Energy Storage Fuels the Clean Energy Shift
March 18, 2025
ByHaley Zaremba– Mar 18, 2025, 4:00 PM CDT
- Energy storage is essential for stabilizing the variable energy supply from renewable sources and ensuring grid reliability.
- While lithium-ion batteries currently dominate the energy storage market, concerns about their limitations and environmental impact are driving the development of alternative technologies.
- Emerging solutions like gravity storage and improved lithium-based batteries show promise for long-term, sustainable energy storage.
Energy storage solutions are at the heart of a successful clean energy transition. As more wind and solar energy are integrated into global power grids, energy supplies become more variable and energy supply and demand rates are therefore frequently misaligned. Energy storage is a critical solution for stabilizing energy inflows and outflows to and from the grid for greater energy security. It’s heating up to be a major market sector in the coming years, but it’s still not clear what energy storage technology will emerge as the frontrunner.
The frequent mismatch of variable energy production and consumer demand places a significant strain on electric grids, which are historically designed for a steady and easily manipulated baseload supply of fossil fuels. This has created complex issues in global energy markets. In countries and states where renewables already make up a large portion of the energy mix, energy prices can even dip below zero, wreaking havoc in energy markets. “This lowers the potential for spot market earnings for producers and highlights the need for complementary investments in flexibility and storage capacity,” the International Energy Agency reports.
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As a result, energy storage, though nascent, is already heating up to be “clean energy’s next trillion-dollar business.” As of 2022, the energy storage system market size was valued at $198.8 billion. In the near term, Allied Market Research estimates that it will reach $329.1 billion by 2032, with a compound annual growth rate of 5.2% from 2023 to 2032.
Currently, energy storage is dominated by lithium-ion batteries, but there is significant competition to come up with more suitable long-term storage solutions. Today’s energy storage sector is highly fragmented and deeply competitive, with varied technologies vying to disrupt the market.
Lithium-ion batteries, while dominant, have considerable drawbacks as an energy storage solution. First, lithium-ion batteries can only hold energy for hours at a time, when more appropriate storage solutions would be able to store energy for months and even years to stabilize larger production and demand patterns, such as seasonal variations. Moreover, these batteries have a short shelf-life, degrading quickly with lessening capacities, and are hard to recycle.
And then there are problems with sourcing lithium. For one thing, extracting lithium is a dirty and water-intensive process that can create significant issues for environments and public health. Second, China dominates global lithium value chains, at an estimated 72% of the lithium-ion market, creating critical vulnerabilities. “These factors push many governments and companies to explore alternatives that can operate without relying heavily on mined materials,” Yahoo! News recently reported.
Some emerging alternatives for next-gen battery storage pair lithium with other elements to improve their performance, such as lithium-sulfur batteries, which have a much better shelf life than plain old lithium-ion batteries, and lithium-metal batteries using nylon additives for greater efficiency, improved lifespans, and fewer adverse reactions.
Other emerging technologies move away from lithium altogether. One of the oldest forms of energy storage – gravity storage – is also one of the most promising for the future. A new venture between Swiss company Energy Vault and the Chinese government, known as EVx, is building a massive pilot project for cutting-edge gravity storage in Rudong, China. “Standing over 120 meters high, the EVx building is a massive mechanical tower for lifting giant blocks weighing 24 tons during surplus energy,” Yahoo! News reports. “When the grid demands more power, the blocks are lowered, and their potential energy is converted back into electricity.” The simplicity of gravity storage is its strength – barring mechanical failure, gravity batteries can hold energy indefinitely.
Other promising energy storage options include pumped hydro energy storage – in effect, gravity storage using water – and compressed-air energy storage, which could potentially store energy in the approximately 3.9 million depleted oil and gas wells in the United States.
By Haley Zaremba for Oilprice.com
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