Issue Brief: Energy Storage

This issue brief from the Environmental and Energy Study Institute examines the role of energy storage technologies in mitigating electricity industry challenges, integrating renewable energy, and improving grid reliability. It details various storage technologies—ranging from pumped hydro and compressed air to advanced batteries and flywheels—and analyzes the impact of U.S. federal policies, specifically FERC orders and Department of Energy (DOE) initiatives, in overcoming implementation barriers.

• Energy storage technologies can address electricity industry challenges by managing fluctuating demand, maintaining power during interruptions, helping consumers avoid peak utility rates, and facilitating the integration of variable renewables like wind and solar.
• Pumped Hydroelectric Storage is a mature, commercial-scale technology with systems capable of reaching 4,000 MW and 85 percent efficiency, with a lifespan of up to 60 years. The United States has more than 22 GW installed, and Europe is expected to install over 15 GW of new capacity by 2020.
• Compressed Air Energy Storage (CAES) is the only other commercial bulk-energy storage plant currently deployed besides pumped hydro. First-generation systems operate in Germany and Alabama, while a second-generation project, the Bethel Energy Center in Texas, is expected to reach 317 MW with discharge times up to six hours.
• Various battery technologies offer different utility-scale applications: Sodium-Sulfur (NaS) batteries are used for wind and solar integration (e.g., the 34 MW Rokkasho project in Japan), while lithium-ion batteries are used in electric vehicles and grid services (e.g., the Laurel Mountain Wind Farm in West Virginia). New research at the DOE's JCESR aims to replace expensive vanadium in flow batteries with inexpensive lithium and sulfur.
• Flywheels provide fast-response frequency regulation and voltage stabilization, though they are currently limited in energy storage capacity to typically no more than 1.65 MW. A 20 MW storage system in New York serves as a frequency regulation plant using this technology.
• FERC Order No. 1000 (2011) and Order No. 755 (2011) have been critical for storage implementation. Order 1000 reforms transmission planning to allow for storage as a transmission alternative, while Order 755 ensures that technologies providing frequency regulation and grid stabilization are compensated based on performance.
• The DOE has supported storage through the American Recovery and Reinvestment Act of 2009, investing $185 million across twelve projects in seven states. Additionally, the Joint Center for Energy Storage Research (JCESR), founded in 2012 with $120 million, aims to provide five times the energy storage of current lithium-ion technology at one-fifth the cost by 2017.
• Proposed legislation includes the STORAGE Act of 2013 (S. 1030), which proposes a 30 percent investment tax credit (ITC) for businesses and homeowners using storage, and a 20 percent ITC for grid-scale systems. The Master Limited Partnerships Parity Act (S. 795) seeks to expand the MLP corporate structure to renewable energy and storage companies to lower capital costs.

APA

Wolkon, B. (2013). Issue Brief: Energy Storage. Environmental and Energy Study Institute. https://www.eesi.org/papers/view/issue-brief-energy-storage

Chicago

Wolkon, Ben. Issue Brief: Energy Storage. Environmental and Energy Study Institute, 2013. https://www.eesi.org/papers/view/issue-brief-energy-storage.

Wikipedia

{{cite report |last1=Wolkon |first1=Ben |title=Issue Brief: Energy Storage |publisher=Environmental and Energy Study Institute |date=6 August 2013 |url=https://www.eesi.org/papers/view/issue-brief-energy-storage |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wolkon2013issue, author = {Wolkon, Ben}, title = {{Issue Brief: Energy Storage}}, institution = {Environmental and Energy Study Institute}, year = {2013}, month = aug, url = {https://www.eesi.org/papers/view/issue-brief-energy-storage}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }