
Beyond the grid: how storage technologies are shaping the energy transition
Enabling stable grids with advanced energy storage solutions
As countries set ambitious decarbonisation targets and industrial consumers and tech companies push for sustainability, the reliance on weather-variable renewable energy sources is growing rapidly. However, the inherent intermittency of these renewables presents significant challenges to grid stability and reliable energy supply. Energy storage has emerged as the key solution to manage these fluctuations, ensuring a consistent power supply and enhancing system resilience. With storage capacity expected to surpass thermal capacity, and substantial investments on the horizon, storage technologies will be pivotal in the future energy landscape.
Flexibility needs over different timeframes and potential solutions

Current situation and challenges faced
Weather-variable renewables are expected to be deployed at scale to meet the ambitious decarbonisation targets set by different countries, but also as part of the sustainability agendas of the majority of industrial consumers and tech companies. Electricity demand is also to increase with more widespread electrification.
The energy transition brings new challenges:
- Weather dependent generation is not dispatchable and hence does not follow underlying demand patterns. There are times when there is oversupply and times when renewable generation does not suffice to cover the demand
- Innovative solutions are needed to manage system stability with higher levels of renewables and little conventional thermal generation
- Consumer engagement and widespread demand side response (DSR) can bring us one step closer to a power system fuelled solely by renewables. But this will take time and there may be limits to the extent to which demand can shift across different periods. This raises questions about how the energy transition can be managed and what can be done to meet inflexible demand.
Storage has emerged as the technology of choice. It is the most established solution for managing fluctuating energy sources, whilst also contributing to system stability. Several storage projects have already been introduced in many countries, and, going forward, storage capacity will surpass thermal capacity.
Battery storage alone is expected to reach 170 GW across Europe by 2050 with an estimated investment cost of EUR 125 billion in today's money.
Typical hourly generation and demand pattern for a two-week period (GWh)

System operators say that storage is a “new tool in the toolbox”, operators of renewable plants hope that storage will create additional demand when there is an oversupply of renewable generation and support project economics, and utilities and industrial consumers view storage as a way of creating “firm” green products. The only certainty is that storage will play an increasingly important role in power systems of the future.
Looking ahead
Storage includes a wide range of different types. Some of these have been around for a long time, others have been commercialised more recently and new solutions are emerging. A mix of storage technologies is needed in future power systems with different characteristics and durations (short and long duration) to support different applications:
- Managing grid congestion by absorbing electricity that the grid cannot accommodate in specific locations and times, minimising the need for network extension
- Very fast response to manage the frequency of the system, typically coming from short-duration electrochemical battery storage
- Within-day load shifting storing excess renewables output to be used at times of high demand and/or low renewable-energy output, displacing thermal generation
- Multi-day load shifting to help manage extended periods of high demand and low renewables output
- Seasonal load shifting to store surplus electricity generated during periods of high production, such as summer, for use during periods of low production, such as winter, enabling a reliable supply throughout the year
Lithium-ion batteries are currently the most established storage technology and are used for short duration storage applications. Going forward, a more balanced mix will be needed with a role for other types of batteries (e.g. flow batteries and iron-air batteries) and power-to-X storage technologies, such as compressed air energy storage (CAES), liquid air energy storage (LAES) and thermal energy storage in the form of molten salt, hot water, rocks and sand or heat pumps. It is to be noted that some of those technologies can also be used for long-term storage, alongside hydrogen produced through electrolysis in combination with renewable electricity (e.g. from wind or solar). Finally, pumped storage hydropower represents a key technology for seasonal storage, even though the expansion potential in several geographies is limited.
Overall, there is a clear role for storage in future power systems. More effective demand-side participation and real-time grid monitoring (so-called smart grids) can significantly limit the role of grid-scale storage.
Insights at a glance
- Technology advancements
Fostering further technological advancements and cost reductions in batteries, as well as other more innovative storage technologies (e.g. CAES, LAES, and other power-to-X technologies)
- Supply chain
Enabling efficient and sufficient manufacturing processes that support deployment efforts, as well as effective supply chain management to avoid raw-material shortage or vendor concentration
- Policy frameworks
Developing appropriate policy frameworks to attract the required investments when market dynamics solely do not provide sufficient investment security conditions
- Market rules
Adapting the current market functions and dispatch largely developed for the thermal technologies in order to meet the needs of future power systems and better reflect storage capabilities and characteristics
- Energy companies
Include storage in existing portfolios as a hedge against commodity-price volatility and intermittent generation, and to support the development of ‘firm’ green products for consumers
- Industrial players
Adopt industrial and commercial storage on-site to reduce consumer bills, limit exposure to highly volatile wholesale prices, increase back-up generation capabilities and minimise transmission tariffs
- Governments
Achieve affordable, acceptable and accessible decarbonisation strategies by promoting the appropriate quantities and varieties of storage technologies, especially if market signals fail to emerge naturally
