Energy storage technology has great potential to improve electric power grids, to enable growth in renewable electricity generation, and to provide alternatives to oil-derived fuels in the nation's transportation sector. In the electric power system, the promise of this technology lies in its potential to increase grid efficiency and reliability—optimizing power flows and supporting variable power supplies from wind and solar generation. In transportation, vehicles powered by batteries or other electric technologies have the potential to displace vehicles burning gasoline and diesel fuel, reducing associated emissions and demand for oil. In recent years, federal policy makers have become increasingly interested in promoting energy storage technology as a key enabler of broad electric power and transportation sector objectives. In remarks about the STORAGE Act of 2011 ( S. 1845 ), which would provide investment tax credits for storage systems connected to the electric grid, businesses and homes, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman remarked, Deployment of storage technologies will make our nation's electricity grid more reliable while also enabling more efficient use of existing energy sources as well as new ones, such as wind and solar.... These technologies have the potential to cut electricity bills, reduce peak power demand and lower greenhouse gas emissions. Likewise, in a statement regarding new energy storage-related rules for wholesale electricity markets, Federal Energy Regulatory Commissioner John Norris stated, I believe today's final rule is a positive first step by the Commission in recognizing the unique characteristics and the value that storage resources offer.... As we move forward, I strongly believe that storage will become ever more critical as we look to integrate increasing amounts of variable energy resources. Referring to advanced batteries for electric transportation applications, Secretary of Energy Steven Chu reportedly stated, It's now within grasp, that you can get a battery where the business plans are one-third of the cost of today's batteries, where you can get ranges now that would allow cars instead of 100 miles on a single charge, go 300 or more miles on the same charge…. It's not a pipe dream 30 years from today or 20 years from today. It's in the next decade. Statements such as those above highlight not only the technical opportunities for energy storage in the grid and in electric transportation, but also the attention being paid to energy storage technologies at the highest levels in the federal government. Nonetheless, many new energy storage technologies continue to face significant technological and economic challenges to their commercialization and widespread deployment. The recent bankruptcy of Beacon Power, one of the leading developers of flywheel energy storage technologies for the grid, is a prominent illustration of commercial barriers to grid storage technology. Public concerns about elevated fire risks from Chevrolet Volt electric car batteries, although shown to be exaggerated, are another. By contrast, increasing investments by AES Corporation in utility-scale battery storage for power grids show continuing successful efforts to overcome technical challenges and market barriers to bring new storage technologies into the market. Understanding the potential of energy storage in electric applications is complicated by a number of factors. The first is the wide range of storage technologies either commercially available, in development, or being researched. Because they are technologically diverse, it is difficult to gain a balanced understanding of the fundamental capabilities, costs, and comparative advantages of these different energy storage options. Second, there are multiple applications of energy storage, each with distinct operational requirements. Certain storage technologies may suit certain applications better than others. Finally, there are many aspects of market structure and economic regulation that affect energy storage deployment. Taken together, these factors make the development of an energy storage research and development portfolio challenging. While there is general consensus that storage technology improvements are needed, there are multiple potential pathways to such improvements that cut across different disciplines. This report attempts to summarize the current state of knowledge regarding energy storage technologies for both electric power grid and electric vehicle applications. It is intended to serve as a reference for policymakers interested in understanding the range of technologies and applications associated with energy storage, comparing them, when possible, in a structured way to highlight key characteristics relevant to widespread use. The report also discusses how aspects of policy and market structure affect competition among both mature and emerging technologies. The report contains 13 chapters, starting with an Executive Summary, which provides an overview of the report's main findings. Context and background are provided in " Chapter 2: Background and Scope " and " Chapter 3: Overview of Storage Technology Applications and Benefits ." In particular, Chapter 3 provides an overview of electricity storage applications and value, including their use to enable renewable electricity; current barriers to deployment; and current initiatives to address technical, economic and market barriers. Chapters 4-13 discuss the individual storage technologies. Each chapter can be read independently, but Chapters 2 and 3 offer the reader a more complete understanding of some of the more technologically focused discussions in the subsequent chapters. CRS has written two previous reports on electricity storage: CRS Report R40797, Electric Power Storage , by [author name scrubbed], and CRS Report R41709, Battery Manufacturing for Hybrid and Electric Vehicles: Policy Issues , by [author name scrubbed]. This technology assessment and report was prepared by the National Renewable Energy Laboratory (NREL), Strategic Energy Analysis Center, with contributions from Paul Denholm, Anne Dillon, Easan Drury, Greg Glatzmaier, [author name scrubbed], Marc Melaina, Jeremy Neubauer, Doug Reindl (University of Wisconsin-Madison), Shriram Santhanagopalan, Kandler Smith, Darlene Steward, and Samir Succar (Natural Resources Defense Council). The work was performed under contract to CRS as part of a multiyear CRS project to examine different aspects of U.S. energy policy. [author name scrubbed], Assistant Director, Resources, Science, and Industry Division, served as the CRS project coordinator. [author name scrubbed], Specialist in Energy and Infrastructure Policy, served as the CRS reviewer and editor of the final report. This report was funded, in part, by a grant from the Joyce Foundation. Energy storage in electric applications can provide two significant benefits to the nation's energy system. First, it can improve the technical and economic performance of the electric power grid, increasing reliability and potentially decreasing costs while allowing greater penetration of intermittent sources like solar and wind generation. Second, it enables a potential transition from an oil-based transportation system to one based on an array of domestically sourced electricity options, greatly reducing dependence on petroleum. In both cases, a reduction in the burning of fossil fuels could result in lower overall U.S. carbon emissions and conventional pollutants. For purposes of assessment and comparison, it is helpful to organize the various energy storage technologies under two industry sectors (electric grid and transportation) and two general categories of application based on the amount of time the storage device is required to provide service (high power/rapid discharge and energy management), further explained below. Table 1 lists the storage technologies considered in this report according to these categories. The report provides an overview of the current capabilities and costs of each storage technology, including the potential for technical and cost improvement. It also discusses non-technical barriers including environmental, material, market, and policy challenges to widespread deployment. It is possible to divide grid storage applications into two broad categories based on the length of time a storage device needs to provide service: (1) high power applications where the device must respond rapidly and be able to discharge for only short-term periods (up to about one hour), and (2) energy management related applications where the device may respond more slowly but must be able to discharge for several hours or more. Ideally, all storage devices would be able to provide all services, but some technologies are technically restricted to provide only short-term services. However, many of these services have very high value in the grid, so short-term storage can still provide considerable benefits. The rapid response category can be further divided into short-term discharge—less than one minute—used to provide grid stability and power quality, and longer-term discharge—up to about an hour. Though important, short-term discharge services can often be provided by non-storage options such as power electronics. Furthermore, this class of grid services does not address the primary challenge of renewables integration, which requires minutes to hours of discharge time. Currently, capacitors and superconducting magnetic energy storage (SMES) are rapid response technologies capable only of providing short-term discharge. Research efforts for both technologies are focused on increasing energy density and decreasing cost, with capacitor efforts being directed in part towards vehicle applications. While SMES research has been active historically, current efforts are modest and there is no clearly defined pathway for SMES to be competitive for applications requiring extended discharge. Other grid applications require devices with up to about one hour of discharge to provide services such as frequency regulation service (responding to random, rapid variations in demand) and contingency reserves (rapidly responding to a generator or transmission failure). Longer-term storage can also support renewables integration by providing the subhourly ramping requirements which will increase as greater amounts of variable generation sources are added to the grid. Flywheels have been deployed in significant demonstration projects providing frequency regulation. Several battery types have been demonstrated for both frequency regulation and operating reserves, including lithium-ion and various aqueous batteries (such as lead-acid, nickel-cadmium, and nickel-metal hydride). Most aqueous chemistries are considered mature technologies, but additional improvements are possible, even for 100+ year-old lead acid batteries. Research and development efforts on lithium-ion batteries are focused on reducing cost and weight for transportation applications, but these efforts should have spillover benefits to grid applications. In addition, there are certain lithium-ion configurations that are probably unsuitable for transportation applications but potentially suitable for the grid. A major effort by commercial vendors of rapid response technologies such as flywheels and lithium-ion batteries has been gaining access to markets for frequency regulation and full valuation of the response capabilities of the technology.