Electricity storage is a key technology for electricity systems with a high share of renewables as it allows electricity to be generated when renewable sources (i.e. wind, sunlight) are available and to be consumed on demand. It is expected that the increasing price of fossil fuels and peak-load electricity and the growing share of renewables will result in electricity storage to grow rapidly and become more cost effective.

However, electricity storage is technically challenging because electricity can only be stored after conversion into other forms of energy, and this involves expensive equipment and energy losses. At present, the only commercial storage option is pumped hydro power where surplus electricity (e.g. electricity produced overnight by base-load coal or nuclear power) is used to pump water from a lower to an upper reservoir. The stored energy is then used to produce hydropower during daily high-demand periods. Pumped hydro plants are large-scale storage systems with a typical efficiency between 70% and 80%, which means that a quarter of the energy is lost in the process.

Other storage technologies with different characteristics (i.e. storage process and capacity, conversion back to electricity and response to power demand, energy losses and costs) are currently in demonstration or pre-commercial stages:

Compressed air energy storage (CAES) systems store energy by compressing air. An electric motor-driven compressor is used to pressurize the storage reservoir using off-peak energy and air is released from the reservoir through a turbine during on-peak hours to produce electrical energy. 1 m3 of cavern space can store 5 kWh of energy and minimum pressures are about 1200 psi. Ideal locations for large compressed air energy storage reservoirs are aquifers (water bearing rock formations), depleted oil and gas wells, conventional mines in hard rock, and hydraulically mined salt caverns. Facilities are sized in the range of several hundred megawatts. Air can be stored in pressurized tanks for small systems

Flywheels store electricity as mechanical energy, which is then converted back to electricity.

Electrical batteries and vanadium redox flow cells store electricity as chemical energy. In particular, traditional lead-acid batteries offer low costs but short-lifetimes; Li-ion batteries offer higher efficiency and lifetime and are widely used for portable devices, but they require further R&D and cost reduction for application to solar and wind plants; novel battery concepts (e.g. NaS batteries) and vanadium redox flow cells have already been used in small- to mid-size renewable power systems.

Supercapacitors store electricity as electrostatic energy and are often combined with batteries.

Superconducting magnetic storage use superconducting technology to store electricity efficiently but need more research to be developed.

Thermal energy storage is under demonstration in concentrating solar power (CSP) plants where excess daily solar heat is stored and used to generate electricity at sunset.

No single electricity storage technology scores high in all dimensions. The technology of choice often depends on the size of the system, the specific service, the electricity sources and the marginal cost of peak electricity. Pumped hydro currently accounts for 95% of the global storage capacity and still offers a considerable expansion potential but does not suit residential or small-size applications.