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Global energy demand has risen sharply over the past decade. Economic growth, population growth and the industrialisation of developing countries are among the reasons for this. This energy demand should be covered as stably and sustainably as possible and with renewable energies (Proton OnSite, 2016). Variable electricity generation is a common phenomenon when dealing with renewable resources e.g. wind and sun. Thus, there can be a mismatch between the energy generated and the consumption patterns, leading to the fact that the energy is not necessarily produced at the time it is needed. Furthermore, due to the decentralised and widespread energy generation by renewable sources, the energy is not necessarily produced in places with demand. Storage capacities decouple energy production and consumption and thus can support to balance the system by storing energy that is currently available but not needed, for later use (Distributed Control Methods and Cyber Security Issues in Microgrids, 2020).


Problems to be solved

Indirect by increased renewable energy integration:

Fossil-fuel energy production

Carbon emissions

Detrimental air quality

Fossil-fuel dependency




Directly through storage solutions:

Voltage and frequency regulation

Grid instability

Geographical imbalances

Peak shaving

Efficiency of renewables

Utilisation rate of renewable production


The main goal of Energy Storage Systems is to ease the usage of renewable energies. It saves energy and thereby balances out differences in generation and consumption time. Whereas some benefits are likely to be fulfilled with a basic implementation of the solution, the fulfillment of the potential benefits depends on the functions implemented in a specific project.

Main Benefits
  • Improving energy usage efficiency

  • Increased PV self-consumption

  • Demand Charge Reduction

  • Efficient integration of renewables

  • Backup power

  • Resource Adequacy

  • Reducing use of fossils

  • Increasing share of renewables

  • Increasing energy autarchy

Potential Benefits
  • Reducing energy bills

  • Enhances grid stability

  • Reducing local air pollution

  • Enabling new business opportunities

  • Improving life quality


Functions help you to understand what the products can do for you and which ones will help you achieve your goals.
Each solution has at least one mandatory function, which is needed to achieve the basic purpose of the solution, and several additional functions, which are features that can be added to provide additional benefits.

Mandatory Functions
    Storing energy

    Thermal or electric storage for posterior utilisation

    Decoupling demand from production

    Sufficient storage capacity for peak shifting

    Management of energy

    Ability to manage energy according to demand and production

Potential Functions
    Visualizing energy consumption

    Display of energy demand of the system powered

    Stabilization of microgrid

    Against increased voltage and frequency fluctuations, and changing of power flow patterns

    Control of energy market participation

    Acute controlling for time periods of low and high market prices


There are different possibilities to classify energy storage systems to create comparability. The best known are classifications according to physical, energetic, temporal, spatial and economic properties. The energetic classification distinguishes into the superordinate categories of power and energy, the temporal into short-term and long-term, the spatial into central, decentral, stationary and mobile, the economic into markets, capital costs and operating costs. Due to the popularity, the high number of categories and the technical understanding, the different storage systems are classified and explained physio-energetically. (Sterner, Stadtler, 2017)


Mechanical storage systems use the energy that a medium has due to its position (potential), velocity (kinematics) or thermodynamic state (pressure). They are mainly secondary energy carriers.

Storage technologies:

  • Hydro pumped storage
  • Compressed air storage
  • Flywheel energy storage

(Sterner, Stadtler, 2017)


Since the use of energy from renewable sources is most economical when used in forms of electricity, electrical storage is an obvious option. The advantage of not having to convert electrical energy into other forms of energy and thus being able to avoid high conversion losses in some cases. This is offset by the disadvantage of extremely low energy densities in terms of both volume and weight - and exorbitantly high costs (Sterner, Stadtler, 2017). For this reason, their application is currently merely limited to niche applications. (Kurzweil, Dietlmeier, 2015)

Capacitors are used for decentralized short-circuit current supply and use for applications with highest demands on reaction times (e.g. voltage quality).

Storage technologies:

  • Capacitors and coils
  • Super conductor magnetic energy storage
  • Supercapacitor energy storage

Supporting City Context

Short- and long-term storage

  • Presence of low carbon energy generation assets.
  • Co-located with other generation assets (PV & Wind)

Electrochemical storage systems consist of electrodes that are chemically connected. Electrical energy is transferred through chemical reactions during loading and unloading. There are electrochemical systems that can only be discharged. These are called primary batteries. Systems that can be charged and discharged repeatedly are called secondary batteries (accumulators). Chemical storage, on the other hand, involves material energy sources such as hydrocarbons or energy-carrying substances. The energy can be stored in gaseous media (hydrogen, biogas), liquid media (fuels such as ethylene, methanol) or in solid media (biomass, coal). The charging processes occur in nature (photosynthesis) or are technically converted (power to gas, power to liquid). Discharge is realized through combustion processes or conversion of thermal into mechanical or electrical energy.

Chemical storage functions as long-term storage for the power sector, but also as a fuel supplier for mobility and heat.

Storage technologies:

Battery storage systems:

  • Low-temperature-batteries (lead-acid battery, nickel batteries, lithium batteries)
  • High-temperature-batteries (sodium-sulphur batteries)
  • Batteries with external storage (redox-flow batteries)

Chemical storage:

  • Conventional chemical storage (crude oil, liquid gas)
  • Biofuels (bioethanol)
  • Power-to-Gas (hydrogen storage, methane storage)

(Sterner, Stadtler, 2017)

Use Cases


Energy storage assets

Energy storage system with Li-Ion batteries which provides bi-directional flexibility. It is aimed for dynamic cycling.



Reusing EV Batteries for Energy Storage

Solution for re-purposing Electric Vehicle (EV) batteries. EV taxis of the private company OU Takso in Tartu will be partially recharged based on renewable energy that is produced on-site with PV panels and stored in used EV batteries improving the yield of the batteries.



Smart Energy and Self-Sufficient Block

A plan to reduce electric consumption in tertiary buildings in Barcelona, through the installation and usage of photovoltaic solar panels. 


There are three main types of thermal energy storage systems –sensible, latent and thermochemical. While the sensible energy storage works through a temperature change, the latent energy storage works due to a phase change of the used material. In thermochemical storages a chemical reaction with high energy involved is used to store energy. Sensible thermal storage has a high level of development but low energy density and thermochemical storage vice versa. Latent storage is in the middle for both parameters.

Storage technologies:

Sensible thermal storage

  • Solid
  • Liquid

Latent thermal storage

  • Solid liquid
  • Liquid gaseous
  • Solid-solid

Thermochemical thermal storage

  • Sorption
  • Chemically reversible

The storage solution molten salt, mentioned in the grid flexibility solution, falls under the category of sensitive heat storage.


Sensible thermal storage functions as short-term to seasonal storage, ranging from low-temperature level for domestic hot water heating to high-temperature storage in electricity generation (molten salt for solar thermal power plants), mobile and stationary applications.

(Sterner & Stadler, 2017)

City Context

The composition of the electricity price can influence the economic performance of an energy storage system. Legal regulations have a huge influence and can promote or inhibit storage systems in countries, regions, and cities. Since electricity storage is mainly related to renewable energies, a proximity to a renewable energy plant ensures a holistic approach to maximise emission savings within the drawn boundaries. For example, the electricity generated by a wind turbine or photovoltaic system can be stored in a storage system.

Supporting Factors

  1. Prevalence of local renewable energy sources (wind/solar/CHP operated with renewable energies)
  2. Grid modernisation, such as the transition to smart grids, helps to integrate electricity storage systems
  3. Local regulations that support energy storage systems (see Government Initiatives)

Government Initiatives

The economic performance of many generation and storage technologies strongly depends on the regulatory framework, especially with regards to taxes and levies. Climate policy and CO2 price implications have the potential to clearly push low carbon emission technologies. Then, the allowance price is added to the variable costs of each fossil-based technologies. For example, many countries in Europe have a carbon tax. Portugal, Sweden, Spain and Poland are just a few examples (taxfoundation, 2020). There have been several EU initiatives on batteries, such as Batteries Europe, SET Plan action, BRIDGE projects on batteries or the BATSTORM project (European Commission, 2020). Most countries in the EU do not have a specific support mechanism for energy storage systems. However, some countries do. In Germany, for example, there is a subsidy program for distributing battery storage systems. It aims to ensure that solar PV systems have a greater benefit to the overall system by smoothing their export. While some energy storage solutions are commercially viable without subsidies, larger infrastructure-heavy projects, such as larger-scale pumped storage plants, currently struggle to attract investment due to the high revenue risk (cms, 2018).

Stakeholder Mapping

Stakeholder Map Energy Storage

Stakeholder Map of an energy storage system (BABLE, 2021)

Market Potential

There are many projections for the future energy storage market. Some of these differ significantly, but one statement can be found in all projections: the energy storage market will grow. A study by Deloitte identifies various drivers for this growth:

  • Decreasing costs for storage technologies
  • Improving performance
  • Grid modernisation and grid complexity will increase
  • More renewable energies will be installed (regional to global)
  • Participation of storage systems in wholesale electricity markets
  • Financial incentives that support the use of storage technologies will be put in place
  • Low or declining feed-in-tariffs (FITs) for renewables rise incentives for self-consumption of produced electricity
  • Rising desire for self-sufficiency (energy autarchy), resilience or independence among consumers
  • National regulations and policies promoting storage solutions to tackle specific challenges as e.g. import dependency, fill gaps in generation mix, move toward environmental goals and de-carbonisation targets
  • Energy storage will also likely benefit from broad policy mandates linked to urbanisation and quality-of-life goals in developing nations

(deloitte, 2018)

In 2019, the global demand for energy storage systems amounted to 194.32 GW (Region, And Segment Forecasts, 2020). According to Bloomberg NEF, the energy storage market will cumulatively grow to 943 GW or 2,857 GWh by 2040. From 2018 to 2040, $620 billion will be invested in energy storage. By 2040, energy storage is expected to grow to account for 7% of total global installed electricity capacity. Initially, much electricity storage will be installed behind the meter, but by the mid-2030s, the majority of storage is expected to be in the utility-scale sector. The development of the market in the individual countries can be seen in the following figure (BloomberggNEF, 2018).

Figure: Projected global cumulative storage deployment by country 2018-2030 (deloitte, 2018)

Cost Structure

The costs for storage capacities are crucial for an energy system based on significant shares of renewable energy. The figure below presents an overview with specific prices per kWh for various electricity storage technologies in recent years. This incorporates battery systems, power to X technologies (electrolysis in brown colour), and pumps storage plants (pumped hydro in yellow colour) as the currently most utilised solution. The dependency between price and cumulative installed capacity is shown on the horizontal axes. Thus, a correlation between the installed capacity and cost reductions can be observed.

Figure: Experience curves for the costs and cumulative installed capacities of different electrical storage technologies (Schmidt, Hawkes, Gambhir, & Staffell, 2017)

In addition to the historic reduction of specific costs of electrical storage capacities, further cost reductions are expected. Studies project that Levelised Cost of Storages (LCoS) will reduce at least by one-third to one-half by 2030 and 2050. Moreover, it is expected that lithium ion likely to become most cost efficient for nearly all stationary battery applications from 2030 (ScienceDirect, 2019). The effect of cost reductions is not solely caused by economy of scale but also by the maturity-level of the technologies. A projection about the development of LCoS is given in the following figure.

Figure: Projected future costs of electrical storage technologies (Schmidt, Hawkes, Gambhir, & Staffell, 2017)

Operating Models

Operating model of an energy storage system (BABLE, 2021)

Legal Requirements

EU level

France (norton rose fullbright, 2019)

  • Energy Transition Law: sets ambitious 2030 targets for renewable energy in France, energy storage as a necessity to achieve environmental policy objectives

Netherlands (norton rose fullbright, 2019)

  • Dutch Climate Act
  • Climate Accord

The creation of this solution has been supported by EU funding

Use Cases



Reusing EV Batteries for Energy Storage

Solution for re-purposing Electric Vehicle (EV) batteries. EV taxis of the private company OU Takso in Tartu will be partially recharged based on renewable energy that is produced on-site with PV panels and stored in used EV batteries improving the yield of the batteries.



Smart Energy and Self-Sufficient Block

A plan to reduce electric consumption in tertiary buildings in Barcelona, through the installation and usage of photovoltaic solar panels. 


Energy storage assets

Energy storage system with Li-Ion batteries which provides bi-directional flexibility. It is aimed for dynamic cycling.




Energy Communities with Agro-Photovoltaic Projects

Citizens are involved in the definition of the actual needs and the most appropriate solutions for the energy community. They also participate in the design of the energy community as an entity (legal form, structure, organisation, rules of operation and governance), and management of decisions.

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