MARKETS BRACING FOR A STORAGE STORM

More renewable energy in the mix means, on the whole, a greater need for power storage capacity. Currently, all of the green electrons cannot always be absorbed by grids or used by consumers as they are produced.

Some of this clean power can be used to produce next-generation fuels like green hydrogen or e-fuels but it will still be storage capacity that will play the most important and sizeable role in future energy systems.

Pumped hydro—which uses excess electricity to re ll a reservoir behind a dam before releasing the water through a turbine when power is needed—has been the go-to large-scale storage option for many countries. But the obvious limits of hydropower, such as costs, environmental concerns and geographical constraints, mean that other forms of grid storage are rapidly coming into contention to be crucial energy transition linchpins.

Battery storage in particular is set to enjoy a boom as installation costs come down, policies converge around maximising clean energy output and regulators slowly but surely get their act together.

Grid Support

According to the International Energy Agency’s 2023 report on electricity markets, battery installations rose nearly 100% in China last year, compared with 2021. The United States saw an 80% increase, while in Europe it was around 35%.

The technology’s ability to store clean energy is its most obvious value but additional factors like grid balancing services are also needed, particularly as power systems move further away from being designed around peak loads.

Jarand Rystad, the founder of energy research rm Rystad Energy, told FORESIGHT’s Policy Dispatch podcast that “batteries will revolutionise the grid” and that storage goes hand-in-hand with solar power production in particular.

“The business case going forward will be inte-

Ba ery bank

Ba ery storage sites, like this one in the UK, need be er market dynamics to become investable

Technology

The major economies of China and the US have identified storage capacity as an industrial priority and are redesigning their markets to incentivise growth. The rest of the world’s economies are trying to compete but will instead need to ride the pair’s coa ails to benefit