage is a necessary ingredient in the transition to a clean energy future, namely, by complementing renewable energy generation. Not only will it help mitigate climate change, but more energy storage will also improve the grid for consumers. As part of its mission-statement, Firn intends to offer its customers the opportunity to invest in energy storage-related infrastructure and deploy more of these vital technologies.