This project is supported by the Interreg Danube Region Programme co-funded by the European Union.
This Energy Storage Outlook is a core component of the Interreg Danube Region Programme DRP0200271 StoreMore project. The primary goals of this document are:
According to the IEA World Energy Outlook 2023: „We are on track to see all fossil fuels peak before 2030 A legacy of the global energy crisis may be to usher in the beginning of the end of the fossil fuel era: the momentum behind clean energy transitions is now sufficient for global demand for coal, oil and natural gas to all reach a high point before 2030 in the STEPS. The share of coal, oil and natural gas in global energy supply – stuck for decades around 80% – starts to edge downwards and reaches 73% in the STEPS by 2030.”
The 2023 World Energy Outlook report by the International Energy Agency (IEA) underscores the current turbulent times in the energy sector, influenced by geopolitical tensions and market volatility, yet reveals positive strides toward a cleaner energy future. Key findings from the report highlight that despite easing from the immediate crisis experienced in 2022, the energy sector remains fraught with challenges such as high fossil fuel prices, ongoing conflicts impacting energy supplies, and prevailing economic uncertainties marked by inflation and elevated debt levels. However, there is a silver lining as the report notes significant advancements in clean energy technologies and investments, which have increased by 40% since 2020. These developments are propelled not just by emission reduction goals, but also by the strong economic rationale for renewable energy sources, which are becoming integral to enhancing energy security and creating job opportunities in the sector.
The report outlines a transformation in the global energy landscape with increasing deployment of solar photovoltaics (PV) and electric vehicles (EVs), which are pivotal in driving down emissions. In 2023, record-breaking additions of over 500 gigawatts (GW) of renewable capacity are expected, highlighting a rapid pace of change compared to previous years. Moreover, a daily investment exceeding USD 1 billion on solar deployment signifies a robust move towards a sustainable energy system. This transition is further supported by expanding manufacturing capacities for key components like solar PV modules and EV batteries. Despite these positive trends, challenges persist, and the report stresses the need for comprehensive solutions that address not only the diversification of energy sources but also the systemic changes necessary for a sustainable and secure energy future.
The 2023 World Energy Outlook report highlights significant developments in energy storage technologies, noting a robust expansion particularly in utility-scale and behind-the-meter battery storage. In 2022, the deployment of these battery storage systems surged by 90%, demonstrating a rapid scale-up to meet the growing demand for renewable energy integration and grid stabilization. This increased reliance on energy storage is pivotal for balancing intermittent renewable energy sources like solar and wind, ensuring a stable and reliable energy supply despite the variable nature of these resources.
Furthermore, the report discusses the strategic role of energy storage in facilitating the transition to a low-carbon economy. It emphasizes the substantial investments in battery technology and infrastructure are critical to achieving this transition. Energy storage systems enable more extensive use of renewable energy by mitigating issues of variability. Advancements in energy storage technology are also crucial for supporting the electrification of transportation and other sectors, ultimately contributing to significant reductions in carbon emissions and enhancing energy security globally.
„An important initial point is that rapid further deployment of solar PV in the NZE Solar Case would require measures to integrate the additional solar PV into electricity systems and maximise its impact. Scaling up battery storage would be crucial in most cases to improve the alignment of solar PV output with electricity demand patterns and system needs. In the NZE Solar Case, utility-scale battery deployment in 2030 is close to double the level in the STEPS.”
Energy storage technologies are with us for a long time. Some of them since 2000 BC, others are results of recent technological development. The energy storage landscape is constantly evolving, a snapshot from 2014 shows a very different picture that we experience now. An ES comparison study from 2014 presents Lithium batteries as the solution with significant potential for growth and improvement, however did not recognize Li-Ion as the most mature battery technology:
In the years following 2014, however, lithium-ion technology rapidly matured. A combination of factors propelled its meteoric rise: a steep decline in production costs, significant improvements in energy density and cycle life, and the burgeoning electric vehicle market, which both incentivized innovation and benefited from the increased scale of battery manufacturing. Lithium-ion batteries quickly outpaced other electrochemical storage options, becoming the dominant technology in both grid-scale and behind-the-meter applications.
The rise of energy storage represents a fundamental shift in the global energy landscape. By addressing the limitations of renewable sources, storage technologies empower a future where clean energy sources can replace fossil fuels on a wider scale, promoting sustainability and combating climate change. Continued investment and innovation in this sector are crucial for realizing this vision. IEA World Energy Report 2023 projects a 10-fold increase in battery capacity additions between 2022 and 2030.
It is important to acknowledge and recognize market trends which are at odds with StoreMore’s original baseline assumptions: potential lithium shortages and increase of Li-ion battery prices in the mid term.
According to BloombergNEF’s annual battery price survey finds a 14% drop from 2022 to 2023, the price of lithium-ion battery packs has dropped 14% to a record low of $139/kWh, according to analysis by research provider BloombergNEF (BNEF). This was driven by raw material and component prices falling as production capacity increased across all parts of the battery value chain, while demand growth fell short of some industry expectations. Battery demand across electric vehicles and stationary energy storage is still on track to grow at a remarkable pace of 53% year-on-year, reaching 950 gigawatt-hours in 2023. Despite this growth, major battery manufacturers reported lower utilization rates for their plants, while demand and revenue fell short of many companies’ expectations. As a result, many EV and battery makers revisited their production targets, which in turn impacted battery prices. Lithium prices reached a high point at the end of 2022, but fears that prices would remain high have largely subsided since then and prices are now falling again.
While the IEA World Energy Outlook 20231 forecasts significant growth in battery storage, and the BloombergNEF predicts further decrease of costs, it's essential to acknowledge the potential roadblock posed by lithium availability. Lithium is a crucial component of most current battery technologies, and the rapidly increasing demand for electric vehicles and grid-scale storage raises concerns about supply chains.
Rising Costs: Increased demand coupled with potential supply constraints could lead to significant price hikes for lithium and other critical minerals, directly impacting battery costs. This conflicts with the projections of continued price decreases that are central to the widespread adoption of battery storage solutions. IEA forecast on demand for critical minerals supports this assumption.
Impact on Storage Deployment A sustained lithium shortage and the associated cost increases could have several implications for the deployment of battery-based energy storage systems:
It is imperative to consider these emerging supply chain challenges for lithium while evaluating the role of energy storage in the clean energy transition. By exploring diverse storage technologies and emphasizing resource management, the StoreMore project has the potential to provide crucial solutions for a sustainable and reliable energy future.
However the IEA report recognizes the importance of energy storage( „As the deployment of variable renewable technologies increases, the need for storage technologies to complement renewable electricity rises rapidly”) it does not mention any other technology than Battery storage (referring to Lithium-ion batteries), pumped hydro and hydrogen and ammonia (one mention as seasonal storage). Therefore, we believe it is even more important to deliver a comprehensive analysis of available alternative energy storage solutions during project StroreMore.
These technologies are gaining traction, demonstrating the potential to complement battery storage and address specific needs in the evolving energy grid.
The energy storage field is seeing a surge in innovation, with promising startups and novel (or reinvented) technologies emerging. Here's a look at several key technologies that the StoreMore project will examine:
These diverse technologies offer distinct advantages in terms of scale, the specific function they serve, and the duration of energy storage they provide:
The future of energy storage lies in a portfolio approach. By strategically combining technologies based on their strengths and specific applications, a resilient and sustainable energy grid can be achieved. The StoreMore project, with its comprehensive analysis of alternative energy storage solutions, plays a vital role in advancing this vision.
In an era defined by the rapid expansion of renewable energy and the pressing need for grid resilience, no single storage technology can adequately address the diverse challenges of modern energy systems. Embracing a multifaceted future in energy storage means integrating complementary solutions that offer long-duration capacity, rapid response, scalability, and minimal environmental impact. This holistic approach enables us to harness the unique strengths of various technologies, ensuring that energy can be stored efficiently and dispatched effectively to meet fluctuating demands. The strategic selection of technologies—Gravity Storage, Flywheel Energy Storage, Hydrogen-based storage, Vanadium Redox Flow Batteries, and Ultracapacitors—reflects our commitment to developing a robust and adaptable energy infrastructure that not only supports the integration of renewables but also paves the way toward a sustainable, low-carbon future.
After a comprehensive evaluation of ten energy storage technologies, our analysis has converged on a portfolio of five key solutions: Gravity Storage, Flywheel Energy Storage, Hydrogen-based storage, Vanadium Redox Flow Batteries, and Ultracapacitors. This selection reflects a careful balance between technical performance, scalability, environmental impact, and economic feasibility to support a diverse range of grid applications and renewable integration challenges.
During the review process, we assessed the merits and limitations of each technology, considering factors such as energy density, round-trip efficiency, operational lifespan, and the maturity of the technology. Although all ten options offer unique benefits, these five emerged as the most promising candidates to address the multifaceted needs of modern energy systems. By narrowing our focus, we aim to harness their complementary strengths to build a resilient, adaptive, and low-carbon energy infrastructure.
Gravity Storage is recognized for its potential to provide long-duration energy storage with minimal operational emissions. Leveraging the fundamental physics of gravitational potential, this technology can store energy over extended periods, making it particularly suited for balancing seasonal variations and integrating intermittent renewable sources. Its scalability, especially when implemented in surface-based or repurposed underground systems, positions it as a reliable backbone for grid stability, even though its energy density is lower compared to some chemical solutions.
Flywheel Energy Storage stands out due to its rapid response capabilities and high round-trip efficiency. Flywheels excel in applications that require immediate power delivery, such as frequency regulation and transient grid support. Their ability to absorb and release energy within seconds makes them ideal for maintaining grid stability during sudden fluctuations. Despite their relatively lower energy capacity, flywheels contribute critical high-power, short-duration support, complementing other long-duration storage options.
Hydrogen-based storage offers a versatile approach by converting surplus renewable energy into hydrogen via electrolysis. This stored hydrogen can then be used directly as a fuel or reconverted into electricity, serving as both a seasonal storage solution and a cross-sector energy carrier. Although hydrogen systems face challenges regarding efficiency and infrastructure requirements, their flexibility in meeting diverse energy needs—from transportation to industrial applications—renders them a strategic component of a future low-carbon economy.
Vanadium Redox Flow Batteries bring a unique combination of scalability, safety, and durability. Their ability to decouple power and energy capacities enables flexible sizing for various applications. With a long operational life and deep discharge capability, vanadium systems provide reliable, medium to long-duration storage while mitigating some of the environmental concerns associated with conventional battery chemistries. This makes them an attractive option for large-scale grid applications where energy storage and dispatch are critical.
Ultracapacitors complement the portfolio with their capability for instantaneous energy delivery. Although they have lower energy density compared to chemical batteries, their extremely high power density and fast charge–discharge cycles make them invaluable for applications requiring burst power, such as voltage stabilization and peak shaving. The robustness and long cycle life of ultracapacitors enhance overall system reliability and provide rapid-response support where needed.
Collectively, these five technologies address a spectrum of grid challenges. Gravity Storage and Hydrogen offer long-term, seasonal support; Flywheels and Ultracapacitors deliver rapid, high-power bursts to manage transient disturbances; while Vanadium Redox Flow Batteries bridge the gap with scalable, reliable medium-duration storage. By combining these solutions, stakeholders can design a tailored, hybrid storage system that not only improves the reliability and efficiency of renewable energy integration but also mitigates the risks associated with reliance on a single technology.
In summary, this diversified approach is critical for modern energy systems. It ensures that energy storage solutions are robust enough to handle the variable nature of renewable energy, adaptable to specific regional and operational needs, and capable of supporting the transition toward a more sustainable and resilient energy future.