Energy Storage & Batteries

Executive Summary

As the move is made to a net zero world and the electrification of industry rolls ahead, power management will become critical to ensure better business continuity. Businesses will need to have ever improving control of their energy use, as well as taking advantage of generating their own sustainable energy, eg though solar and considering battery energy storage systems to provide further resilience to energy demand and price spikes.  This is particularly true in the UK where energy costs are high vs many competitors and renewals offer the only cost efficient alternatives.

In the UK the electricity demand is expected to at least double by 2050. The power switch from fossil fuels to renewables is well underway with 2024 being the first year to supply more than 50% of energy from renewables but there are challenges while this change process takes place, most noticeably based around grid infrastructure upgrades and re-routing to manage the renewable locations.

With the transition to renewables, energy storage solutions (ESS) must be included due to their often intermittent nature of energy generation. From a business perspective for example this means when looking at installing solar panels, ESS should be considered as they can offer even more energy security and resilience. Typical use cases for business are

  • Peak Shaving: charge during off-peak periods and then use at peak periods to manage costs

  • Demand Response: if short term demand exceeds agreed capacity the energy storage system can be used to meet this gap

  • Back-up Power: UPS, provide uninterrupted power during power cuts (must be set up to facilitate this)

  • On-Site Generation: allows more of the power being generated on site to be used on site providing better efficiency for the investment

There are several types of ESS in use, with lithium batteries, especially LFP, being the preferred option for on-site solar generation.

LFP (lithium based) batteries give a good balance between efficiency, size and toxicity.

Lithium extraction has been cited as having some problems from a sustainability perspective. There are options with more control when extracted to make the this more sustainable, but a key change is to ensure all lithium batteries in use are collected and fully recycled so that the lithium can be used again. By recycling current lithium batteries there is a significant reduction in the environmental impact. There are some more interesting technologies being developed which can help remove our reliance on lithium eg sodium ion which are starting to come to market.

The introduction in 2027 in the EU of battery passports will be interesting to see how this impact the ownership and detail of the earlier parts of the supply chain. Hopefully it will also help enable more easy recycling and reuse of the batteries.

Overall as businesses take more control of their energy strategy due to the increased demand on electricity, there is a definite advantage to generate their own power to increase resilience to market demands and pricing. As part of this investment the consideration for the use of batteries for energy storage and increased energy stability is recommended.

Background

The demand on electricity is going to explode over the next decade as we move to a decarbonised world, with estimates from the UK‘s Climate Change Committee showing it increasing from current levels of around 300TWh to 360TWh in 2050, then up to the range of 550 -680TWh, so over doubling in 25 years. 85% of this increase is driven by the electrification of building and transport. This is often called the electrification of industry or sometimes the electrotech revolution.

However there are still aspects which need to change.

  • Infrastructure upgrades and re-routing: The UK grid is not designed for either the electricity to be generated in these places (where renewals are situated) nor the level of electricity required. There are big infra-structure projects in place but they will take time to complete

  • Distribution Network Operator:  DNO approvals are overwhelmed due to the increased need and new processes for approval are being discussed

  • Variable Power Generation: Renewables are often intermittent so this energy needs to be stored to be used for future demand and where the energy storage systems  (ESS) come into consideration

Electricity (management and supply) will be key to the efficient running of businesses. At Breathe we believe that cost of electricity in the UK has been a critical part reason behind GDP growth over the last decades, so what does that mean for pricing if demand increases? For the UK moving to renewals is critical to manage the price and demand as the traditional fossil fuels are becoming more expensive to access. The UK is well on its way to doing this and 2024 was the first year that annual more electricity was generated from renewables (54%, 103TWh) than fossil fuels – see graph below from Ember Energy showing the impressive trend. Low carbon renewables includes wind, solar, hydro power.

At Breathe we believe that a modern business has a sustainable energy strategy and is crucial for future growth. This is particularly true in the UK where energy costs are high vs many competitors and renewals offer the only cost efficient alternatives. This means managing energy use: everything from looking at the buildings, the machines they use, the processes they have and how they manage waste. The other half of this is energy supply/cost, and where businesses can take more ownership of this – ie generate their own power - it will help them have more resilience in the future mitigating the high prices and volatility of electricity supply.  Taking Breathe’s analysis of commercial solar opportunity in the UK, it could deliver 190 TWh/year, equivalent to 65% of the UK’s entire 2024 electricity demand and four times more than the UK solar capacity target for 2030.

Once these rooftop solar arrays are in place, they offer free electricity to the business and furthermore supply power close to where it’s consumed, cutting transmission losses by 6 to 8%, easing peak demand. Current grid electricity carbon intensity (2025) is about 180 gCO₂/kWh, which means for every MW produced via solar there is a CO2 saving of 180 tonnes.  In addition, coupled with storage or flexible loads, rooftop systems can support local load balancing and resilience – this where electric storage systems need to be included in the options.

When and What Sort of Energy Storage Systems?

There are several types of storage used to store energy and the use case will determine the most suitable. The main types of energy storage seen in the UK are

  • Pumped Hydro Storage (PHS): This mature technology involves moving water between upper and lower reservoirs to store and release energy, helping balance electricity supply and demand. This is really only suitable for grid storage and where you have the topography to support. The UK has four operational PHS plants (Dinorwig, Foyers, Ffestiniog, and Cruachan), and several projects will expand capacity from 2.8 GW to over 7 GW in the coming years.

  • Battery Energy Storage Systems (BESS): Batteries—especially lithium-ion—are critical for supporting variable renewable energy and have seen rapid growth in recent years. To support the grid there are over 5 GW operational UK battery capacity and a very large project pipeline, with sites like Tilbury and Thurrock already connected. Batteries smooth grid imbalances and support renewables integration. They are also very variable in capacity and are the first point of call for solar arrays on individual buildings.

  • Thermal Energy Storage: Heat storage in materials like hot water or molten salt helps balance energy for heating, district heating, or industrial use. In the UK, most thermal storage is deployed at small or local scale.

  • Compressed Air Energy Storage (CAES): Excess electricity compresses and stores air underground for later use. While not yet widely adopted in the UK, CAES offers potential for scalable, lower-carbon storage.

  • Flywheel Storage: Rotational kinetic energy is stored in fast-spinning wheels for short duration, rapid-response grid balancing. Flywheels are typically used for frequency control rather than bulk energy storage.

  • Chemical Storage (Hydrogen, Power-to-Gas): Electrical energy is converted to hydrogen for storage and reconversion; this sector is emerging, with pilot and demonstration projects underway to enable longer-duration, large-scale solutions.

For commercial projects the most likely avenue to investigate further is battery storage, as this provides the most flexibility and ease of use. There are however many different types of battery available. The main aspect to consider is the use case as this will help inform the decision:

  • Peak Shaving: charge during off-peak periods and then use at peak periods to manage costs

  • Demand Response: if short term demand exceeds agreed capacity the energy storage system can be used to meet this gap

  • Back-up Power: UPS, provide uninterrupted power during power cuts (must be set up to facilitate this)

  • On-Site Generation: allows more of the power being generated on site to be used on site providing better efficiency for the investment

  • Frequency Regulation: system can quickly charge or discharge power as needed to balance the supply and demand, helping to maintain the grid's frequency within acceptable limits

  • Voltage Regulation: system helps to adjust voltage levels, ensuring they remain within acceptable limits

When choosing the battery there are several things which need to be worked through, this is where Breathe can provide support and guidance.

  • Define need, for additional energy saving, energy security or both

  • Understand in detail current and future needs

  • Futureproof, plan for further expansion and changes to use case

Battery storage systems are a significant investment and it is important to buy not what you need for individual use case and not necessarily the biggest or to match 100% of the peak usage.

Battery Types Available

Classic batteries store energy as chemical energy which is then converted to electricity to power a device. When thinking about batteries are there are several properties which need to be considered which will have different answers depending on the use case

  • Density of the storage: which indicates how big a battery needs to be

  • Shelf life of the battery: how long before the battery discharges itself

  • Life cycle of the battery: how many cycles of charge / discharge will the battery last

  • Charge speed: how long does it take to re-charge

  • Temperature stability: the range it will function in

  • Safety of the battery: some set ups are more liable to catching on fire (thermal runway) or leakage of the components

  • Source of raw materials to make the components: how abundant will impact cost, how they are extracted will inform the environmental impact

  • Recyclability of the battery: can the components be recovered to be used in new batteries

This table shows an overview of the batteries available. Currently LFP (lithium based) batteries are the preferred for solar storage, giving a good balance between efficiency, size and toxicity.  For a more detailed review see this article on battery types.

Batteries are an area of focussed development so expect this to change as improvements are seen. There are also some more fundamental changes to battery setup with flow batteries using external electrolyte tanks or solid state batteries being developed which will give more choice for certain use cases.

Sustainability of Batteries

One of the challenges that is levied against batteries is how environmentally friendly are they, many of the batteries contain rare earth metals which are often difficult to mine or extract from the earth. Then at the end of live the materials can be very toxic or difficult to dispose of, this is especially true for nickel and cadmium. The sustainability of lithium production is also discussed, especially now over 90% of lithium extraction is for battery use.

Firstly it needs to be considered where lithium is found and extracted. Lithium is in solution in deep rock formations and in some hard rock minerals. There are three main types of lithium extraction or which 66% is brine extraction

  • Traditional evaporation ponds: using the brine, takes up space and the biggest risk is leakage from the ponds into the surrounds. It also has a relatively low yield

  • Direct Lithium Extraction (DLE) and other newer brine extraction methods: This is produces a higher yield and less environmental contamination but do require much more water and energy than traditional methods

  • Hard rock mining and extraction: this is is higher energy as once mined the lithium must be extracted. It presents the normal concerns about soil degradation and habitat loss due to mining

The challenges also lie in the social and ethical costs for mining where lithium is found. These are human factors which need to be altered with the right incentives. There are many untapped reserves of lithium, especially in South America and it is imperative that this increased extraction should not choose speed over maintaining the ecosystems in these locations.

Recycling of lithium batteries should be a focus of battery use and would dramatically improve the sustainability of lithium batteries, both from an ethical and emissions perspective, estimates of up to 81% reduction in green house gases and up to 89% energy avoidance have been stated by Standford university.

Overall if you look at the impact of sourcing lithium, the CO2 cost is still dwarfed by the saving of CO2 by using a EV vehicle: per 1kg of lithium mined 15kg of CO2 is emitted, vs driving 100km in a petrol car where already 22kg CO2 is produced, so based on an average EV needing 13kg of lithium, once driven 900km CO2 emissions are being saved. Lithium’s properties make it a very efficient battery material, so it means we are using less than others. It should be possible to start to ensure that virgin lithium is sourced in a more sustainable fashion, ensuring that land is not polluted and vegetation/ wildlife is maintained.

The real focus should be on ensuring that batteries are used for as long as possible, through ideas like EV batteries becoming energy storage, and then are fully recycled to enable all the components to be re-used in new batteries. Recycling technology is also advancing along with the batteries, again particularly led by Chine.

Battery passports are planned to be introduced in the EU in 2027, which will help show the full supply chain of batteries so the environmental impact can be monitored. Each battery will have a unique ID shown via a QR code. The manufacturer / importer will then have to ensure data about the battery is documented against the ID

  • Unique Battery ID: Serial number, manufacturer name, production location, date, type, and model.

  • Material Composition: Full chemistry, list of critical raw materials, recycled content percentages, and country of origin for materials.

  • Carbon Footprint: Total emissions from cradle to gate, specific manufacturing batch, calculation method, and carbon class.

  • Performance & Safety: Initial and current capacity, state of health (SOH), charge cycles, usage records, lifespan estimates, and safety instructions.

  • Repair and Reuse Records: Documentation of repairs, replacements, refurbishments, and potential for reuse or repurposing.

  • End-of-Life & Recycling Data: Disassembly and recycling instructions, materials recovery stats, and final outcomes if already recycled.

  • Supply Chain Due Diligence: Evidence of safe material sourcing, mitigation of social/environmental risks, and supply chain transparency measures.

  • Conformity and Compliance: Safety declarations, confirmation of compliance, and conformity assessments by notified bodies.

  • Manufacturer and Distributor Details: Names, addresses, and party responsible for passport data accuracy

It will be interesting to see how the non-european manufacturers start to implement these documentation requirements at the expected standards. Furthermore the responsibility needs to also be on the end manufacturers and consumers to put more pressure on lithium mining businesses for this to be done in a safe and sustainable fashion.

Conclusion

Overall it can be seen that

  • Electrification of industry is coming, electric power strikes a good balance between efficiency and environmental impact, as there are many ways to generate carbon neutrally

  • There is a clear business and environmental advantage use energy immediately at source as it mitigates losses and leaves business in more control of their power, mitigating against fluctuation in price and demand/availability

  • Batteries offer an excellent way of storing energy for additional business resilience and there are several types available. However there must be consideration about how the components are sourced and the full battery lifecycle ending with disposal which recovers the components for re-use in new batteries