One of the challenges of renewable energy is in ensuring consistent and reliable power generation, for example, solar panels cannot generate power during the night. Energy storage can overcome the difficulty by storing excess power for use when renewable energy is not available. Storage is growing rapidly, and innovations can make deployment easier, faster and cheaper.
Renewable energy installation has set records in recent years, driven by declining costs and increasing demand for electricity as well as the closure of coal plants. The intermittency of solar and wind has, though, created challenges to using them for reliable power 24/7. Energy storage in batteries and other solutions can mitigate the challenges, and storage providers are growing at record rates.
US energy storage deployments rose 34 percent from to , Utility Dive reported, and the three energy storage segments Wood Mackenzie tracks saw double-digit growth. The utility-scale segment grew 32 percent, the residential segment rose 64 percent and the community, commercial and industrial segment rose 11 percent.
The US Energy Information Administration said capacity growth from battery storage could set a record in , with 18.2 GW of utility-scale battery storage potentially being added. This growth highlights the importance of battery storage for renewable energy, as it helps to meet demand and improve grid stability.
“Energy storage is solidifying its place as a leading solution for strengthening American energy security and grid reliability in a time of historic rising demand for electricity,” ACP VP of Energy Storage Noah Roberts told Solar Power World. “The energy storage industry has quickly scaled to deliver reliability and cost-savings for American communities.”
A key reason for the growth, S&P explained, is that battery energy storage is increasingly vital for improving project economics and countering the effects of low wholesale electricity prices in regions with high renewable penetration. Excess energy production at midday drives prices down to cents per megawatt or even negative values. Incorporating battery storage solutions enables solar projects to remain viable, enabling developers to enhance the feasibility of renewable energy investments. A surge in storage capacity in will be driven by the increasing necessity for reliable energy storage solutions, particularly as a growing share of electricity is generated from renewable sources.
Rising energy demand from AI and data centers coupled with supply chain issues for large gas turbines serves as an upside for utility-scale storage, SEIA observed, as renewable energy helps meet this expected growth when paired with storage.
While lithium-ion batteries have long been common storage solutions, Bird & Bird expects alternatives to gain traction, driven by the need for lower costs and improved performance. Technologies such as sodium-ion, lithium-sulfur, solid-state and flow batteries are emerging as viable competitors, offering advantages in safety, longevity, and cost. Sodium-ion batteries, for example, are expected to see commercial adoption due to their lower production costs and better safety. Flow batteries, which use liquid electrolytes, are also becoming popular for large-scale, long-duration energy storage. These innovations provide options for energy storage and reduce dependency on any single technology or material.
Other innovations that are underway, Conexsol said, include sodium-sulfur, zinc-air, and nickel-zinc and magnesium-ion batteries. S&P similarly noted that even though lithium-ion battery technology is beginning to be utilized for eight-hour storage systems, there is a notable shift toward exploring non-lithium technologies, such as large-scale commercial deployments of compressed air energy. Another solution is advanced thermal energy storage (TES), which enables heat retention for later use. It uses molten salts, phase-change materials (PCM), and eutectic substances. The systems are efficient and use abundant materials.
Redox flow batteries, with electroactive materials stored in separate tanks as liquids and pumped through the battery to generate electricity, are another alternative to lithium-ion for long-duration energy storage. Used for utility-scale storage, they offer a longer lifespan, flexible scalability and eco-friendly materials.
Pacific Northwest National Laboratory is also working on a process that uses vapor from lithium oxide (Li2O) sublimation to accelerate a chemical reaction that forms single crystals when mixed with nickel-rich precursors, which can enhance lithium-ion batteries.
While storage capacity in Washington is small, it is growing and could increase significantly. Although Washington had no reported battery storage capacity until , according to Environment Washington, installed capacity had grown to 0.01 gigawatts as of as of and now ranks 30th in the country.
Utilities and independent energy companies in western Washington have proposed a slew of standalone battery energy storage systems, the Washington State Standard noted. Both supporters and opponents acknowledge that utility-scale battery storage will be needed for the Northwest to meet demand as renewable electricity comes onto the grid.
One of the first large-scale urban battery farms in Washington will be in Arlington, says the Standard, and energy developers have proposed dozens more projects from to throughout the state. Planners at Puget Sound Energy, for example, have 15-to-20 interconnection requests for major battery storage projects in their queue for evaluation.
Prices of batteries are falling, the Standard reported, and the Washington legislature made installation easier by adding an alternative permitting pathway for developers who foresee regulatory obstacles at the local level. House Bill (passed in ) allows energy storage facilities to be certified through the State of Washington Energy Facility Site Evaluation Council (EFSEC). Specifically, the bill modified RCW 80.50.060 to include storage facilities (and other technologies like transmission) to opt in the EFSEC review. The Standard also noted that some Washington jurisdictions have passed temporary moratoria on processing energy storage permits to give themselves time to formulate appropriate siting and safety rules.
Washington lawmakers passed HB in that funds the Energy Program to conduct a study about pumped storage hydropower, NWPB reported, and a study about where to build pumped storage is underway. Across the US, 90 percent of energy storage comes from pumped storage hydropower. When there is too much energy on the grid, water is pumped to a high reservoir. The water is then released through turbines into a lower reservoir to generate electricity when energy is needed. Drawbacks, though, include high construction costs and the loss of natural and cultural resources.
Given the rising share of renewable energy in Washington and more broadly the US, as well as the innovations and its improving cost-effectiveness, energy storage looks to grow significantly within just a few years.
Batteries play a crucial role in today’s global energy infrastructure. Moreover, they represent the fastest-growing energy storage technology in the sector. In , deployments more than doubled compared with , making battery storage the leading commercially available energy technology in the power sector. Significant growth has been observed in utility-scale and behind-the-meter (site-specific) batteries, as well as in local grids and residential solar energy systems (which are often paired with residential batteries). All this contributed to a global addition of 42 GW in battery storage capacity in . Battery deployment in electric vehicles (EVs) alone increased by 40% in the same year, thanks to 14 million new electric cars on the road.
According to the International Energy Agency (IEA), a six-fold increase in global battery storage capacity is necessary to meet the ambitious climate targets for set by COP28. This increase is essential to facilitate tripling the world’s renewable energy capacity and phasing out fossil fuels by the end of the decade. Indeed, to stabilise the integration of renewable sources like solar and wind into the energy grid, approximately 1,500 GW of energy storage capacity will be needed by , of which 1,200 GW is expected to be provided by batteries.
Figure 1 – Global battery storage capacity additions –
Source: Solar Power Europe
Battery technologies feature various chemistries, each suited to specific applications. For example, lead-acid batteries are favoured for their cost-effectiveness, while nickel–cadmium batteries are valued for their durability and high discharge rates in industrial settings. Nickel-metal hydride batteries offer high energy density. And emerging alternatives promise greater sustainability and safety than traditional varieties. Lithium-ion batteries are the most prevalent of these emerging battery technologies, occupying more than 50% of the market in thanks to their superior energy density and efficiency. This makes them indispensable across a wide range of applications, particularly for mobile electronics and EVs.
While lithium-ion batteries continue to power billions of personal devices worldwide, of their annual production, a significant increase from 50% in , when the market was just one tenth its current size. With decreasing costs and enhanced performance, these batteries have become a cornerstone of modern economies, not only , but also boosting growth in the energy sector. To give some idea of the size of the market,
This article aims to provide an overview of the latest advances in energy storage technologies, highlighting their rapid growth and increasing significance in the global power sector. It also explores how these developments are shaping the future of energy systems, particularly through the adoption of battery storage in various applications.
Rapid growth in battery storage: leading European markets and outlook
The year marked a significant breakthrough for battery storage systems in Europe, as their vital role in ensuring a secure and cost-effective clean energy transition was recognised. Batteries have now entered a new phase of their development, with the exponential growth curve beginning to steepen. During , 17.2 GWh of storage capacity was installed, nearly doubling the market size (+94%) compared with and surpassing the 10 GWh mark for the first time. This was the third consecutive year that the European market doubled in size, following record growth in and of 94% and 102% respectively. The market size in was 115 times larger than a decade ago when only 150 MWh was installed.
Figure 2 – Projected annual battery storage installations in Europe –
Source: IEA
In terms of new capacity, three countries emerged in as the most successful markets in the EU (see Fig. 3). Germany led the way by deploying a further 5.9 GWh (+152% versus ), followed by Italy, which connected a record 3.7 GWh to the grid (+86%) and Austria, which continued its strong growth trajectory adding over 1 GWh of battery storage capacity (+95%). Czechia is also worth noting for its remarkable surge: it tripled its annual market with over 900 MWh installed in , driven by its robust residential sector. Elsewhere in Europe, we see the United Kingdom, which added 2.7 GWh to its network (+91% versus ).
Figure 3 – Storage is concentrated in a few EU countries
Source: Ember
The importance of energy storage
Energy storage boils down to the capture of energy produced for subsequent use, playing a vital role in maintaining a reliable and stable power supply. This is especially important to balance the intermittent nature of renewable energy sources like solar and wind, which only generate power when the sun shines or the wind blows. Indeed, energy storage systems are indispensable when managing supply and demand; they optimise the use of renewable energy and enhance grid stability.
Among the various storage technologies available, batteries have grown in importance due to their flexibility and reliability. By quickly addressing grid imbalances and providing essential ancillary services like frequency regulation and voltage support, batteries are key to advancing a more efficient and sustainable energy future.
Figure 4 – Battery location in the power system
Source: Accuracy
The need for innovation
Although the sector has grown significantly and seen much progress, innovation in energy storage remains essential to meet future energy demand and achieve sustainability goals. As the world transitions towards a low-carbon economy, reliance on renewable energy sources will continue to grow, making the need for efficient and cost-effective energy storage solutions more pressing than ever. Without innovation in energy storage, the potential for renewable energy to replace fossil fuels could be severely limited.
New solutions are required to address the current challenges in energy storage. Developing new battery chemistries that offer longer lifespans, higher energy densities and lower environmental impacts could revolutionise the industry. Additionally, breakthroughs in materials science, manufacturing processes and recycling techniques could help reduce costs and improve sustainability.
Alternative storage technologies are needed too. Solid-state batteries, flow batteries and hydrogen storage are all expected to offer better performance and fewer environmental concerns than current options. Innovation in energy storage is not just about improving existing technologies but also about finding entirely new ways to store and manage energy.
Figure 5 – Europe – The largest projects by technology type
Source: ENTEC
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Current challenges
Energy storage, particularly in the form of batteries, has become a critical component of modern energy systems, especially as renewable energy sources like solar and wind represent ever greater proportions of total energy generation. However, despite its importance, energy storage still faces various challenges that hinder its widespread adoption.
Achieving high energy density is essential for storing large amounts of energy in a small space. Notwithstanding, this characteristic in current battery technologies is limited when compared with the energy required for applications like EVs and grid storage. This results in a situation where batteries must be larger and heavier—and charged more frequently—leading to lower efficiency and higher cost.
The cost of lithium-ion battery production is relatively high at €126 per kWh, particularly for the advanced technologies necessary for long-duration storage and high-capacity applications. High costs make energy storage less economically viable, a problem that is exacerbated in large-scale grid applications. By comparison, in some of the most efficient markets, the levelised cost of energy for solar power and offshore wind can be as low as €0.05 and €0.08 per kWh respectively.
Batteries rely on critical raw materials like lithium, cobalt and nickel. However, these elements are rare, and they are often sourced from geopolitically sensitive regions Supply chain constraints and environmental concerns could thus limit the scalability and sustainability of current battery technologies.
Batteries degrade over time. This natural process reduces their capacity and efficiency, resulting in shorter battery lifespans, as well as greater waste and higher replacement costs. This is a limiting factor in the overall sustainability of battery systems.
Despite their use in everyday items, lithium-ion batteries can pose safety risks due to overheating. Safety concerns can limit the deployment of batteries for certain applications, particularly in densely populated or high-risk areas.
The lifecycle of batteries, from mining to disposal, raises considerable environmental challenges, including a significant level of carbon emissions and toxic waste. Without improved recycling methods and the use of more sustainable materials, batteries could be considered more a hindrance than a help for environmental concerns.
Grid-scale energy storage requires batteries that can store and discharge large amounts of energy over long periods. Yet, current technologies struggle with the cost, scale and duration needed for such use. Inadequate grid storage can lead to inefficiencies in the system and limit the integration of renewable energy sources upstream.
There is a risk of relying too heavily on a single battery technology, like lithium-ion. Diversifying storage technologies to include solid-state batteries, flow batteries or alternative chemistries is important to avoid supply chain disruptions or technological limitations.
Energy storage technologies are rapidly advancing on several fronts. Lithium-ion batteries continue to improve in capacity, charging speed and longevity, while solid-state batteries promise significant safety and energy density improvements. Below is an overview of the latest advances and key developments in various energy storage technologies:
Lithium-ion batteries
Figure 6 – Lithium-Ion battery pack and cell prices –
Source: IEA
Solid-state batteries
Flow batteries
Supercapacitors
Different energy storage technologies offer varying power and energy ranges to meet diverse needs across the energy sector. For instance, pumped hydro storage, one of the most established methods to date, typically provides high energy capacity with power outputs ranging from megawatts to gigawatts. This makes it suitable for large-scale, long-duration storage. By contrast, lithium-ion batteries, known for their fast response times and high energy density, generally offer power outputs from a few kilowatts to megawatts, with energy capacities suitable for both grid applications and EVs. Flywheels deliver high power with short-duration energy storage, making them ideal for applications requiring rapid energy release and quick frequency regulation. Supercapacitors, with their ability to deliver bursts of power over short periods, are well-suited for applications needing rapid charge and discharge cycles. Each technology’s power and energy capabilities align with specific operational requirements, making it essential to choose the right solution based on the application’s duration, response time and scale.
Figure 7 – Power and energy ranges of different storage technologies
Source: Accuracy
Recent developments in The Netherlands
The Netherlands is steadily incorporating more renewable energy sources into its grid. The Dutch government’s Hoofdlijnenakkoord underlines the critical role of battery storage in the national energy transition, highlighting its importance to achieve energy independence and enhance grid stability. This comes as, in its latest plans unveiled on 13 September, the Dutch government announced it will continue to invest in and stimulate the development of battery energy storage solutions, albeit reducing the overall size of its investment.
Many initiatives are being put in place to boost the development of energy storage technologies in the country.
GIGA Storage
GIGA Storage and TenneT have signed the Netherlands’ first time-limited contract, marking a significant milestone in the more efficient use of the existing electricity grid. This groundbreaking agreement allows GIGA Storage to draw electricity from the grid or feed it back for at least 85% of the time.
This new type of contract, created under the National Action Programme for Grid Congestion, enables GIGA Storage to connect its battery project, GIGA Leopard—with a capacity of 300 MW and a storage capacity of up to 1,200 MWh—to the electricity grid. It will be the first time that energy storage will be realised at an industrial in the country. This innovative contract promotes more efficient use of the limited grid space, a need that is growing due to congestion that prevents connections with full and fixed transmission rights. Moreover, it offers customers a discount of up to 65% on transmission tariffs.
To supplement the existing firm transmission law, the Netherlands Authority for Consumers and Markets approved time-based and time-block contracts in July . Time-based contracts allow large consumers to connect to the electricity grid with guaranteed availability for at least 85% of the time. These contracts apply exclusively to TenneT’s large business customers, which benefit from reduced transmission tariffs, and potentially free up capacity for others on the waiting list. These new contract types are especially appealing to companies without round-the-clock operations and are offered by grid operators as an alternative to fixed transmission rights.
RWE
The German energy company RWE is launching its first battery storage project in the Netherlands. The company will invest €25 million in a 35 MW / 41 MWh battery energy storage system (BESS) at its Eemshaven biomass plant. Construction is set to begin by the end of the year, with commissioning expected in early .
RWE stated that the BESS is one of several “innovative demand assets” aimed at integrating the OranjeWind offshore wind farm’s intermittent power into the Dutch energy grid. The company also plans to incorporate green hydrogen production as part of this effort.
Lion Storage
The Dutch developer Lion Storage has secured a building permit for a battery energy storage project located in the Vlissingen port, in the southwestern Netherlands. After introducing the project earlier this year, Lion Storage announced in June that its flagship BESS project, Mufasa, had reached the significant milestone, with its building permit now granted irrevocably.
With a power output of 364 MW and a capacity of 1,457 MWh, Mufasa is set to become the largest utility-scale BESS in the Netherlands. Strategically located on the North Sea at one of the country’s emerging energy hubs, the project will have direct access to TenneT’s high-voltage grid and proximity to several large-scale hydrogen electrolysis and offshore wind projects currently under development. Commercial operations are expected to begin in .
Policy and incentives
European and Dutch policies and incentives are vital to support the development and adoption of innovative energy storage solutions. The EU’s comprehensive approach includes regulatory support, funding and strategic initiatives like the Green Deal and Horizon Europe. The Green Deal aims to make Europe the first climate-neutral continent by , driving substantial investment in clean technologies, renewable energy and large-scale infrastructure projects. The Horizon Europe programme supports this vision by funding research and innovation to develop advanced energy storage solutions, facilitating a sustainable transition and reinforcing Europe’s technological leadership in new and emerging technologies.
The Netherlands is advancing towards a sustainable energy model through targeted actions (e.g. subsidies, research initiatives and regulatory reforms). These measures are key to managing the integration of variable renewable energy sources like solar and wind, which can strain the grid without effective energy storage solutions. Financial and regulatory incentives aim to boost private investment in energy storage, which will be essential to meet climate goals and ensure a reliable energy system, in line with EU strategies for energy independence and sustainability.
However, the country faces significant challenges in scaling up energy storage. Current capacity is just 150–200 MW, far short of the estimated 9 GW needed by , according to TenneT. Barriers include high initial costs, complex project evaluations and a lack of supportive financing and regulatory frameworks. Dutch battery operators also face high grid transportation costs, which can account for over 80% of operating expenses, making subsidies or cost reductions vital to competitiveness.
Further, standards and regulations on safety, recycling and cybersecurity for battery systems must be updated. Robust standards will improve the efficiency and safety of storage solutions, boosting public and investor confidence in the sector’s sustainability.
Conclusion
The Netherlands faces significant challenges in scaling up energy storage, including high initial costs, complex regulatory frameworks and insufficient financial support, and these all hinder its rapid development. Current storage capacity falls far short of the projected need for , underlining the urgency for action. The specifics of the government’s “Schoof 1” plans, expected to be released in the coming weeks, will be instrumental in addressing these barriers and shaping the future of energy storage in the country.
Looking ahead, the future of battery storage appears promising as its expansion accelerates, fuelled by the ongoing energy transition: the continuous rise of renewables is closely connected with the deployment of clean flexible sources like batteries, and the electrification of the transportation network and heating, together with grid modernisation, will also depend on battery storage. Technological advances are expected, with significant cost reductions likely to boost the deployment of battery energy storage systems. In this context, policy and regulatory efforts should focus on establishing a robust and stable framework for batteries.