The Fundamentals of Energy Storage Provided by Wärtsilä


What is energy storage – and how is it linked to balancing and flexibility? Wärtsilä compiled a dictionary that explains key industry terminology.

“Put simply, energy storage means capturing produced energy and saving it for later, for example in our lithium-ion battery systems, which are very comparable to the batteries in cell phones – just much larger,” explains Kate Sherwood, Energy Business Director, Energy Storage at Wärtsilä North America.

“An energy storage system consists of hardware – such as battery cells, cooling and fire suppression systems, containers, and inverters or power conditioners – as well as highly developed software, and of course the wider energy ecosystem it operates in,” Sherwood adds.

If you want to find explanations for specific terms that are linked to energy storage – like ancillary services or black start capacity – check out our energy storage dictionary further down in the article here.

But if you first want to learn why energy storage is stirring so much interest globally, keep on reading.

A key prerequisite for a 100% renewable energy future

“There is escalating interest in energy storage all around the world. It is primarily due to the rise of renewable energy,” Sherwood says.

In many countries, renewable energy sources such as solar and wind power are now the cheapest and fastest-growing ways to produce electricity. Renewable energy sources are also the most sustainable option – solar panels and wind turbines produce no local emissions or pollutants.

“However, we live in a 24/7 world where we want to have electricity all the time, and renewable energy sources are inherently intermittent. They don’t produce a continuous stream of energy round-the-clock because the sun sets every evening and there are calm, windless days,” Sherwood describes.

“This is why we need energy storage systems. They allow us to store renewable energy when it is readily available – when the sun shines and the wind blows. Energy storage is a critical component to the adoption and advancement of renewable energy sources around the world,” Sherwood continues.

When you have both your energy storage and balancing power honed to perfection, you achieve an optimised and flexible power system.

– Kate Sherwood

Energy storage + balancing power = flexibility

Electrical grid operators need to always have various sources of energy available, so they can immediately compensate if another energy source is unavailable.

“Balancing power refers to the ability to have electrical energy capacity available at the exact time when it is needed. Wärtsilä has a portfolio of solutions optimised for balancing renewable power generation, for example engine power plants, for quick ramp-up and ramp-down, that run on sustainable fuels, and our energy management software platform, GEMS,” Sherwood remarks.

People sometimes confuse balancing with flexibility. This is understandable, as they are interlinked.

“In essence, when you have both your energy storage and balancing power honed to perfection, you achieve an optimised and flexible power system– and flexibility is vital in order to make the move to 100% renewable energy sources,” Sherwood emphasises.

Energy storage is affordable

Having worked in the energy storage industry for more than 15 years, Sherwood is no stranger to misunderstandings about energy storage. One of the most persistent misconceptions is that energy storage is very expensive.

“Historically, it used to be. But this is no longer true. Technological advancements in the past decade have made energy storage affordable. Moreover, energy storage allows electrical systems to run considerably more efficiently, which translates to lower prices, less emissions and more reliable power,” Sherwood points out.

Now you know why energy storage is creating such a buzz around the world. If you wish to test your energy storage vocabulary and maybe even learn some new terminology, check out our energy storage dictionary:


Energy Storage Dictionary

AC coupling

To understand AC coupling, you first must know what AC and DC stand for. Alternating current (AC) is an electric current that periodically reverses direction and changes its magnitude continuously with time. Direct current (DC), on the other hand, flows only in one direction.

AC coupling is the ability to pair an electrical generating source – for example solar panels or windmills – to an energy storage system, with alternating current (AC).

Ancillary Services

Ancillary services are all the support functions beyond capacity that are needed to help grid operators maintain a reliable electricity system, meet demand, and remain stable. For example, ancillary services sustain a proper flow and direction of electricity, and address imbalances between supply and demand.

Available Capacity

Available capacity refers to the total battery capacity – usually expressed in kilowatt-hours. The actual capacity of a particular battery is determined by several factors, including temperature, method of charge and the age and life history of the battery.

Backup Supply (Supplemental reserve)

Reserve capacity is necessary for operating an electric grid. Backup supply – also known as supplemental reserve – means power from, for example, battery energy storage that can pick up load within a set period of time – often one hour or less. Its role is to act as a backup for other reserve capacity.

Black Start Capacity

Black start capacity refers to the ability to immediately replace energy generation sources that are offline for any reason, such as extreme weather or planned or un-planned plant maintenance. Energy storage is an excellent choice for black start capacity, because batteries are fast acting and they can provide capacity or energy in a fraction of a second.

Direct Current (DC)

Direct current is electrical current that flows consistently in one direction. Most digital electronics use DC power sources. DC is used for example to start the engine of a vehicle, to charge mobile batteries, and for emergency lighting and security cameras in domestic and commercial buildings.

Energy Arbitrage

Energy arbitrage refers to buying electricity when the demand (and price) is low, storing that electricity, and then selling it back during periods of high or “peak” pricing.

Energy Density

Energy density explains how much energy a battery contains in proportion to its weight. Energy density is typically presented in watt-hours per kilogram (Wh/kg), watt-hours per pound, or watt-hours per cubic inch.

The energy density of Lithium-ion batteries typically ranges between 50-260 Wh/kg.

Energy density is often confused with power density, but they are not the same thing. Power density is the measure of how quickly the energy can be delivered, while energy density tells you how much stored energy is available.

Energy Management System (EMS)

Energy management systems are automation systems that collect energy data from the project site, and direct the battery energy storage to store or dispatch (discharge or empty) energy, thus enabling the efficient management of energy resources. Wärtsilä’s energy management system, the GEMS Digital Energy Platform, is a sophisticated software platform. Using machine learning and historic and real-time data analytics, GEMS enables customers to remotely monitor, operate, identify, and diagnose equipment, and automate decision making to ensure that the energy system performance is always optimised, regardless of how many renewable and traditional energy assets GEMS combines.

Frequency Regulation

Frequency regulation refers to balancing short-term mismatches in supply and demand, to maintain a smooth and reliable power flow from the grid. Maintaining the frequency of the electricity on the grid is essential to ensure overall grid/system reliability. If system frequency becomes too high or low, it can lead to blackouts or other grid failures.

Front-of-the-metre (FTM)

All grid-tied energy systems are situated either front-of-the-metre (FTM) or behind-the-metre (BTM). The difference between FTM and BTM is the energy system’s position in relation to the energy user’s electric metre. Any energy generation or storage source that is interconnected to the electric grid without an associated load behind the same electric meter (for example a home or business) is referred to as a front-of-metre system.

Grid-forming capability

Grid-forming refers an energy source’s capability to restart a grid independently.

Traditionally, grid operators have had to first turn to conventional energy sources like natural gas to restart a grid after a blackout. Emerging technologies such as grid-forming inverters enable solar and other inverter-based energy sources to restart the grid independently.

If you want to learn more about renewables and grid-forming capability, check out these examples of Wärtsilä projects AGL and Wärtsilä advance frame agreement with first energy storage project on path to grid decarbonisation and Australia’s AGL to deploy first grid-scale battery system with Wärtsilä.

Photovoltaic system (PV system)

A photovoltaic system – also known as a PV system, or solar power system – is a power system that converts solar energy into direct current electricity by means of photovoltaics. A photovoltaic system’s main components are solar panels, inverters that convert the electricity from DC to AC, and smaller pieces of equipment together called Balance of Plant (“BoP”). Photovoltaic systems come in all sizes from small rooftop systems to expansive utility-scale generation plants covering thousands of acres of land.

Ramp Rate

Because solar and wind generation can change within minutes, electric grid operators rely on power plants that can provide additional load (or curtail load) on the same timescale as variations in renewable output. The increase or reduction in output per minute in spinning mode is called the ramp rate and is usually expressed either as % per minute or MW per minute.

Rated Capacity

Rated capacity usually refers to the capacity, in kilowatt-hours*, that a battery can deliver under specific conditions (rate of discharge, end voltage, temperature). Typically, this rating is provided by the manufacturer.

Rated capacity can also be used to describe the capacity of the individual cells that the battery is made up of.

*Kilowatt-hours are often abbreviated as kWh.

Spinning reserve

Spinning reserve is the extra generating capacity that is available by increasing the power output of engine generators that are already connected to the power system and available to provide capacity very quickly. Spinning reserve can respond within 10 minutes (sometimes even a few seconds) to compensate for other generation or transmission outages on the same electric grid or portion (“node”) on an electric grid.

Thermal Runaway

Thermal runaway is a phenomenon that can occur in batteries when the heat generated within a battery exceeds the amount of heat that is dissipated to its surroundings. In some cases, thermal runaway can lead to fire or explosion. Safety standards are in place across the industry to mitigate the risk of thermal runaway. Wärtsilä takes a robust approach to reducing the risk of thermal runaway in our energy storage systems, with both proactive and reactive measures as standard features to help ensure the lowest risk possible.


Reference: written by Joanna Sinclair,

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