In my previous article, Forget Transition; Expansion Is the New Energy Imperative, I posited  that surging electricity demand from AI data centers, electric vehicles, and widespread electrification calls for a bold new mindset. Instead of debating whether renewables should replace thermal generation, we need to expand total power generation capacity, and quickly.

I proposed a pragmatic approach to energy expansion: for every megawatt (MW) of dispatchable thermal generation added, an equivalent MW of renewable energy capacity must also be added. This balanced approach maximizes renewable output when it’s available, while ensuring reliable backup when it’s not.

Some readers rightly noted that the article didn’t fully address a crucial piece of the energy expansion puzzle, Battery Energy Storage Systems (BESS). I appreciate the thoughtful feedback and the challenge to dig deeper.

So in this week’s article, we’ll take a comprehensive look at BESS, from residential home batteries to grid-scale storage systems, exploring their economics, performance, and potential to reshape our energy landscape. We’ll examine where the technology stands today, how it’s evolving, and what lies ahead.

It’s going to be a comprehensive and technically rich read, so grab your favourite beverage, get comfortable, and let’s unpack the real state of battery storage.

Revisiting Why Renewables Cannot Stand on Their Own

As solar and wind increasingly dominate electricity generation, they introduce challenges ranging from short-term swings to seasonal variations that can leave the grid vulnerable.

One solution to these challenges is energy storage. By capturing excess electricity when it is available and releasing it when the grid needs it most, battery storage can serve as an effective bridge between variable supply and continuous demand. But can today’s technology deliver 24/7 electricity from solar and wind power, or is that goal still on the horizon?

To capture the full story, we’ll be exploring three major segments:

• Residential / In-home storage systems (behind-the-meter)

• Utility‐scale 4-hour battery energy storage systems (BESS), the present backbone of grid-scale storage

• Long-duration energy storage (LDES), systems that discharge for 6, 8, 10 hours or more, and in some cases offer multi-day or even seasonal storage

Battery Energy Storage Systems

What it is and why modern electricity systems need it

The law of conservation of energy states that energy cannot be created or destroyed; it can only be transformed from one form to another or transferred from one object to another. For this reason, electricity has to be used the instant it is produced.

A BESS is essentially a large rechargeable battery, like the kind in your phone or laptop, just slightly bigger. When generators produce more electricity than is needed, such as during sunny midday hours in regions with lots of solar power, that excess energy can be used to charge a BESS. Later, when demand exceeds supply, this stored electricity can be released back onto the grid, helping to balance generation and consumption in real time.

This ability to store excess power prevents the deliberate reduction of renewable output, known as curtailment, which is one of the hidden inefficiencies of modern power systems. 

Because solar and wind depend on the weather, their output can surge or dip without warning. This can be problematic for modern grids, which require a constant balance of power to maintain frequency and voltage. Batteries can help smooth these fluctuations by storing energy and then responding almost instantly to small imbalances, preventing blackouts or equipment damage.

“Batteries are no longer optional. They provide millisecond-level voltage support, fast frequency response, mitigate curtailment and can even black-start a grid after total failure. Energy storage isn’t just for arbitrage anymore. It’s core resilience infrastructure.”

Hernen Aragon, Principal, Energy and Infrastructure, Actis, After the blackout (September 2025)

Residential / In-Home Storage Systems

What they do and why homeowners are adopting them

Residential energy storage systems, often installed alongside rooftop solar panels, are essentially batteries for your home. They store electricity when it’s abundant and make it available when it’s needed most, such as in the evening, during peak electricity rates, or during a power outage. Think of them as your personal electricity “savings account”. Excess energy is banked when it’s cheap or plentiful, and drawn upon later to reduce costs or maintain power.

Modern home storage units, like the Tesla Powerwall, sonnenBatterie, or LG Chem RESU, integrate the battery with an inverter and intelligent energy management software. This allows homeowners to optimize self-consumption, participate in local demand-response programs, and even connect to virtual power plants that aggregate distributed batteries to support the grid. 

Typical residential systems range from 5 to 15 kWh, which is enough to power essential appliances or, in larger setups, an entire home for several hours. As the average North American household uses around 30 kWh per day, in-home BESS systems can provide emergency back-up for several hours, but do not provide protection from multi-day outage events. One caveat to this is when paired with rooftop solar, homeowners can recharge their battery daily during an extended outage event, provided the sun is shining. This can extend back-up to days, but it is not a guarantee.

Why Homeowners Are Adopting Them

Homeowners are increasingly turning to in-home storage for several reasons:

1. Energy Independence: A home battery reduces reliance on the grid, providing backup power during outages caused by storms, wildfires, or other disruptions.

2. Cost Savings: Paired with time-of-use electricity rates, batteries allow homeowners to store cheap or self-generated energy and use it when rates are high.

3. Environmental Impact: Storing solar energy for later use maximizes self-consumption and reduces reliance on fossil-fuel power plants.

4. Participation in Grid Services: In some regions, batteries can be enrolled in programs that compensate owners for contributing stored energy to the grid during periods of high demand.

In 2024, the global residential battery energy storage market was valued at roughly USD 10 billion and is expected to expand at a compound annual growth rate (CAGR) of about 17.6 % through 2034, reflecting rising homeowner interest in energy independence, resilience, and solar self-consumption.

Utility Scale Storage Systems

Why grid-scale storage is needed

While residential batteries help individual homes manage their energy, the electricity grid faces challenges on a much larger scale. Grid operators must constantly balance supply and demand across millions of users in real time. With the rapid growth of solar and wind generation, this task has become increasingly complex. Output from renewable sources can surge or drop within minutes, while electricity demand rises and falls according to human activity and weather patterns.

Utility-scale BESS addresses these challenges by acting as a massive, flexible buffer for the grid. They store excess electricity when renewable generation exceeds demand, preventing waste and curtailment, and release it when supply falls short or demand spikes. Beyond simply shifting energy in time, large-scale batteries provide critical grid services:

• Fast frequency response: Batteries can react in milliseconds to stabilize grid frequency when supply and demand are out of balance.

• Voltage support: They help maintain stable voltage levels, ensuring reliable electricity delivery across the network.

• Black-start capability: In the event of a total blackout, BESS can help restart power plants and restore the grid.

• Curtailment mitigation: By storing energy that would otherwise be wasted, they maximize the use of renewable generation.

In short, utility-scale BESS are no longer optional add-ons. As the grid becomes more complex, they are increasingly becoming essential infrastructure, providing flexibility, resilience, and stability that individual home batteries cannot. Without them, high renewable penetration could strain the grid, increase curtailment, and even risk reliability during periods of high demand or low generation.

What Utility-Scale BESS Are

A utility-scale BESS is essentially a very large battery connected directly to the electricity grid, either at the transmission level (think high-voltage power lines on lattice towers) or distribution level (think lower-voltage power lines on wooden power poles). Unlike home batteries, which typically store a few kilowatt-hours (kWh) of energy, utility-scale systems operate on the order of tens to hundreds of megawatts (MW) of power, with storage durations commonly ranging from 2 to 4 hours. This scale allows them to serve entire communities, industrial zones, or even stabilize a regional grid.

Most utility-scale batteries today use lithium-ion technology, prized for its high energy density, efficiency, and rapid response times. Within lithium-ion, lithium iron phosphate (LFP) is increasingly popular for large deployments because of its improved safety, long cycle life, and cost advantages. These batteries are sometimes integrated with solar parks or wind farms, allowing excess power to be captured and stored rather than curtailed, and then dispatched when it’s most needed.

By combining size, chemistry, and smart control systems, utility-scale BESS provides both energy storage and fast-response grid services.

Economic and Operational Rationale

For utility-scale BESS, 4-hour systems have emerged as the “sweet spot”. They strike a balance between storage capacity, capital cost, and revenue potential. 

A 4-hour system is long enough to shift energy from periods of high renewable generation to periods of peak demand, provide meaningful capacity to the grid, and participate in multiple market services, while remaining cost-effective and widely financeable. 

Longer-duration systems often face higher upfront costs and uncertain revenue streams, making 4-hour deployments the most common choice for utility-scale projects today.

Utility-scale batteries generate revenue through several channels:

• Energy arbitrage: Buying electricity when prices are low (or storing excess renewable energy) and selling it during peak price periods.

• Capacity markets: Providing guaranteed power availability during periods of high demand, for which operators are compensated.

• Ancillary services: Offering fast frequency response, voltage support, and other services critical to grid stability.

• Deferred grid upgrades: By reducing congestion and peak load on transmission lines, batteries can postpone costly infrastructure expansion.

Declining battery costs and ongoing technology improvements have reinforced the economics of 4-hour systems. Lithium-ion prices have fallen steadily over the past decade, and advances in software, control systems, and battery chemistries have increased efficiency, safety, and cycle life. Together, these factors make 4-hour utility-scale BESS a compelling investment for both grid operators and project developers.

Case Studies: Real-World Lessons from Leading BESS Deployments

Several high-profile utility-scale BESS projects have demonstrated the transformative potential of energy storage while also highlighting challenges that need to be addressed for broader adoption.

Hornsdale Power Reserve (South Australia)

Commissioned in 2017, Hornsdale Power Reserve, operated by Neoen and Tesla, was initially a 100 MW / 129 MWh system (1 hour and 17 minute discharge duration), making it the world’s largest lithium-ion battery at the time. It has since been expanded to 150 MW / 193.5 MWh. The facility has been instrumental in stabilizing the South Australian grid, providing services such as frequency control ancillary services (FCAS) and mitigating the need for peaking (OCGT) power plants. Notably, it recovered its capital costs in just over two years of operation, underscoring its financial viability.

Key Lessons:

• Grid Stability: Effective in maintaining grid stability and preventing blackouts.

• Financial Performance: Demonstrated rapid return on investment through ancillary services and energy arbitrage.

• Technological Innovation: Served as a model for subsequent projects, influencing designs and operational strategies.

Escondido Battery Energy Storage System (California, USA)

The 30 MW / 120 MWh (4 hour discharge duration) BESS in Escondido, California, operated by San Diego Gas & Electric (SDG&E), was one of the earliest large-scale lithium-ion storage systems deployed in the U.S. Since coming online, it has provided valuable grid services such as peak shaving, voltage regulation, and renewable energy integration, helping to reduce strain during high-demand periods and minimize curtailment of solar generation in Southern California.

In 2024, however, the facility experienced a fire confined to a single containerized unit. This incident underscored the importance of advanced cooling technologies and stringent safety protocols in the design and operation of large-scale BESS facilities.

Key Lessons:

• Cooling Technologies: Highlighted the need for advanced cooling systems to prevent thermal runaway.

• Safety Standards: Reinforced the importance of adhering to and exceeding existing safety standards.

• Community Impact: Demonstrated the potential community impact of BESS incidents, stressing the need for transparent communication and preparedness.

Moss Landing Energy Storage Facility (California, USA)

The Moss Landing facility, operated by Vistra, is one of the largest BESS installations in the United States, with a capacity of 300 MW / 1,200 MWh (4 hour discharge duration). While it has significantly contributed to grid reliability, the facility experienced a notable fire incident in 2024. This event highlighted the critical importance of safety protocols and the need for continuous improvement in battery management systems.

Key Lessons:

• Safety Protocols: Emphasized the necessity for robust safety measures and real-time monitoring systems.

• Design Improvements: Prompted revisions in design standards to enhance fire resistance and overall safety.

• Regulatory Oversight: Led to increased regulatory scrutiny and the development of stricter safety regulations.

Case Study Summary

These case studies illustrate the dual nature of utility-scale BESS. While they are powerful tools for enhancing grid stability and integrating renewable energy, they also present challenges that must be carefully managed. The lessons learned from these deployments are shaping the future of energy storage, leading to safer, more efficient, and more reliable systems.

Why 24/7 Renewable Energy Remains Out of Reach

While BESS have revolutionized grid flexibility, they are not a panacea for achieving 24/7 renewable energy. Even with advancements in storage technology, several factors complicate the transition to a fully renewable grid.

Extended Storage Limitations

Current lithium-ion BESS typically provide 2–4 hours of discharge, suitable for daily fluctuations. However, they fall short during extended periods of low renewable generation, such as prolonged cloudy days or wind lulls. Oversizing these systems to extend discharge duration significantly increases costs and may not be economically viable due to diminishing returns on investment.

High Capital Costs and Infrastructure Demands

Achieving 24/7 renewable energy would necessitate a substantial increase in storage capacity. Estimates suggest that global energy storage investments must reach approximately $193 billion annually through 2030 to meet net-zero targets. This scale of investment poses significant economic challenges, especially in regions with limited financial resources.

Geographic and Temporal Mismatches

Renewable energy generation is geographically and temporally variable. For instance, solar energy is abundant in certain regions during the day, while wind energy may be more prevalent at night or in different locations. Aligning energy production with consumption patterns requires extensive grid interconnections and advanced forecasting, which are currently lacking in many areas.

Emerging Technologies and Long-Duration Storage

While 4-hour utility-scale BESS have become a reliable and cost-effective solution for shifting daily energy peaks and stabilizing the grid, they are not a complete answer to the challenges of a fully renewable electricity system. As solar and wind penetration increases, grids will face longer periods of low generation that exceed the capabilities of typical 2–4 hour systems.

These emerging challenges highlight the need for long-duration storage solutions, capable of providing energy for 10, 24, or even multiple days at a time. Such technologies can help bridge seasonal and multi-day gaps between renewable generation and electricity demand, making true 24/7 renewable energy a more achievable goal.

Long-Duration Storage: Enabling 24/7 Renewable Power

The increasing integration of renewable sources, like solar and wind, necessitate solutions that can manage extended periods of low generation. These periods, often referred to as “dunkelflaute,” can span multiple days, challenging the reliability of power grids. To achieve a fully decarbonized and resilient grid, Long-Duration Energy Storage (LDES) technologies are essential.

What Is Long-Duration Energy Storage?

The U.S. Department of Energy defines LDES as systems that can deliver electricity for 10 or more hours. These systems are designed to store excess renewable energy generated during periods of high production and release it during times of low generation, ensuring a continuous and stable power supply.

Technologies Powering LDES

LDES solutions are diverse, each with unique mechanisms and applications:

Flow Batteries

Flow batteries store energy in liquid electrolytes, enabling scalable and flexible storage durations. Each tank contains a liquid electrolyte with dissolved electroactive species (ions that can be oxidized or reduced), with one tank acting as the positive electrolyte (catholyte) and the other as the negative electrolyte (anolyte).

During operation, the two electrolytes are pumped through a central electrochemical cell stack separated by an ion-selective membrane (often a proton exchange membrane, PEM). The membrane allows ions (like H⁺ or SO₄²⁻) to pass through to balance charge while preventing the liquids from mixing. When discharging, a redox reaction occurs: one electrolyte releases electrons (oxidation) and the other gains electrons (reduction), causing electrons to flow through an external circuit and generate electricity.

This modular design, combined with chemical stability, makes flow batteries one of the most versatile and promising technologies for long-duration, safe, and reliable energy storage.

Iron-Air Batteries

These batteries utilize iron and oxygen to store and release energy. They generate electricity through a reversible oxidation-reduction (redox) reaction between iron (Fe) and oxygen (O₂) from the air. When the battery is exposed to air, iron oxide (rust) forms. During the oxidation process, electrons are released, creating an electric current that can power the grid. When the battery is recharged using electricity from the grid (ideally from renewables), the iron oxide is converted back into metallic iron, releasing oxygen to the air. They offer long cycle life and are suitable for multi-day storage needs.

Pumped Hydroelectric Storage

This method stores energy by moving water between two reservoirs at different elevations. During periods of low electricity demand or excess renewable generation, electricity from the grid powers pumps that move water from a lower reservoir to an upper reservoir, converting electrical energy into gravitational potential energy. When electricity is needed during peak demand, the water is released back down through turbines, which spin and drive generators to produce electricity.

The process works on the same principles as conventional hydropower: the potential energy of the elevated water becomes kinetic energy, which is converted into mechanical energy by the turbines and then into electrical energy by the generators. While highly effective and widely deployed, pumped hydro requires suitable geography, including large elevation differences and sufficient water storage capacity.

Compressed Air Energy Storage (CAES)

CAES systems store energy by using excess electricity (ideally from renewable sources) to compress air and store it under high pressure in underground caverns, depleted natural gas reservoirs, or specially constructed tanks. When electricity is needed, the compressed air is released and expanded through a turbine, driving a generator to produce electricity. Because expanding air cools rapidly, conventional CAES systems often heat the air using natural gas or thermal energy captured during compression to maintain efficiency and power output.

Advanced variants, such as Adiabatic CAES (A-CAES), capture and store this heat for reuse during expansion, enabling nearly fuel-free operation and higher overall efficiency. While still under development, CAES holds significant promise for large-scale, long-duration energy storage.

Geochemical Energy Storage

Innovative systems like Quidnet Energy utilize pressurized water stored in underground rock formations to generate electricity upon release. During periods of excess electricity, water is injected into deep, permeable rock layers such as sandstone or fractured rock, increasing the pressure of the formation and effectively storing potential energy. When electricity is needed, the pressurized water is released back to the surface through wells, driving hydraulic turbines that convert the water’s kinetic energy into mechanical energy, which is then converted into electricity via generators.

This process is conceptually similar to pumped hydro, but instead of large surface reservoirs, it leverages the elasticity of subsurface rock formations as a natural energy storage medium. This approach leverages existing infrastructure and offers long-term storage capabilities.

Real-World Applications

Several projects worldwide are demonstrating the viability of LDES:

Hydrostor’s Advanced Compressed Air Energy Storage (A-CAES)

Hydrostor is developing several large-scale A-CAES projects:

• Goderich Energy Storage Centre (Ontario, Canada): The world’s first commercially contracted A-CAES facility, demonstrating the viability of this technology for long-duration energy storage.

• Willow Rock Energy Storage Center (California, USA): A 500 MW / 4,000 MWh facility in Kern County, California, utilizing Hydrostor’s proprietary A-CAES technology. The project has secured a conditional loan guarantee of up to $1.76 billion from the U.S. Department of Energy.

• Silver City Energy Storage Centre (Australia): A 200 MW / 1,600 MWh A-CAES facility under late-stage development in Broken Hill, New South Wales.

Limondale Battery (Australia)

This 50 MW / 400 MWh system, located in New South Wales, stores solar energy during the day and discharges it during peak evening and morning demand. It addresses the challenge of “dunkelflaute” by providing energy during extended periods of low renewable generation.

Energy Dome’s CO₂ Battery

Partnering with Google, Energy Dome is developing a CO₂-based energy storage system that compresses and liquefies carbon dioxide to store energy. This approach avoids the use of scarce materials like lithium and copper, aligning with sustainability goals.

Gravity Energy Storage Solution (GESS)

Energy Vault’s GESS lifts heavy blocks using surplus renewable energy and generates electricity when needed by lowering them. This method reduces reliance on traditional battery technologies and offers a scalable solution for energy storage.

The Path Forward

While long-duration energy storage (LDES) and battery energy storage systems (BESS) are critical components of a modern electricity system, they are ultimately constrained by the amount of energy they can store. Even the most advanced systems can supply energy for days, weeks, or, in some cases, months, but they still have finite discharge durations. For this reason, renewable assets like solar and wind will need to be backstopped by some amount of thermal generation for the foreseeable future to ensure electricity is always available to power modern life.

As I discussed in my article Forget Transition; Expansion Is the New Energy Imperative, power generation is being outpaced by demand growth. Policymakers must therefore adopt a pragmatic approach that balances the urgent need to transition to a clean energy economy with the equally critical goals of grid stability and electricity affordability in the near term.

Don’t get me wrong. I am a techno-optimist, and I truly believe in a future where electricity generation is free from emissions and other harmful environmental impacts. At the same time, I am a realist, and I recognize that achieving this future requires a balanced strategy that addresses today’s energy needs while laying the groundwork for tomorrow.

The task ahead is formidable, and success will require all of us working together to ensure the transition to a clean energy future is orderly, equitable, and resilient.