Although energy storage solutions such as compressed air and pumped storage have been around for decades, they have not had significant success in the global market when compared to the substantial increase in grid capacity over the past 50 years. Now, however, energy storage on the grid is reaching a turning point. Numerous new technologies – and variations on “old” technologies, such as compressed air and pumped hydro storage – are being demonstrated in countries around the world. To meet the growing opportunity, utilities, grid service providers, and equipment suppliers are all intensifying their efforts in the energy storage arena. According to a recent report from Pike Research, total energy storage capacity worldwide will increase from 121 MW in 2011 to 12,353 MW in 2021 – multiplying 100-fold over a 10-year period.

That equates to just over $122 billion of investment in energy storage projects over the same period.

“Traditionally, grid operators have only had access to generation assets, such as natural gas peakers, to balance electricity flows across the grid by adding power to it,” said research analyst Anissa Dehamna. “Energy storage provides grid operators with an alternative to traditional grid management, offering a variety of technologies that together are well-suited for up to 17 applications of energy storage.”

Factors currently limiting the growth of the energy storage sector include inflexible electricity market structures, high capital costs for energy storage projects, a disconnection between the owners of assets and the entities that benefit from such projects, and instability in the grid – both inherent instabilities and those caused by the integration of new, renewable sources of energy.

Energy storage technologies perform a number of functions that will start to overcome those barriers in the next few years, including the integration of renewables (both solar and wind), arbitrage, peak shifting and load leveling, and the deferral of transmission and distribution upgrades. Pike Research anticipates that integrating renewables will represent approximately half of the total capacity deployed for long duration energy storage, while load leveling/peak shifting will account for 31% of the total market.