Grid-scale energy storage encompasses a diverse array of technologies that serve as critical infrastructure in modern power systems. The largest and most established is pumped hydro storage (~160 GW globally), which uses elevation differences to store energy by moving water between reservoirs. Other mechanical storage solutions include compressed air energy storage and flywheels. Electrochemical storage, primarily lithium-ion batteries (~30 GW globally), offers rapid response capabilities. Thermal storage solutions, such as molten salt systems (~3 GW), are often paired with concentrated solar power. Emerging technologies include flow batteries, advanced geotechnical pumped hydro storage using underground reservoirs, and hydrogen storage systems. Each technology plays a distinct role in grid stability, power quality maintenance, and renewable energy integration.

The current market reflects a technology mix optimized for different durations and applications. Pumped hydro dominates with approximately 80% of global storage capacity, offering the lowest cost for long-duration storage ($10-200/kWh) and high reliability with decades-long operational lifespans. Lithium-ion batteries, despite their smaller total capacity, are growing rapidly due to their versatility, declining costs ($200-600/kWh), and fast response times. Traditional pumped hydro requires suitable geography or significant civil works, while newer geotechnical solutions offer more location flexibility. The choice of technology depends heavily on specific requirements: pumped hydro excels at bulk energy shifting over hours or days, lithium-ion batteries at rapid grid services and shorter duration needs, and thermal storage at applications requiring heat integration.

For AI data centers, the optimal storage solution varies by timeframe. In the short term (seconds to hours), lithium-ion batteries are often the best fit due to their millisecond response times, compact footprint, and ability to handle the rapid load changes characteristic of AI workloads. For medium-term storage (hours to days), a hybrid approach combining lithium-ion with pumped hydro (where geographically feasible) or geotechnical pumped hydro can provide both rapid response and cost-effective bulk storage. Long-term solutions (days to seasons) favor pumped hydro due to its lower cost per kWh and proven reliability. The environmental impact varies significantly: while pumped hydro requires substantial initial construction, it has minimal ongoing material requirements compared to batteries' regular replacement needs and raw material demands. Each data center's optimal solution will depend on its location, load profile, and available grid infrastructure, but a diversified approach leveraging multiple storage technologies often provides the most robust solution.

Worth watching:

• Form Energy (USA): Developing novel iron-air batteries for ultra-low-cost multi-day storage ($20/kWh target), with a 100-hour storage pilot project with Great River Energy. Their technology uses reversible rusting of iron pellets, promising dramatically lower costs than lithium-ion for long-duration storage.
• RheEnergise (UK): Pioneering "High-Density Hydro" pumped storage using a special fluid 2.5x denser than water, enabling pumped hydro systems with smaller height differences and infrastructure. This could unlock pumped storage in many more locations than traditional systems.
• Energy Vault (Switzerland/USA): Created an innovative gravity storage system using automated cranes to stack and lower concrete blocks, effectively creating an "artificial pumped hydro" system without water. While their initial crane design faced challenges, their newer platform approach integrating multiple storage technologies has gained traction.
• Hydrostor (Canada): Developing Advanced Compressed Air Energy Storage (A-CAES) using abandoned mines or purpose-built caverns, with projects planned in California and Australia. Their technology maintains constant pressure using water displacement, achieving higher efficiency than traditional CAES.
• ESS Inc (USA): Manufactures iron flow batteries using abundant materials (iron, salt, and water), targeting long-duration storage at lower costs than lithium-ion. Their technology avoids supply chain constraints and toxic materials associated with vanadium flow batteries.

Interviews

Updating Priors w/ Peep Siitam on Grid-Scale Energy Storage (1)