Energy Storage Systems: Scope, Technologies, Characteristics, Progress, Challenges, and Future Suggestions—Renewable Energy Community Perspectives

Abstract

A paradigm transition from centralized to decentralized energy systems has occurred, which has increased the deployment of renewable energy sources (RESs) in renewable energy communities (RECs), promoting energy independence, strengthening local resilience, increasing self-sufficiency, and moving toward CO₂ emission reduction. However, the erratic and unpredictable generation of RESs like wind, solar, and other sources make these systems necessary, and a lot of interest in energy storage systems is increasing because they have rapidly become the cornerstone of modern energy infrastructure, and there is a trend towards using more RESs and decentralization, resulting in increased self-sufficiency. Additionally, ESS is increasingly being installed at or close to the point of energy generation and consumption, like within residences, buildings, or community microgrids, instead of at centralized utility-scale facilities, referred to be decentralized. By storing and using energy in the same location, this localized deployment reduces transmission losses, facilitates quicker response to changes in demand, and promotes local autonomy in energy management. Since the production of renewable energy is naturally spread, decentralizing storage is crucial to optimizing efficiency and dependability. This article also focuses on energy storage systems, highlighting the role and scope of ESSs along with the services of ESSs in different parts of the power system network, particularly in renewable energy communities (RECs). The classification of various ESS technologies and their key features, limitations, and applications is discussed following the current technological and significant information trends and discussing the ESS types for the RECs with different options as per the capacity, like small, medium, and large scale. It covers the overall scenario and progress, like overall European ESS installed capacity, and the work relevant to ESSs in RECs with different aspects, following the literature review. Additionally, it draws attention to the gaps and significant challenges related to ESS technologies and their deployment. Key future suggestions have also been given as per the current trends of technological information and significant information that may affect those trends globally in the future and would be helpful in the growth of ESSs integration in RECs. The authors also suggest the role of the government, stakeholders, and supportive policies that can aid in the implementation of ESS technologies in RECs.

1. Introduction

1.1. Background Study

Recently, modern socio-economic factors, such as the production of electricity free of CO₂ and the reduction in fossil fuel reserves, have led to the increase in renewable energy sources (RESs) [1,2]. However, in some countries that have high potential for these RESs, they could be more utilized than fossil fuel-based energy resources, resulting in the promotion of their integration into transmission and distribution networks [3,4,5]. This integration of RESs within the grid is as familiar as the decentralized energy system [6,7]. In rural and isolated areas where grid connectivity is inadequate or nonexistent and traditional fuels are either prohibitively expensive or logistically challenging to obtain, decentralized RESs are becoming more acknowledged as viable alternatives [8]. Decentralized energy systems are emerging and diverse fields that might spur innovation to give individuals more control and encourage locality and community engagement [9,10]. Consequently, microgrids (MGs) and renewable energy communities (ECs), and other decentralized energy systems have emerged as cooperative approaches that enable the RESs generation within decentralized energy systems [11,12]. With the inclusion in the Clean Energy Package, the 2018/2001 RED II introduced the concept of renewable energy communities (RECs) and its establishment focusing on the use of RESs having the primary aim of delivering the benefits, like economic, environmental, and social, to their members [13]. Comparing the RECs and MGs, they both are considered decentralized energy systems, having the goal of integrating RESs, improving local energy autonomy, and boosting energy sustainability and resilience. They prioritize the production, use, and control of power locally, frequently depending on demand-side flexibility, solar PV, wind, and ESSs. In terms of functionality, technical design, and control aspects, RECs are neighborhood-based projects centered on the sharing of renewable energy and providing socioeconomic advantages, while MGs are more technically advanced systems designed for resilience and autonomous operation [14]. RECs focus on social and economic benefits within the energy transition, though MGs are primarily concerned with technological robustness. Apart from this, there is also an incentive difference; like in RECs, there is an incentive for sharing energy, which encourages users to be part of it [15,16,17]. This research work is focused on the decentralized energy system for the RECs because they help to reduce the high energy loads on the power grid by promoting flexible energy use by active consumers and minimizing energy consumption [18,19,20]. RECs have participants like prosumers, consumers, and producers connected with the grid, following the constraints with a power capacity of 1 MW. The generation for prosumers and producers would be from RESs. Other technologies could include EVs and ESSs. Moreover, in RECs, the participants can transition from mere consumers to prosumers who actively participate in energy selling, energy sharing, demand response plans, local RES generation, and energy efficiency initiatives [21,22].

With the quick development of the intermittent and probabilistic RESs like solar and wind, there must be an integration of ESSs in the RECs, having the optimizing and stabilizing roles [23]. ESSs in power systems and RECs have emerged as significant contributors to this discussion, and there is growing interest in ESS located on the very close load side within the RECs, resulting in increased self-consumption and the chance to share energy in case of excess [24]. These systems enable us to boost local consumption of renewable energy. As an established, well-developed, and constantly evolving technology, battery energy storage systems (BESSs) have been applied to a variety of applications like RESs, EVs, and other supplementary services [25,26,27,28].

Many researchers are engaged and eager to work on RECs like concepts and promote it [29,30], distributed energy sources like PV, Wind, ESS, and other sources, and their integration [31,32,33], energy sharing [34,35,36], design and modeling [37,38], economic and feasibility analysis include cost allocations and investment options [39,40], policies and policymakers [41,42], challenges [43,44], business models [45], community interest and consumer habits [46], and social acceptance [38], consumer and prosumer role [47,48], self-consumption [49] and many others [50,51,52]. All the topics are covered individually in different regular articles or review articles, and it is difficult to find a review article relevant to ESSs in RECs. This paper provides a comprehensive review of energy storage systems, highlighting the role and scope of ESSs in different parts of the power system network, particularly in RECs. The classification of various ESS technologies and their key features, limitations, and applications is discussed following the current technological and significant information trends. Effective ESSs are vital given the growing integration of RESs into contemporary power systems, especially in RECs. This work has the great motivation of pressing need to support the erratic and intermittent nature of RES generation to guarantee a dependable, steady, and effective energy supply. The main research parts that are covered in this work are the technologies currently employed in RECs for ESSs, the development and implementation of ESSs, and the obstacles that need to be overcome for adoption to be widely accepted. In addition to helping to balance supply and demand, ESSs are essential for reducing RES generating curtailment, increasing the penetration of RESs, and optimizing system efficiency. ESSs have the potential to greatly improve grid flexibility, resilience, and sustainability by storing excess RES production during times of low demand and releasing it when needed. Moreover, this research work has great importance as it is useful for scholars, decision-makers, RECs, and practitioners who want to comprehend the general situation and possible remedies in this area. Additionally, the goal of this review article is to propel the shift to sustainable and community-driven energy systems and research findings to offer insights on this emerging topic.

1.2. Contributions of Work and Paper Organizations

RECs are gaining significance, and reviewing the technological components helps to understand the fundamental building blocks of RECs, including power generation, ESSs, energy consumption, and energy sharing. Moreover, ESS devices are an essential component of the RECs. When DGs like PV and other RESs are in operation, there must be preservation of supply and demand equilibrium. Maintaining a balance between them to guarantee the stability and dependability of power networks is extremely difficult because most RESs are intermittent. Among all the possibilities, Energy storage systems seem most promising [53] and batteries have become a cost-effective solution in the current economic climate, even if their environmental impact is comparatively greater than that of alternative storage technologies [54]. These ESSs could also help maximize self-consumption and energy sharing in RECs. In summary, this article on ESSs in RECs offers a thorough summary and analysis of the state-of-the-art ESS technologies and their importance in RECs. Moreover, the primary goals are to summarize the body of existing research, pinpoint knowledge gaps, explore recent developments, explain their significance, and offer insightful commentary to the RECs research community, industry experts, and policymakers following the future suggestions. This work is organized into seven sections. Section 2 focuses on the scope, importance, and services of ESS in the power system network and the REC; Section 3 discusses the ESS classification, their key features, limitations and applications; Section 4 focuses on the progress of ESS in the RECs following the literature; Section 5 discusses the challenges of ESS that could be the result of less deployment of ESS; Section 6 discusses the overall work and the ESS types having a major role and widespread adoption and the priority for large-scale capacity and small-scale capacity under REC perspectives; and Section 7 concludes the overall work covered in this article and provide future suggestions.

2. Energy Storage Systems Scope and Services

The fundamental idea behind an ESS is to provide an energy buffer that acts as a storage bridge between production and consumption [55]. ESSs, such as batteries, could be essential components of RECs, allowing for the efficient storage of excess energy generated in peak production periods, which can be used during times of high demand or when RESs are not actively generating electricity [56]. ESS is gaining popularity because it makes RE technologies more dispatchable, manages various energy carriers, including heat, electricity, and gases, and builds a more cohesive energy system. Moreover, RECs are emerging as a desirable scale for the implementation of energy-efficient strategies, including building envelope retrofitting as well as low-carbon technologies [57]. Figure 1 depicts the electrical power system network with different parts such as generation, transmission, distribution, utilization, and the REC model.

With this network, a single house with the passive consumer, a prosumer, and the REC with prosumer, producer, and consumer is represented. The producer is a particular kind of prosumer who does not use the energy produced, and they can also change their role by utilizing its energy for their load to become the prosumer who can generate and use energy from their own generated plant for their load. The system is connected to industrial and commercial loads with the LV network. The objective behind this power system network and the REC is to highlight the importance and scope of the energy storage system at different points, as depicted with the red arrow and dotted and rectangular lines. At the HV side, the ESS is at bulk level (GWh) scale; at the MV side, like for the grid scale, it is in MWh, and for the LV side, for the passive consumers and prosumers without a community it is in kWh, and at the community level it could be in kWh and MWh. Moreover, in the case of REC, the ESS is depicted with a single prosumer and the collected ESS for the whole community. Apart from the above, the scope of ESS is illustrated in Figure 2, focusing on all the parts of the electrical network and the renewable energy community [56,58,59,60]. At every level of the power system network, energy storage systems (ESS) are essential for increasing flexibility, dependability, and efficiency.

Moreover, there are different ESS applications in the power system network as depicted in Figure 3 [61]. These applications include energy arbitrage, load owing, spinning reserve, voltage support, power quality, power reliability, black start capabilities, frequency management, peak shaving, integration of RESs, off-grid service, congestion alleviation, transmission and distribution improvement deferral, and smoothing and firming are all made possible at the generating level by ESS [62]. Moreover, discussing the sectors, the applications are in Microgrid Support, residential, industrial, and commercial, EV charging infrastructure, time shifting, grid stabilization, transportation, buildings and ECs, and energy utilities [63,64].

It helps stabilize the grid, relieves congestion, and defers infrastructure improvements in transmission. It facilitates load management, voltage control, and the integration of DERs on the distribution side. Through demand charge management, backup power, and optimizing self-consumption of RE, ESSs guarantee cost reductions for end users and enable grid independence, energy sharing, and energy balancing in ECs and MGs. Considering all this, ESS is essential for updating power systems since it promotes decarbonization, increases resilience, and offers operational flexibility. In addition, Figure 4 summarizes the possible ESS services and the necessary response times and durations for various components. It indicates which services are available based on the storage system’s location and the necessary response times (left side of the bar) and durations (right side of the bar) for each service [65]. Energy services are divided into three categories in the figure according to their operational timescales (milliseconds to days) and places of interconnection: Bx (behind-the-meter), Dx (distribution level), and Tx (transmission level). Energy resources or services that function on the customer’s side of the electricity meter are referred to as Bx. Demand-side management, battery storage, and household solar PV are a few examples. Services and resources linked at the distribution system level are referred to as Dx. This comprises distributed energy resources (DERs) that communicate with the local distribution network, such as microgrids, EV chargers, and community solar. Tx stands for energy resources and services that are interconnected at the system level of high-voltage transmission. This comprises players in the bulk energy market, grid-scale storage, and massive power plants. All these services contribute to the stability of the electrical grid by swiftly adapting to shifts in energy supply and demand and mitigating the impacts of transients, harmonics, and voltage variations [66]. The kinds of services that systems can provide are also significantly impacted by energy storage technology. Every technology, including electrochemical systems like lithium-ion batteries and mechanical systems like pumped hydroelectric storage, has distinct features, benefits, and drawbacks that make them appropriate for various grid system applications.

So, overall, ESS technologies have a vital role in the power system in all parts from generation to utilization, with various applications and purposes. Moreover, promoting localized energy production and consumption, ESSs also contribute significantly to decentralization, increasing resilience and self-sufficiency. They are crucial for integrating intermittent RESs because they can offer crucial grid functions, including load balancing, frequency regulation, peak shaving, increased self-consumption, increased self-sufficiency, and other benefits, considering the services following the service type, timescale, and interconnection point. However, robust policy support, market incentives, and active stakeholder involvement are necessary to fully realize the promise of ESSs. ESSs will remain a crucial component of the global energy transition, especially in decentralized and community-driven energy systems, given current technical developments and climate goals.

3. ESS Technologies Classification and Characteristics

Technologies that have the ability to charge energy from an outside source and release it later are known as energy storage systems. Every technology, including electrochemical systems like lithium-ion batteries and mechanical systems like pumped hydroelectric storage, has distinct features, benefits, and drawbacks that make them appropriate for various grid system applications. Mechanical energy storage (MES), thermal energy storage (TES), chemical energy storage (CES), electrochemical energy storage (CES), electrical energy storage (EES), and other types, such as hybrid energy storage, are the primary categories into which ESS technologies can be broadly divided based on (1) their interconnection (e.g., front-of-the-meter, behind-the-meter, or off-grid) and (2) the type of energy they store [67,68,69]. ESSs can be classified into three primary classes according to their response characteristics. Extended long-term ESS (from hrs. to days) is applied to align supply and demand over longer timeframes; short-term ESS (from sec to min) is used to improve power quality; and medium-term ESS (from min to hrs.) is applied to manage grid congestion and provide frequency response [70]. The classification of ESSs is also represented in Figure 5 [67,69,71,72].

3.1. Mechanical Energy Storage Systems

These ESSs convert kinetic and/or potential energy into electrical power. One of the earliest kinds of energy with numerous uses is MES. It is easily preserved for extended periods. It is easily transformed into and out of many types of energy [73]. Flywheels, compressed air energy storage (CAES), and pumped hydroelectric energy storage (PHES) are a few examples. PHES and CAES are primarily utilized for load-following applications and are usually found in very large, front-of-the-meter transmission-level installations. However, flywheels can also be utilized in behind-the-meter applications, such as continuous power delivery [74]. More details are provided in

Table 1. Characteristics of mechanical energy storage systems.

Types and Characteristics of Mechanical Energy Storage Systems
Flywheel [75,76,77,78,79]	Description and Features	In FES, rotational or kinetic energy is converted to electrical energy during the discharge phase using an electric generator, and vice versa during the charging phase. Permanent magnet machines are frequently employed for FESs. Its mass and the square of its speed determine the FES’s capacity. It has features like high energy density (0.25–424 kWh/m3), the power density of 40–2000 kW/m3, fast charging speed, long lifetime (15–20 years), lifetime cycle of 10,000–100,000, charging time in seconds, efficiency around 15–20% and energy capital cost of 200–150,000 USD/kWh.
	Limitations	Low power density, high self-discharge, high cost, and heavy maintenance workload are the main weaknesses.
	Applications (RE system/Others)	Wind parks Peak shaving and load leveling, and reducing the RES intermittencies by supplying real power to the system. Frequency regulation and backup.
Pumped Hydro energy storage system (PHES) [75,78,79,80,81]	Description and Features	One kind of large-scale ESS that stores and produces electricity using gravity and water is called PHES. The stored water is subsequently used to generate electricity to power short-term spikes or unexpected outages. It has features like high capacity (hundreds of MWh to GWh), fast response time in minutes, energy density (0.5–1.33 kWh/m3), power density of 0.01–0.12 kW/m3, efficiency of 65–87%, lifetime cycles of 10,000–60,000 cycles, charging time (minutes to hours), lifespan of 20–80 years low maintenance cost, and energy capital cost of 1–291 USD/kWh. It also has drawbacks, like the need for a huge water source and massive environmental effects.
	Limitations	Large unit size, high capital cost, and Terrain constraints are the limitations.
	Applications (RE system/Others)	Wind parks Hydroelectric
Compressed Air energy storage system (CAES) [78,79,82,83]	Description and Features	Compressed and pressured air is used by CAES to store energy. The primary CAES components are the turbine, compressor, and subterranean storage unit. This stored energy is used during peak hours after the air is compressed during off-peak hours. Compressed air is supplied into a combustion chamber during peak hours, where it combines with fuel to produce power. It has features like a lifespan of 20–40 years, fast reaction speed, lifetime cycles of up to 8000–30,000, energy density (0.40–20 kWh/m3), power density of 0.04–10 kW/m3, response time (sec-min), efficiency of 57–89%, and energy capital cost of 1.00–140 USD/kWh.
	Limitations	The limitations are low round-trip efficiency, high geographical environmental requirements, and the necessity of underground cavities.
	Applications (RE system/Others)	Wind parks Hydroelectric

for MESs.

All the types of MESs have different features, including applications and limitations. Compared to all the MESs, the scalability, nearly 0% self-discharge rate, extended longevity, and extremely low operating and maintenance expenses of PHES make it the greatest MES technology available. Despite having a lower energy density than other MES technologies, PHES stands out for its extended lifespan and scalability to very large projects, with production capacities frequently in the several MW range.

3.2. Electric Energy Storage Systems

These are short-term devices that store power in either the magnetic field of superconductors or the electric field of supercapacitors. These are mostly employed in the power industry to preserve high power quality. The details of all types of electric ESS have been discussed in

Table 2. Characteristics of electrical energy storage systems.

Types and Characteristics of Electrical Energy Storage Systems
Capacitors [80,81,85]	Description and Features	The electric capacitor is made up of two metal plates known as electrodes that are separated by a dielectric layer. One plate is charged, and the opposite sign induces the other plate. The metal electrodes’ surface is where the energy is stored. It has a high power density. It is appropriate for small-scale power applications due to the extended lift cycle and instantaneous recharging, but inappropriate for large-scale applications due to the high cost.
	Limitations	Small capacity
	Applications (RE system/Others)	Small-scale power applications No use in the RE system
Supercapacitors [73,79,86]	Description and Features	Supercapacitors have a very high output power of 50–100 kW, energy density of 1–35 kWh/m3, power density 15–4500 kW/m2, life span of 5–20 years, lifetime cycles of 10,000–1,000,000, and a significant self-discharge rate when compared to regular capacitors. It has good discharge efficiency (around 95%), fast response time in ms, high efficiency around 65–99%, and the energy capital cost of 100.00–94,000 USD/kWh.
	Limitations	It has low voltage, high self-discharge rate, and high capital cost
	Applications (RE system/Others)	Wind parks Permanent magnet synchronous generators and hybrid vehicle engine cranking applications, as they need high-output power
Superconducting magnetic energy storage (SMES) [76,87]	Description and Features	SMES are composed of a superconducting coil that has no electrical resistance and operates at temperatures close to absolute zero. The coil does not lose energy and can store electric energy as a magnetic field produced by DC flowing through it. This type of ESS has high power density, fast response, and high efficiency. Moreover, it also has high cycles of charging and discharging.
	Limitations	Its cost, self-discharge rate, and even capital cost is high.
	Applications (RE system/Others)	Wind parks
Electric vehicles (EVs) [88,89,90]	Description and Features	Electric energy is used by EVs to power their engines and electrical gadgets. GHG emissions will be drastically reduced as electric vehicles, sometimes referred to as zero-emission vehicles, gradually replace older fuel-powered vehicles. Many technologies, including SC, batteries, FC, and hybrid ESSs, can be used in electric vehicles.
	Limitations	Grid upgrades requirement Limited range, slow charging times Battery recycling issues
	Applications (RE system/Others)	Transportation and commercial use Energy and grid, V2G technology, MG storage Aerospace and Military

[74,84].

From the above details, electrical energy storage technologies such as for EVs, capacitors, supercapacitors, and SMES provide special benefits in terms of quick reaction, high power density, and system adaptability. Although each technology has a specialized use, when combined, they improve grid stability overall and facilitate the incorporation of RESs. While SMES are excellent at quick discharge and stability enhancement, capacitors and supercapacitors are better suited for power quality and short-duration support. As mobile storage units, EVs give decentralized energy management a dynamic layer. When combined, these technologies form an essential part of the changing landscape of sustainable and intelligent energy.

3.3. Electrochemical Energy Storage Systems

These use reversible chemical reactions to produce electricity. The active material’s chemical energy is transformed into electrical energy in electrochemical storage systems [91]. Energy is stored as electric current for a specific voltage and duration when this conversion process is finished by a chemical reaction. Cells are connected in series or parallel to produce the voltage and current levels [62,92,93]. The most popular and widely used commercial version of this technology is battery energy storage systems (BESS), which are used extensively at the transmission, distribution, and behind-the-meter levels. Lithium-ion (now the market leader for a wide range of applications), lead-acid, nickel-based, sodium-based, and flow batteries are among the battery technologies that are categorized according to various chemistries and technical characteristics. Since the technical properties and costs of each of these chemistries vary greatly, they are employed in a wide range of applications. There are also other types of electrochemical batteries, like sodium-based and zinc-based batteries, which have different advancements and characteristics [94,95]. Like rechargeable zinc-based batteries’ high energy density, excellent safety, and affordability make them an attractive addition to conventional energy storage technologies. However, its commercialization is significantly hampered by inherent flaws such as dendritic growth, side reactions, and andante reaction kinetics [96]. Moreover, with the resurgence of Na-ion batteries (NIBs) as a substitute for Li-based systems, the past ten years have marked the start of a post-lithium era in the energy storage industry. To create and optimize anodes, cathodes, and electrolytes for NIBs, this technology’s development has necessitated extensive materials research. Na is therefore the key to the upcoming commercial post-lithium systems due to the level of development of NIBs and the encouraging performance of more recent Na-based energy storage systems [97]. Furthermore, more types of electrochemical ESSs are also discussed, including features, limitations, and applications in detail in

Table 3. Characteristics of electrochemical energy storage systems.

Types and Characteristics of Electrochemical Energy Storage Systems
Lead-acid [74,79,98,99]	Description and Features	The most often used rechargeable battery, which consists of lead dioxide (PbO₂) as the cathode, sponge lead (Pb) as the anode, and sulfuric acid (H₂SO₄) as the electrolyte. It has a fast reaction speed, low self-discharge rate, efficiency of 63–90%, and low capital cost. The depth of discharge is 70%, the life cycle is 100–2000 cycles, and the energy capital cost of 50–1100 USD/kWh.
	Limitations	Low energy density and impact on the environment
	Applications (RE system/Others)	Wind parks, PV, UPS, and backup system Off-grid RE storage, conventional vehicles
NaS [68,74,79,100,101]	Description and Features	In this type, molten sodium (Na) acts as the anode, and molten sulfur (S) as the cathode, with a beta-alumina ceramic electrolyte that only allows sodium ions to pass. It has an energy density of 150–345 kWh/m3, power density of 1.33–50 kW/m3, low self-discharge rate, high energy efficiency (65–92%), life span of 5–20 years, response time in ms, fast reaction speed, low maintenance, and materials cost, and nontoxic materials. Moreover, the energy capital cost is 150–900 USD/kWh.
	Limitations	It has sodium corrosion issues and high internal resistance. An additional system, as it requires a high operating temperature for heating.
	Applications (RE system/Others)	Wind parks High power ESS like grid-connected applications for power quality enhancement and peak shaving.
Li-Ion [74,79,80]	Description and Features	In this type, lithium ions move from the cathode to the anode through an electrolyte during charging. While ions move back to the cathode during discharging and generate an electric current through the external circuit. It has an energy density of 94–500 kWh/m3, power density of 56.80–800 kW/m3, fast reaction speed, low self-discharge rate, a low weight, good performance, efficiency (70–100%), a charging time of 1–2 h, response time in ms, lifespan of 2–20 years, and high reliability. The depth of discharge is up to 100%, the lifetime cycle is 250–10,000 cycles, and the energy capital cost of 200–4000 USD/kWh.
	Limitations	Working temperature is required Needs overcharge protection
	Applications (RE system/Others)	Wind parks, EVs Portable electronics (laptops and cell phones)
Flow Battery [74,102,103]	Description and Features	The ESS capacity of a flow battery is increased by storing two liquid electrolytes in two dissolvable redox couples that are inside exterior tanks [88]. The electrolytes permit a limited no. of ions to travel over them and can be pumped from the tanks to the cell stack. Electricity is generated via the reduction-oxidation process of electrolyte solutions. It has a fast reaction speed. The depth of discharge is 100%, and the life cycle is >10,000 cycles.
	Limitations	Environmental issues No large-scale application experience
	Applications (RE system/Others)	Wind parks
NiCd [68,74,79]	Description and Features	It uses nickel hydroxide (NiOOH) as a cathode, cadmium (Cd) as an anode, and the electrolyte is potassium hydroxide (KOH). The anode is oxidized, and the cathode is reduced during discharge, whereas the reactions reverse during charging. These ESSs have low maintenance, relatively high efficiencies, high energy density, long cycle life, high reliability, and can work in low temperatures (−20 °C to −40 °C). It has an energy density of 15–150 kWh/m3, a power density of 37.66–141.05 kW/m3, response time in ms, efficiency of 59–90%, lifetime cycles of 300–10,000 cycles, a lifespan of 2–20 years, and the energy capital cost of 330–3500 USD/kWh.
	Limitations	Environmental impacts, such as cadmium and nickel, are toxic heavy metals
	Applications (RE system/Others)	Large RE systems, wind parks, and PV

[74].

All types of electrochemical ESS technologies, like lead-acid, NaS, Li-ion, NiCd, and flow batteries, provide a range of capabilities appropriate for different grid and RE integration requirements. Because of their high energy density and efficiency, Li-ion, and NaS ESSs are becoming more and more popular for both grid-scale and decentralized applications. For backup and short-term applications, lead-acid and NiCd ESSs are still reasonably priced, but flow batteries offer superior scalability and long-term storage. Every technology has its advantages and disadvantages regarding price, lifespan, performance, and safety. Together, they serve as the foundation for adaptable, dependable, and environmentally friendly energy storage solutions.

3.4. Thermal Energy Storage Systems

These systems operate by causing a shift in the material’s phase or by generating a temperature differential that can last for hours or even seasons. Large, front-of-the-meter installations are where they are most frequently utilized. They are usually used in conjunction with concentrated solar power (CSP) facilities and employ molten salt as a medium when utilized to store and generate electricity rather than to meet heating and cooling needs. Moreover, types of thermal ESSs are discussed, including features, limitations, and applications in

Table 4. Characteristics of thermal energy storage systems.

Types and Characteristics of Thermal Energy Storage Systems
Sensible heat storage systems (SHSS) [79,104,105]	Description and Features	By raising the medium temperature without changing its initial phase, SHSS stores heat. The specific heat capacity, the charging/discharging temperature change, and the bulk of the material all affect how much energy is stored. It is the cheapest and simplest storage system with 75–90% efficiency. It has an energy density of 25–120 kWh/m3, a lifespan of 10–20 years, response time in minutes, and energy capital cost of 0.04–50 USD/kWh.
	Limitations	It has a small energy density and high cycle efficiency, and another issue is that energy density is affected by the materials.
	Applications (RE system/Others)	Solar panels and geothermal
Latent heat storage system (LHSS) [79,105,106,107]	Description and Features	When a substance goes through a transitional phase and transitions from one form to another, thermal energy is stored as latent heat. The capacity of this ESS is four times greater than that of an SHSS, and its storage efficiency ranges from 75 to 90%. Compared to SHSS, LHSS exhibits more stable thermal behavior during charging and discharging operations. It has a high energy density. It has an energy density of 100–370 kWh/m3, a lifespan of 20–40 years, response time in minutes, and energy capital cost of 3–88.73 USD/kWh.
	Limitations	Differentiation of PCM volume per cycle and high demand for PCMs
	Applications (RE system/Others)	Solar PV panels and geothermal
Thermochemical energy storage systems (TCESS) [75,80,108]	Description and Features	This kind uses a physicochemical process rather than direct heat storage. When charging, heat is used, and when discharging, it is liberated. The physicochemical process of energy absorption and absorption is one example. Compared to SHSS and LHSS, TCESS has a larger energy capacity and can store energy for extended periods with relatively little energy loss. These ESS types have high efficiency, high energy density, long-term stable storage periods, and low energy losses.
	Limitations	Low efficiency, high manufacturing cost, and poor heat transfer performance.
	Applications (RE system/Others)	No RES use

[74].

Thermal ESSs discussed above offer economical and effective ways to balance the supply and demand for thermal energy. For short- to medium-term uses, sensible and latent heat ESSs are well-established, especially in solar thermal, heating, and cooling systems. Because of their high energy density and long-duration potential, thermochemical ESSs hold promise for both industrial and seasonal storage. By facilitating increased use of renewable thermal energy and lowering dependency on fossil fuels, these systems aid in decarbonization. All things considered, thermal storage technologies are essential for increasing flexibility and energy efficiency across industries.

3.5. Chemical Energy Storage Systems

Chemical energy storage systems can hold a sizable quantity of energy for an extended period. Atomic and molecular chemical bonds in the CES systems store energy that can be freed through electron transfer processes to directly generate electricity [76]. In the production of electricity and energy transportation systems, coal, propane, gasoline, hydrogen, diesel, ethanol, and liquefied petroleum gas (LPG) are the most frequently used chemical fuels. Because of its exceptional qualities as fuel and its capacity to store a significant quantity of electrical energy, the CES system focuses on hydrogen technology [62]. Additionally, types of chemical ESSs are elaborated, including features, limitations, and applications in

Table 5. Characteristics of chemical energy storage systems.

Types and Characteristics of Chemical Energy Storage Systems
Hydrogen energy Storage [74,78,109,110,111]	Description and Features	This technique consists of a conversion system, such as fuel cells to convert chemical energy into electrical form, an electrolyzer to convert electrical energy into hydrogen, and a reservoir to store the hydrogen that is created. An external supply of fuel is fed into fuel cells, which transform it into electrical output. This fuel may be derived directly from hydrogen, methanol, or hydrazine, or indirectly via the conversion of hydrocarbon gases, ethanol, ammonia, or natural gas into hydrogen. The generated hydrogen is compressed, liquefied, or stored. The main advantage of hydrogen is that no toxic gases are released.
	Limitations	Grid storage, EVs, industry, and aerospace
	Applications (RE system/Others)	Wind parks
Biofuels [74,112]	Description and Features	Biofuels are a sustainable, dependable, locally accessible, and environmentally benign fuel derived from RESs. Because they use a process called photosynthesis to convert sunlight into chemical energy that can be used in various ways to meet their energy needs, plants are a source of biofuels. Biofuels are liquid or gaseous fuels made from biomass by biological, thermal, or chemical processes. Gaseous fuels like hydrogen and methane, as well as liquid fuels like ethanol, methanol, and biodiesel
	Limitations	Land-use conflict and lower energy density
	Applications (RE system/Others)	Transport, power plants, and agriculture
Ammonia Storage [74,113]	Description and Features	Ammonia is a perfect chemical store for renewable energy since it is easy to store in large amounts in liquid form. The concept is that extra energy is available at night and can be used to produce ammonia, which can then be stored for later use. Large-scale hydrogen storage is costly and challenging, but ammonia is less expensive and easier to carry and store, and it can be readily broken down to produce hydrogen gas for use in fuel cells as needed.
	Limitations	There is an issue of toxicity and low efficiency.
	Applications (RE system/Others)	Energy carrier, maritime fuel, and power plants
Aluminum energy storage [74,114]	Description and Features	Being the third most prevalent element on Earth, aluminum is both cheap and plentiful. The first aluminum is made with corundum and excess electricity from renewable energy sources. Solid metal is safe to use when needed and is easily stored and transported. The aluminum first undergoes oxidation upon discharge, generating heat, hydrogen, and aluminum oxide. Energy can be produced from these by-products.
	Limitations	Corrosion and hard to recycle
	Applications (RE system/Others)	EV batteries, MGs, and backup power

[74].

Large-scale and seasonal applications can benefit from chemical ESSs like hydrogen, biofuels, ammonia, and aluminum because of their high energy density and long-term storage potential. This is particularly promising for decarbonizing difficult-to-electrify industries and facilitating sector linkage are hydrogen and ammonia. Biofuels offer a sustainable option for power generation and transportation, while aluminum-based storage is showing promise due to its recyclable nature. Long-distance energy delivery is made possible by these carriers, which also increases grid flexibility beyond the constraints of electrical storage. Chemical ESSs work together to achieve global energy system integration and profound decarbonization.

3.6. Hybrid Energy Storage Systems

The term “hybrid ESS” (HESS) describes the combination of two or more ESSs used to gain the best features in a single application while utilizing the benefits of each ESS. Not all of the features can be offered by a single ESS type [62]. Applications for HESSs include grid-tied HESS in municipal or provincial use, fuel-cell-powered electric vehicles, hybrid electric vehicles, large-scale wind and solar farms, and renewable energy supply systems that use a battery/hydrogen combination. HESS is currently one of the most actively researched topics worldwide. Different HESS combinations are supercapacitors and batteries, SMES and batteries, flywheel and batteries, compressed air and supercapacitors, and thermal energy storage and batteries [74].

From the overall comparison, all types of ESSs have different characteristics and features, with different applications. There are different important factors considered for selecting ESS, like efficiency, affordability, longevity, scalability, and for a power system network and RECs. Li-ion batteries could be the best choice among the various ESS technologies due to their high efficiency of 90–95%, fast response time, moderate to long lifespan, and small, scalable design. They are expensive initially, though, and gradually deteriorate with time. These are the best options for combining PV and EV charging within REC because of their overall performance, even with these disadvantages. However, these drawbacks can be overcome if a supportive and friendly policy from the government and stakeholders can be introduced and implemented.

4. Progress

RECs provide many attractive advantages, like the potential to minimize economic costs for services and infrastructure, assist in the fight against climate change, and cut energy prices through energy sharing through the use of RES technologies [115,116,117,118,119]. ESSs are essential components of RECs and are expected to positively impact the energy shift while assisting citizens and residents’ requirements and opportunities [85]. They make it possible to effectively store extra energy produced during periods of peak output, which may then be used during periods of high demand or when RES is not actively generating electricity [56]. Supporting greater production of RE, energy efficiency, and energy security all depend on ESS for use later, when and where it is most required. System flexibility is especially necessary in the EU’s electrical system, where the proportion of RE is predicted to reach roughly 69% by 2030 and 80% by 2050. In March 2023, a Commission Recommendation on Energy Storage (C/2023/1729) was approved. It tackles the most crucial problems influencing the wider use of energy storage. By implementing the EU electricity regulatory framework and removing obstacles, such as preventing double taxation and promoting efficient permitting processes, EU nations should consider the dual “consumer–producer” role of storage [120]. Discussing the world energy market,

Table 6. ESS technologies with capacity as per the world energy market [79].

ESS Type	Capacity (GW)	Year (2023) and Source
		IRENA	DoE	IEA
PHES	181.7	✓
Compressed Air	1.622		✓
FES	0.973		✓
Nas	0.316			✓
Lead acid	0.035			✓
NiCd	0.027			✓
Li-ion	0.02	✓
Flow Batteries	0.003			✓

represents the different ESS technologies and their penetration [79]. Moreover, the global scenario of installed ESS capacity is shown in Figure 6 [121].

Focusing on Europe, Figure 7 depicts the installed capacity of battery energy storage systems (BESS) from 2014 to 2023, showing the significant advancements in Europe in 2023 as awareness of their vital role in a safe and affordable sustainable energy transition continues to grow. As the exponential growth curve begins to verticalize, batteries have reached a new phase. With 17.2 GWh installed last year, the market surpassed the 10 GWh threshold for the first time and nearly doubled (+94%) in comparison to 2022, as shown in Figure 7 [122]. Following record growth in 2021 and 2022, when capacity additions reached 94% and 102%, respectively, the European BESS market essentially doubled in size for the third consecutive year. To put these numbers into context, the yearly market size in 2023 was 115 times greater than it was ten years previously, in 2014, when only 150 MWh were installed. Moreover, the European scenario is also depicted in Figure 8 as for their top countries. Along with the long-standing utility-scale market leader, the United Kingdom, certain historically robust residential markets, like Germany, Italy, and Austria, are included in the top five overall BESS market ratings for 2023. This year’s newcomer, the Czech Republic, ranks fifth in our ranking of the biggest BESS market in Europe following a solid 2023 performance. As the graph shows, the top three markets—Germany, Italy, and the UK—dominate the list and are in a separate league. Austria, which comes in at number four, barely made it to the GWh scale [122].

Achieving the EU’s ambitious targets of a 55% reduction in GHG emissions by 2030 and carbon neutrality by 2050 would require acceleration of the deployment of RESs. But increasing the number of RES is not enough; they must be properly incorporated into the system, and their application in the transportation industry, heating, and cooling sectors must be maximized. A RES-dominated system is made possible in large part by ESS. ESS must facilitate the shift to a RE system to maintain supply security, effective energy system functioning, and the competitiveness of EU companies. The RED II prevision presents a significant chance to lower obstacles to the implementation of energy storage, expand on the “Clean Energy for All Europeans” Package’s provisions, and establish storage and RES as the foundation of the energy system [123]. A significant increase in storage capacity will be required to meet the EU’s target of having up to 45% of the energy mix come from RESs by 2030. Each of the three case studies in California focused on procurement mandates that required utilities to obtain set amounts of storage within a given timeframe; South Korea increased capacity through financial incentives; and the Australian example demonstrates how batteries can be integrated into local communities with only minor regulatory changes. These case studies provide examples for European governments looking to expand ESS capacity. All three instances have one thing in common: proactive policy is essential to maximizing ESS advantages and decarbonizing the grid [124].

The RECs are the best option to utilize RESs, and the inclusion of ESS units is a basic component of it. Because most RESs are intermittent, it can be difficult to balance energy generation and load in a way that keeps power networks stable and reliable. Many efforts have been made to investigate workable solutions, which include EES, load adjusting via demand management, and external grid integration. One of the more promising choices is ESS out of all of the possible alternatives [53]. Given the state of the economy, batteries are a more cost-effective option, even though their environmental impact is higher than that of other storage technologies [54]. G. Talluri et al. [20] provide a strategy for RECs’ BESS scheduling. They also suggested a method for planning the timing of a battery energy storage system (BESS) in an REC. The 2018/2001 Directive defines RECs at the EU level; several Member States have incorporated this definition into national laws, defining RECs as virtual MGs because they continue to share a low-medium voltage transformer and use the same LV local feeder. The study in reference [125] examines a REC that operates under Italian law and has assets such as PV generators, BESS, and non-controllable loads. The ESS in local communities was the main emphasis. Reducing BESSs’ use by about 30% in comparison to the unmanaged baseline situation, a prosumer alone might experience an average revenue improvement of 10% over the non-optimized BESS use. W Guedes et al. [126] provided the optimization model while accounting for the BESS’s inclusion in the EC market concept. The main goal of this strategy is to raise community income in addition to taking BESS deterioration into consideration and evaluating different BESS arrangements in EC marketplaces. L. Colarullo et al. [127] have designed a techno-economic analysis in this research to evaluate the effects of using second-life batteries on boosting those communities’ energy self-sufficiency. For the analysis, a cost-minimization strategy with technological and financial limitations is applied to the Italian use case. This study evaluates the advantages that a Local Energy Community can offer while considering load shifting, grid balancing requirements, and self-consumption maximization of PV generation. It also addresses the issue of high storage costs by utilizing second-life EV batteries, which adds a layer of circularity. The findings support the viability of LEC, demonstrating reduced energy costs in each case and increased advantages when combining a solar power system with a storage system. ML Lode et al. [128] examine the seven case studies from Belgium, Spain, the Netherlands, and Greece in this study. These case studies used multi-actor multi-criteria analysis (MAMCA) during the EC design phase. It was seen that lowering emissions, fostering community, lowering energy costs, and maintaining grid stability were the factors deemed most crucial. In every instance, all stakeholders favored EC solutions with increased end-consumer participation and shared advantages. Research work is continued on this topic, as many researchers are engaged in many parts of ESSs in RECs for various topics as discussed.

Table 7. Research work progress and their research focus (2021–2024).

Reference	Year	Technology		Optimization			Sensitivity Analysis	Simulation	Modeling/Design/Operation	Energy Consumption/ Self-Consumption	Energy Sharing	Economic Concern	Environmental Concern	Outcomes/Comments
		Solar/Wind/Other	ESSs	Sizing/Allocation	Management	Other
[129]	2025	✓	✓	−	✓	✓	✓	✓	−	✓	−	−	−	+
[66]	2025	✓	✓	−	−	✓	−	✓	−	✓	✓	✓	−	+
[130]	2025	✓	✓	✓	−	−	−	✓	−	✓	✓	✓	−	+
[131]	2025	✓	✓	−	−	−	−	✓	−	✓	−	✓	−	+
[132]	2025	✓	✓	✓	−	−	✓	−	−	−	−	✓	−	±
[133]	2025	✓	✓	−	−	−	✓	−	✓	−	✓	✓	✓	+
[134]	2024	✓	✓	−	−	−	−	−	✓	✓	−	✓	−	±
[135]	2024	✓	✓	−	−	✓	✓	−	✓	−	−	√	✓	+
[136]	2024	✓	✓	−	−	✓	−	✓	✓	−	−	−	−	+
[137]	2024	✓	✓	−	−	−	−	-	✓	✓	−	✓	−	+
[138]	2024	✓	✓	−	−	−	−	✓	✓	−	−	✓	−	±
[139]	2024	✓	✓	−	−	✓	−	✓	✓	✓	−	✓	✓	+
[140]	2024	✓	✓	−	−	✓	−	−	−	−	−	✓	−	±
[141]	2024	✓	✓	−	−	✓	−	−	✓	✓	✓	✓	−	+
[142]	2023	✓	✓	−	−	✓	−	✓	−	−	✓	✓	✓	±
[143]	2023	✓	✓	−	−	✓	−	✓	✓	−	−	✓	−	±
[144]	2023	−	✓	−	✓	−	−	−	✓	−	−	✓	−	+
[145]	2023	✓	✓	−	−	−	−	−	−	−	−	✓	−	−
[146]	2023	−	✓	−	−	−	−	−	−	✓	−	✓	−	+
[147]	2023	✓	✓	−	−	✓	−	−	✓	−	−	✓	−	±

Note: (Outcomes/Comments: highly supportive = +, medium supportive = ± and less supportive = −).

also highlights the literature work showing the different activities performed by the researchers relevant to ESSs in RECs from 2023–2025.

From the literature, there are no review articles focused on the ESS in RECs. However, very few research papers are available relevant to ESSs in RECs as per the RED II Directive and European legislation, as shown in Table 7. From the articles, most of the outcomes relevant to ESS technologies and their integration into RECs are positive, highly supportive, and effective. Some have partly supported, and some have not supported the ESS integration in RECs. Moreover, it also shows low progress in the development and implementation of ESS technologies due to many reasons. There could also be many issues and challenges behind this. The cost of energy storage systems might be a main barrier to utilizing RECs. Although ESS increases RECs’ initial expenses significantly, it significantly improves their economic performance by growing self-consumption, lowering the costs associated with peak demand, preventing curtailment, and making energy arbitrage possible. Finding a balance between early investment and long-term savings is the main problem. Authors in the report from the National Renewable Energy Laboratory (NREL) [148] offer detailed cost estimates for utility-scale lithium-ion battery systems with a 4 h runtime. The study projects that battery ESS prices will drop from USD482/kWh in 2022 to between USD245 and USD400/kWh by 2030 and USD159 and USD348/kWh by 2050. These estimates, which divide cost trajectories into low, mid, and high scenarios, are based on an examination of current papers and industry data. Moreover, the cost issue could be overcome by selecting the proper ESS, and the optimal sizing and allocation will result in economic benefits. K Berg et al. [149] examine the differences between battery ESS and thermal ESS, emphasizing that thermal ESS is preferable because it requires less capital. It also explores the implications for cost distribution and grid impact. Y Yang et al. [150] examined a cooperative investment model for ESS across several buildings, emphasizing the value of equitable cost distribution mechanisms and optimizing economic advantages through appropriate sizing, operation, and cost allocation. Apart from the cost factor, other challenges have also been discussed in the next section, which could be the reason for less progress and deployment in energy communities. These points must be considered while considering the installation of ESS for the energy sector, specifically focusing on the renewable energy communities.

5. Challenges

Energy storage systems have several benefits, like reducing peak demand, enhancing grid reliability, integrating RESs, mitigating power outages, and supporting diverse applications. Moreover, higher penetration of RESs in RECs is made possible by ESS technologies, while each type of technology has unique challenges. Power-to-gas and hydrogen are examples of CESSs that have low round-trip efficiency, large infrastructure and production costs, and material deterioration over time. Compressed air and PHES are two examples of MESSs that are costly to develop, have limited geographic use, and cause environmental issues. Electrochemical storage, primarily batteries such as flow and Li-ion batteries, encounters issues such as limited raw materials, safety hazards like thermal runaway, deterioration over time, and recycling concerns. Short discharge durations, high costs for large-scale applications, and the requirement for cryogenic cooling in superconductors are problems for electrical storage devices like supercapacitors and superconducting magnetic energy storage (SMES). Combining several storage types, hybrid storage systems come with higher design costs, more integration challenges, and a lack of standardized optimization techniques. Additionally, high upfront expenditures, intricate legal frameworks, difficulties engaging the community, technological constraints, and guaranteeing equal access and benefits are some of the obstacles to implementing community-based ESS [151]. Apart from this, several other issues prevent them from being widely used. Among these difficulties are high initial cost, limited energy capacity, technological limitations, environmental impact, battery degradation, battery SOC effects on ESS, and sizing and allocation issues [64,74].

5.1. High Initial Costs

ESSs can have a high initial cost if the CAPEX is significantly high, as per the industry standard per unit of energy stored (kWh) or power delivered (kW). The criteria should be with the CAPEX versus kWh stored energy or kW power delivered. Deploying ESS technologies affordably is difficult because they sometimes need large upfront investments. Financial obstacles to widespread adoption may come from the price of batteries or other storage technologies, as well as the required infrastructure and installation costs [64]. This could also impact the feasibility, profitability, and payback period. So, ESS technologies with high CAPEX may need financial support, following supportive policies, and economic incentives. Additionally, RECs must weigh performance against cost. A high-priced, long-lasting battery may be preferable to a cheap, short-lived one.

5.2. Limited Energy Capacity

The term “limited energy capacity” describes ESS technology’s intrinsic physical and chemical restrictions that prevent it from storing a significant quantity of energy within its mass or volume. To store the same amount of energy as more energy-dense systems, technologies with restricted capacity need additional room or resources. Even while ESS technologies have advanced significantly, their energy capacity is still limited. These systems’ capacity to store and release energy is usually less than that of traditional energy sources, which may restrict their capacity to withstand extended periods of high demand [64]. A scatter plot graph with energy density (Gravimetric (Wh/kg) or Volumetric (Wh/L)) on the x-axis and duration on the y-axis could be a better option for comparison with different ESS technologies.

5.3. Technological Limitations

Every ESS technology has its own set of technical restrictions. Batteries, for instance, may need to be replaced or maintained because of their short lifespans and gradual deterioration. Other solutions, such as PHES, can be constrained by site availability or geographic constraints. To overcome these constraints and raise the effectiveness and efficiency of ESS devices, more research and development are required [64]. Moreover, the Technology Readiness Level (TRL) option would be helpful to assess the maturity of technology like from concept to commercial deployment and installation. These levels could be TRL 4–6 as demonstration or lab scale level (solid state), TRL 7–8 as pilot deployment (sodium-ion), and TRL 9 as fully commercial (Li-ion).

5.4. Safety and Environmental Impact

ESSs can help lower GHG emissions by facilitating the use of RESs, but their production and disposal methods can adversely affect the environment. For example, rare or hazardous elements are used in several battery technologies. To reduce the environmental impact of ESS devices, it is essential to ensure their sustainable manufacture and recycling [64,152]. Moreover, the need for contemporary MG or REC applications is ESS safety. Numerous concerns, including the magnetic properties of materials, life cycle, temperature, short-circuit issue, and the overcharging and over-discharging characteristics of ESS, must be effectively handled for safe and secure operations. The system’s uncertainty and intermittency may be reduced by this procedure [62]. For both conventional and RES network systems, implementing a comprehensive ESS policy to balance power would be a significant issue to save costs and improve dependability. So, it is a great topic of research to be carried out. However, for the safety risk criteria, failure mode and effects analysis (FMEA) are useful if safety incident data are available, and for the environmental value criteria, incorporating LCA following the data from NREL, IEA, or other sources would be a better option.

5.5. Battery Degradation

The deterioration issue is one of the primary issues with batteries. Aging issues and an increase in battery temperature are brought on by charging and discharging cycles, which, over time, impair battery performance [74].

5.6. Battery SOC Impact

The SOC has a significant impact on the performance and stability of energy storage devices [74]. SOC is essential to the longevity, performance, dependability, and efficiency of ESS. The main impacts of SOC on ESS could be on performance and efficiency, battery degradation and lifespan, grid stability and energy availability, RE utilization, and safety and thermal stability.

5.7. ESS Sizing, Cost, and Allocation

The various ESS technologies are expensive and large. The cost rises proportionately to the size, so the oversized ESS is not viable. Size is determined by the energy and power ratings, as has been covered in several research studies on compressed air, flywheels, HFC, gravity, and thermal or battery storage. A properly sized and distributed ESS can reduce operating costs, increase the usage of renewable energy, and assist with frequency management, all of which enhance grid reliability. More research and innovation in this field is being made possible by the development of sophisticated methodologies, algorithms, and optimization techniques to meet the challenges in ESS planning, design, and implementation [153,154]. Installation and maintenance expenses are included in the price. Another crucial element in energy technology is the cost of energy per unit. Storage materials, capacity, charging/discharging rate, DoD, and life cycle all affect cost [155,156]. ESS is an unavoidable solution for MG and RECs, even though its cost varies greatly depending on the category, and it provides stable and dependable functioning. Moreover, the allocation is also an important factor to consider for the ESS. Several strategies and optimization methods have been proposed and are helpful to maximize ESS allocation and sizing. These optimization processes often employ multi-objective functions that include PV panel power, self-consumption schemes, and the direction of demand growth to determine the most efficient ESS size and location [74].

An organized approach can be suggested to analyze future uncertainty and methodically solve these challenges, such as classifying the storage technologies according to the needs of the applications, mapping the technological, economic, environmental, and social barriers, performing scenario analysis based on future factors such as policy changes or material scarcity, ranking the technologies under various conditions using multi-criteria decision analysis techniques, evaluating the technology’s adaptability and readiness and also by conducting the risk and sensitivity analysis to measure the impact of uncertainties. The evaluation can be consolidated by using tools like fuzzy logic models, Monte Carlo simulations, and SWOT analysis.

6. Discussion

Energy storage systems (ESS) are essential to enable flexible, resilient, and sustainable societies as global energy systems move toward a high penetration of RE. It draws attention to the distinct adoption paths of different ESS technologies, each of which plays a distinct role in RECs. Li-ion batteries will continue to be the most popular ESS technology due to high efficiency, flexibility, and cost reductions. By 2030, lithium-ion batteries are expected to make up more than 80% of all battery deployments worldwide due to their widespread use in EVs, home solar storage systems, and grid support. It is an excellent option for REC applications of all sizes. With enormous capacity and a lengthy service life, PHES remains the largest contributor to ESS worldwide. However, its significance in RECs is limited by geographical and size limits. Subterranean hydro developments and repowering could be the main drivers of future growth. After 2030, it is anticipated that hydrogen (power-to-gas) will expand dramatically, allowing for sector-coupled, long-duration, and seasonal energy storage. Green hydrogen will supplement batteries in off-grid RECs with significant renewable surpluses, industrial facilities, and rural areas when it becomes more affordable. Other ESSs like flywheels and supercapacitors will continue to be specialized technologies aimed at ultra-fast uses such as voltage support, frequency regulation, and mitigating short-term renewable variations. They are particularly useful in RECs with significant grid intermittency and solar PV. All these ESS technologies work together to create a multi-layered environment for storage, like sodium and lithium ions for short-term adaptability, hydrogen, and flow batteries for long-term resilience, and electrical and mechanical ESSs for grid response and stability. Moreover, the following are some ESS discussions and technical recommendations:

• Various ESS technology options are available, but from the RECs’ perspective, Li-ion and sodium-ion small-scale RECs (households, villages) are affordable, small, and simple to incorporate. For medium-sized RECs (towns, islands), Li-ion, VRFB, scalable for MG operation, and long cycle life. As for the grid-connected RECs, flywheels, and Li-ion are perfect for supplementary grid services and peak shaving. Moreover, the national and regional bulk storage requirements include PHES for energy security and seasonal balance. Also, EV batteries for stationary storage in RECs could reduce expenses and e-waste by reusing. So, as we move toward decarbonized energy systems, RECs will need to strategically combine a variety of energy storage technologies to optimize RE use, improve dependability, and guarantee energy autonomy.
• Promoting new technology, like hybrid ESS usage, is also necessary. For more versatility, combine Li-ion, sodium-ion, and solid-state batteries with thermal storage, pumped hydro, or hydrogen. One example of a supporting policy or law that governments can implement to promote the growth of RECs is community-based ESSs and RESs targets. Even if adding new technology is expensive, investors find it difficult to pay for it. The government or funding organizations should, however, assist in this situation by providing loans or subsidies to ensure that RECs operate effectively.
• Advanced transmission and distribution networks are necessary to manage the decentralized storage and energy-sharing within RECs and make investments in smart grids with bidirectional energy flow. Advanced energy management systems (EMS) are also required in practice to optimize the real-time supply and demand balancing and energy flow. Additionally, the integration of Vehicle-to-Grid (V2G) could be the best opportunity to make use of electric vehicles (EVs) to store energy on the go and return extra power to the REC via the grid.
• DSM strategies for economic viability are required to be improved to promote load shifting to lower peak demand and improve storage effectiveness. Also, energy trading (Like P2P or other) in RECs could be facilitated using smart contracts like blockchain technology.
• There must be proper planning and design focusing on the optimal sizing and placement, and their optimal operation to initialize the projects of ESS integrated with other RESs used in RECs, having benefits like maximizing self-consumption and energy sharing within the community.

7. Conclusions and Future Suggestions

This article focused on energy storage systems for power system networks and renewable energy communities, contributing to the body of knowledge already in existence by providing comprehensive and up-to-date data and analysis of ESS technologies and their role. Starting from the scope and importance and the associated services, a thorough comparison of the different energy storage systems has been provided by this study. It offers important insights into the suitability of these technologies for diverse applications throughout the power system by contrasting important features like efficiency, response time, capacity, and cost-effectiveness, and the limitations. Batteries work well for dispersed energy systems like MG and RECs and short-duration applications but pumped hydroelectric storage (PHEL) is more practical for long-duration energy storage and more effective for large-scale applications. From the RECs’ perspective, Li-ion and sodium-ion small-scale RECs are affordable, small, and simple to incorporate. For medium-sized RECs, Li-ion, and VRFB are scalable for MG and REC operation, and long cycle life. As for the grid-connected RECs, flywheels, and Li-ion are perfect for supplementary grid services and peak shaving. Moreover, concentrating on RECs, which offer numerous benefits in the social, economic, and environmental spheres, studies on this topic are ongoing, and it is evident from the literature that, despite the numerous advantages, energy storage systems in REC development are still not progressing at a high rate, and there is a dearth of technology component research, both of which need to be addressed. The challenges already discussed could also be the reason that affects the progress and implementation of ESS in RECs. In this regard, future suggestions have been given that could boost the deployment of ESS in RECs as given below:

• Policy and regulatory recommendations are very important to address here, such as reducing the administrative issues in RECs to expedite the ESS approvals and streamline bureaucratic procedures for ESS in RECs projects, making ownership and grid access regulations clear to establish explicit guidelines for self-consumption, energy sharing, and market participation in REC, standardizing the ESS Grid Connection Policies to enable the smooth integration of ESSs in RECs in all EU member state. Apart from this, financial rewards and market changes are also necessary, like lowering upfront expenses and offering targeted incentives like tax discounts, CAPEX subsidies, or low-interest loans, promoting energy-sharing frameworks, to make REC storage profitable by using feed-in tariffs, dynamic pricing, and advantageous net metering.
• Reduction in cost barriers and drawing positive intentions for the investments is important to highlight. There should be public–private partnerships to finance the implementation of ESSs by promoting collaborative investments between governments, private investors, and energy cooperatives. Likewise, financing research and development for the advanced ESS technologies will help boost EU investments in green hydrogen storage, next-generation batteries, and substitute materials.
• Community involvement and awareness are highly recommended. It should be only effective when the seminars are arranged for the residents on the advantages of energy sharing and the role of ESS. Providing them the transparent governance mechanisms to support community-led energy initiatives and ensuring equitable access to ESS solutions, especially for low-income households, is the goal of inclusive energy policies.
• Environmental and safety issues for using ESS technologies need to be addressed. For this, precise instructions must be provided to dispose of, recycle, and reuse the batteries. Emergency response plans and safety requirements for ESS installations should also be provided.

The main factors driving the development of these RECs will be the integration of RESs, continuous improvements in ESS technology, widespread use of smart metering solutions, and the use of digital technologies and AI. The ultimate objective of these programs is to realize intelligent, efficient, and sustainable ESS. Moreover, a comprehensive strategy that combines all these factors, including community-driven projects, financial incentives, improved ESS technologies, the EU’s role in improving energy sharing mechanisms, expediting permitting, and fortifying RED II implementation and governmental reforms, is required to speed up the implementation of ESSs in RECs. In summary, ESSs in RECs will be crucial for attaining a more robust and sustainable energy future as the energy transition proceeds, and the perspectives presented in this study can help all stakeholders, policymakers, enterprises, governments, participants, and municipalities.