Global Trends in Community Energy Storage: A Comprehensive Analysis of the Current and Future Direction

Abstract

Community Energy Storage (CES) is a rapidly evolving field with the potential to transform the modern energy landscape and enhance sustainability initiatives. This comprehensive review paper explores the multifaceted nature of CES, encompassing its diverse technologies, ownership models, regulatory frameworks, sharing paradigms, and applications. Technical aspects of various CES technologies, including batteries, flow batteries, pumped hydro storage, hydrogen-based systems, compressed air energy storage, flywheels, thermal storage, and future technology have been reviewed in detail. Additionally, different ownership models, ranging from private and community-owned to government-led initiatives have been examined. Regulatory frameworks, investment incentives, and grid integration standards are also explored, highlighting the importance of clear guidelines and international collaboration for the successful deployment of CES globally. Furthermore, diverse applications of CES, including increased self-sufficiency, lower energy bills, ancillary services, demand response, and bulk energy applications are discussed. By addressing the challenges and opportunities associated with CES, this review paper aims to contribute to the advancement and widespread adoption of this promising technology, ultimately fostering a more sustainable, resilient, and equitable energy future to meet global net-zero goals. This is achieved by summarising the future direction of CES and posing some yet unexplored research questions.

1. Introduction

In this paper, we explore the concept of Community Energy Storage (CES), a rapidly evolving field that holds significant potential for addressing the challenges of the modern energy landscape. CES occupies a unique position between single-home energy storage, large systems, and grid-scale energy storage, offering a range of benefits to both end-users and the electricity network. However, despite its promising potential, there is a lack of comprehensive understanding regarding the technical, economic, and regulatory aspects of CES globally. This paper aims to fill this gap by providing a thorough overview of CES, examining its various applications, technologies, ownership, and regulatory dynamics. We also discuss future directions and evolving research areas in more depth and greater detail in Section 8.

The introduction of CES has been driven by a convergence of factors, including the increasing adoption of distributed energy resources (DERs), renewable energy generation farms such as wind and photovoltaic (PV) [1], the growing demand for energy resilience, and the need for more sustainable and efficient energy systems. CES offers a scalable, adaptable, and cost-effective solution to many of the challenges posed by the integration of DERs into the grid, such as managing intermittent renewable energy sources. Customers with newer installations often pay more for imported electricity than they earn from exporting excess power. CES allows them to store this excess energy for use during peak demand or higher-priced periods, lowering their electricity bills, maximizing their renewable energy investment, and providing backup power during grid outages. Furthermore, CES can contribute to grid stability, reduce peak demand, and help facilitate the integration of electric vehicles.

The structure of this review paper is as follows: Section 2 explores the numerous paradigms surrounding CES sharing frameworks and their common characteristics. Section 3 investigates the coinciding ownership models of CES and presents a summary in an analysis of Strengths, Weaknesses, Opportunities, and Threats (SWOT). Section 4 offers a comprehensive overview of the various types of CES technologies, including their technical specifications, advantages, and limitations. Section 5 examines the diverse applications of CES, encompassing its role in demand response, grid support, ancillary services, and microgrids. Section 6 delves into the economic and regulatory aspects of CES, discussing business models, financial incentives, and policy frameworks that shape its development. Section 7 presents a discourse on several CES-related topics, raising questions about its current and future trajectory. In conclusion, Section 8 summarises the paper’s findings and provides our recommendations for future research and development endeavours. Section 8 also presents our review, thoughts, contributions, and findings from the rest of the paper. Figure 1 that we created below summarises the structure of the paper.

Based on our thorough assessment, we firmly believe that CES is vital to achieving a net zero energy system. By conducting a comprehensive analysis of CES, this paper seeks to make a significant contribution to the advancement and widespread adoption of this promising technology.

The schematic representation of a single home, community storage, grid-scale, and bulk energy storage in battery storage capacity order of magnitude can be seen above in Figure 2. A system view of what a Community Energy Storage System could look like is shown above in Figure 3 [2]. The definition of low voltage (LV), medium voltage (MV), and high voltage (HV) differs across the world and some standardised examples are given below in Figure 4. In addition, some national organisations have their own definitions e.g., NERSA, the energy regulator in South Africa, defines Medium Voltage as between 1 kV and 44 kV [3]. It is possible that the design and implementation of CES may vary partly based on these definition differences.

Table 1. Summary of the various CES scales and characteristics.

	Single Home	Community	Grid-Scale	Bulk Storage
Target User	End-user	End-user and network	Network (regional electricity)	Generators and network
Storage Capacity	<20 kWh	kWh–MWh	MWh	MWh–GWh
Location	Single properties	Local distribution grid	Electricity transmission networks	Electricity transmission networks

below contains a summary of the various energy storage systems (ESSs) and the common characteristics [4,5].

2. Classification of Community Energy Storage

Several review studies on CES have already been published given its increasing relevance for future energy systems. Some of the key reviews, by Ibrahim [6], Chen [7], and Huggins [8], dove deeper into the holistic CES concept, which discussed the applications, technologies, and related key technical characteristics such as capacity, efficiency, and durability. These reviews provide a broad overview of the CES landscape. For a more in-depth analysis, recent reviews have become increasingly specific, e.g., a review of energy storage technologies for wind power applications by Díaz-González et al. [9]; the review of electricity storage applications by Brunet [10]; and the review of phase change materials (PCMs) for building applications by Belen et al. [11]. Later reviews focus on the recent development of a particular technology, application, scale, and/or country. Some examples are Niaz et al. on hydrogen storage [12]; a comparative analysis of the life cycle cost of different CES technologies by Zakeri et al. [13]; a comparison of the daily and weekly schedules including cost optimisation for different storage technologies by Ho et al. [14]; Stan et al. on lithium-ion (Li-ion) batteries for power and automotive applications [15]; and Lyons et al. on demonstration projects in UK distribution grids [16]. From the aforementioned papers, it is evident that CES can be summarised under three main topics outlined by Parra et al. [17], the first consideration of CES as focused on in multiple papers by Li et al. [18,19,20], is regarding the sharing model of the CES. Sharing models are typically broken into three categories: private only, shared only, and mixed as shown below in Figure 5. The second key point is the energy storage technology used to store energy. Finally, the business model is the last key classification.

2.1. Sharing Model

In Community Energy Storage (CES), the complex relationship between sharing frameworks and ownership schemes is key to determining the structure of community energy efforts and influencing the energy communities. This aspect is paramount as it explains the dynamics underlying cooperative energy management within communities. The effectiveness of CES implementation depends on careful alignment of ownership structures and sharing frameworks [21]. Within the sharing framework of CES, three main paradigms have emerged, each representing a different approach to energy management. These are the private-only model, the shared-only model, and the mixed private + shared model. These sharing model paradigms serve as the foundation for Community Energy Storage systems and display unique ownership relationships [22].

The paragraphs below explore the complexity of these configurations and detail some of the advantages and disadvantages each sharing framework has. By analysing the frameworks, we contribute to a comprehensive understanding of how sharing dynamics shape not only the applications but also the technologies utilised.

2.1.1. Private Framework

The private model has historically been utilised at the community level due to a lack of development of a shared community enterprise and a lack of incentives for organisations to invest in owning CES. Private ownership would then encompass both individuals and private organisations, who would then assume exclusive ownership and management of their energy storage capability and applications, often for economic gain. This framework emphasises individual autonomy, allowing private owners to customise their energy storage systems to their specific needs and preferences [23]. Although a purely private framework promotes independence, the overall benefit may be limited to some extent due to economies of scale, reduced purchasing power, and overall capacity inefficiencies, unlike shared models. Due to this a risk that must be considered is the stability of the overall network and the associated reliability issues around meeting application agreements. Nevertheless, this is consistent with a decentralised approach to energy management, where decision-making power is firmly in the hands of the individual or organisation.

2.1.2. Shared Framework

The shared framework is a newer concept that demonstrates community engagement through either a centralised or decentralised energy storage (ES) enterprise. Shared ES enables community collaboration through the collective use of energy storage resources. The shared model aligns closely with either organisational ownership or government ownership schemes due to the large financial capital required. Work is currently being carried out in the techno-economic space around community ownership involving multiple homeowners and the integration of that into a regulated and viable framework for both the energy companies and investors as financing can be a hurdle for communities to overcome. Some advantages of a shared model are the economies of scale surrounding purchasing power (capex) and opex. In a decentralised structure, you also have redundancy due to no single point of failure, while centralised systems have reduced installation times as they can be prebuilt and only require a grid/house connection to be made. Shared system enterprises also benefit from requiring reduced overall capacity due to statistical multiplexing modelling which states that not everyone will draw energy at the same time. A limitation of this framework is that integration of the required centralised infrastructure into existing communities can be difficult and is better suited to developing communities where planning can be conducted to include the system at the design stage. De-centralised systems are potentially better suited to existing communities due to reduced installation complexities.

2.1.3. Mixed (Private + Shared) Framework

The private + shared model introduces a dynamic combination that combines community and individual ownership into a single energy storage system. In this paradigm, certain energy storage facilities are collectively owned and serve the broader community, while other facilities may be privately owned. This hybrid approach provides a flexible solution that meets different preferences within the community.

Residents can invest in private energy storage while participating in municipal energy storage infrastructure. This model balances collective utility, economy of scale, and individual autonomy and considers different energy consumption patterns within a community.

2.1.4. Summary

Understanding the complexities of these sharing frameworks is essential to developing energy strategies that are consistent with community goals. The choice between a shared-only, private + shared, or private-only model depends on factors such as community cohesion, infrastructure availability, individual preferences, and a collective vision for sustainable energy management. In many cases, in the evolving Community Energy Storage landscape, mixed or hybrid models may emerge, reflecting pragmatic integration that optimises the benefits of community cooperation and the associated advantages, and individual autonomy. This can be seen in

Table 2. Typical advantages and disadvantages of each sharing paradigm.

Sharing Framework	Ownership Model	Advantages	Disadvantages
Private	Individual homeowners or private organisations	Individual autonomy, Customisation of energy storage solutions	Limited economies of scale, Reduced purchasing power, Potential network instability, Security concerns
Shared	Centralised or decentralised community enterprise (organisational or government)	Economies of scale (capex and opex), Redundancy (decentralised), Reduced overall capacity needed, Community collaboration	Integration challenges (centralised), Complexities in techno-economic aspects (community ownership)
Mixed	Combination of community and private ownership	Flexibility for diverse needs, Balances collective benefit and individual autonomy, Accommodates varied consumption patterns	Requires careful management of dual ownership structure

below which summarises the strengths and weaknesses of each.

2.2. Ownership Model

2.2.1. Private Ownership

Private ownership models in the energy storage sector highlight the role of the private sector in driving innovation, efficiency, and competitiveness in the market. Companies invest in CES projects with the primary aim of generating profits, whether through energy arbitrage trading, providing network applications or improving energy security [24,25]. Ownership and investment decisions in the private sector are largely driven by market dynamics. Private entities evaluate potential Return on Investment (ROI) by considering factors such as energy market conditions, regulatory environment, and technological advances. The profit motive serves as a powerful driver of innovation, motivating companies to optimise performance, reduce costs, and explore new revenue sources [26]. Private ownership can involve a range of participants, from large established corporations like Tesla to innovative startups developing new storage technologies. The competitive nature of the private sector demands a dynamic environment in which different companies compete for market share, contributing to the rapid development of energy storage technology. Private ownership models are often more flexible in adapting to technological advances and changes in market conditions as businesses can quickly adjust their strategies based on emerging opportunities or challenges. This flexibility is important in an industry characterised by evolving technologies and regulatory landscapes. Private ownership also emphasises efficiency and profitability as companies strive to market competitive energy storage solutions [27]. While the pursuit of profit stimulates innovation, a prominent risk is it can lead to a concentration of investment in commercially attractive projects, potentially making certain regions, scales of storage, or applications not served. To address this, the regulatory framework could include mechanisms to ensure broader social benefits and encourage private sector investment in projects that contribute to grid resilience overall and provide community benefits [26].

2.2.2. Community Ownership

The Community ownership archetype represents a collaborative and localised approach to energy storage, often involving collective ownership and management of CES projects by key members of the community. Community-centric ownership aligns closely with either a centralised or decentralised shared system model.

Communities can jointly own and manage CES projects, ensuring the benefits of clean energy are shared within the community [28]. This approach is closely aligned with the principles of social and environmental sustainability. The ownership structure in community-centred models often involves the establishment of local cooperatives or community organisations responsible for developing and operating CES projects while aligning with the government regulatory authorities. This model enables communities to actively participate in applications where private owners are unable to due to the alignment with a shared network paradigm. One of the key benefits of community-centric models is their potential to contribute to local economic development within the community and become a driver for the reduction in fossil fuels and the potential for off-the-grid community living [26]. Additionally, the localised nature of these projects could lead to more distributed and resilient energy infrastructure, reducing the risk of outages of centralised systems. However, a limitation is the challenges related to initial capital investment, regulation, continuing management, and expertise. Collaborative funding and partnerships with external organisations, including governments or private investors, can help address these challenges while ensuring the benefits remain with the community [28]. In the United States, Vermont’s Community Program exemplifies a community-owned battery storage project.

2.2.3. Government Ownership

Government-ownership models require direct government involvement and investment in energy storage projects. These are often driven by national energy policies and sustainable development initiatives. The government plays a central role in owning, financing, incentivising, regulating, and controlling the operations of CES projects.

Funding for government-led CES projects typically comes from the public treasury, with budget allocations or funds dedicated to clean energy initiatives [27,29,30,31]. For instance, China’s large-scale deployment of pumped hydro storage is an example of a government-led CES initiative. The ownership structure of this model often involves the establishment of public entities or agencies specifically responsible for overseeing the planning, implementation, and operation of CES projects [28]. This centralised ownership allows for a more strategic and coordinated approach, ensuring alignment with national strategic energy goals. Operational control is an important aspect of government-led models. Governments often establish legal frameworks and standards to guide the design, integration, and operation of CES projects, into the overall energy infrastructure [27]. Centralised control enables strategic decision-making, coordination with other energy initiatives, and overall energy system optimisation and design.

However, a risk is that it leads to bureaucratic problems and potential delays in decision-making. Government-led models act as catalysts for large-scale energy storage deployment. By leveraging financial resources and regulatory influence, governments can lead the transition to more resilient and sustainable energy infrastructure. This approach is particularly effective in addressing strategic energy security concerns, as governments can prioritise projects that improve grid stability, reduce dependence on fossil fuels and promote the integration of renewable energy sources [29,30,31].

2.2.4. Summary

In summary, the complex nature of ownership archetypes in the energy storage sector reflects the multifaceted nature of CES implementation and governance. As outlined below in

Table 3. SWOT analysis of ownership frameworks (own work).

SWOT Analysis	Privately Owned	Community-Owned	Government-Owned
Strength	Operational efficiency and expertise, Expedited implementation	Local control and direct benefit, Enhanced community engagement	Long-term vision and stability, Potential for social equity
Weakness	Profit motive, limited transparency	Significant upfront investment, Decision-making complexity	Bureaucracy and delays, Political interference
Opportunity	Public–Private Partnerships (PPPs), Financial incentives	Public–Private Partnerships (PPPs), Financial incentives, Community education	Public–Private Partnerships (PPPs), standardised regulations, and financial incentives
Threat	Grid modernization, Market volatility	Grid modernization, Market volatility, Lack of funding	Market volatility, public opposition

, Government-owned CES offers a strategic and focused approach, leveraging financial resources and regulatory influence to promote large-scale implementation [27,29,30,31]. Private models contribute to innovation, efficiency, and market competitiveness [24,26,32], while community-centric models prioritise local participation and engagement, economies of scale, sustainability and viability, and economic resilience [28]. The symbiotic interaction of these frameworks is shaping the evolving ownership landscape, trying to target diverse needs, while also contributing to a more sustainable and resilient energy future. As the industry evolves, we will see the emergence of hybrid models that combine elements of government, private, and community ownership to leverage the strengths of each approach.

2.3. Technology of Energy Storage

The importance of the energy storage technology chosen in the CES cannot be overstated, as it is central to the effectiveness and adaptability of the energy storage solution. In this section, we examine the numerous storage mediums available to address the challenges associated with integrating energy storage, managing modern energy networks, and their associated demands, by analysis of the below forms of storage summarised in Figure 6 below [6].

2.3.1. Battery Energy Storage System (BESS)

Battery storage technology is one of the most popular storage technologies today. The principle behind a battery is that the energy is stored in cells that contain two conductor electrodes and an electrolyte, in the form of electrochemical energy. This energy can be connected in series or parallel to create the desired voltage and capacity [33]. Due to the BESS having the ability to connect in series/parallel low-voltage modules can be configured to achieve the required electrical characteristics [34]. The modular nature of the battery system further enhances its appeal, allowing communities to dynamically adapt storage capacity to meet their evolving energy needs, thereby enhancing the resilience of local energy grids [18]. In the application of electrical energy storage, various battery technologies are utilised, each boasting distinct advantages and applications [35]. In the following sections, we will examine some of the most important battery topologies. Advancements in PCB (Printed Circuit Board) manufacturing, SMDs (Surface Mounted Devices), and control components have greatly impacted energy storage technologies. PCBs serve as the foundation for electronic devices used in energy storage systems. PCB advancements have allowed for the miniaturisation of electronic components, leading to more compact energy storage systems. Improved PCB design and materials have resulted in increased efficiency and reduced power losses. Innovations in PCB manufacturing processes have also enhanced the reliability and durability of energy storage systems, ensuring continuous operation and long service life [36,37].

Lead–Acid Battery

The Lead–acid battery is the most mature battery type. It is made up of stacked cells, immersed in a diluted solution of sulfuric acid (H₂SO₄) as an electrolyte. Each cell’s positive electrode is composed of lead dioxide (PbO₂), while the negative electrode is sponge lead (Pb). During discharge, both electrodes are converted into lead sulphate (PbSO₄). Lead–acid batteries typically come in two variations: valve-regulated batteries, and flooded, which is the most common [38,39]. It is worth noting that increased operating temperatures < 45 °C [40] will reduce the system’s lifetime but increase battery capacity. Lead–acid batteries have a few disadvantages, notably those around premature failure due to sulphation [41], and high periodic maintenance coupled with poor performance [42]. Some key performance characteristics have been summarised in Table 4 below [40,41,43,44,45,46].

Lithium-Ion Battery

Lithium-ion is the most common battery, ranging from small electronics to larger electronics such as electric vehicles (EVs) and energy storage [35,47]. The chemistry of Li-ion batteries is based on the electrochemical reactions between positive lithium ions (Li⁺) with anolytic and catholytic active materials [48]. The cells are made of anolytic and catholytic plates. A porous separator of polyethylene or polypropylene, which allows lithium ions to pass, delimits electrode areas. The catholytic is usually based on lithium metal oxide, such as lithium cobalate (LiCoO₂), while the anolytic is graphite [49]. The electrolyte is usually a non-aqueous organic liquid, such as PC, EC or DMC, which contains dissolved lithium salts such as LiClO₄ [35,48]. A vast amount of research is being conducted on the elements of batteries [35,48,49,50,51]. Some advantages of lithium-ion batteries are the quick charge and discharge capability and the fast time constant of around 200 ms [52]. This leads them to be favoured where weight and response times are important. Although they are predominantly chosen for short-time-scale applications due to the high self-discharge rates, unlike in small-scale electronics such as phones and PCs [4,40,52]. One important concern regarding lithium-ion batteries is the thermal runaway risk. Some key performance characteristics are outlined in Table 4 below [40,53].

2.3.2. Flow Battery Energy Storage System (FBESS)

FBESS is a newer battery storage concept that focuses on reversible electrochemical reactions that occur in cells connected in parallel, series, or both. Unlike conventional batteries, two different aqueous electrolytic solutions are contained in separate tanks. During normal battery operation, these aqueous solutions are pumped through the electrochemical cell where the reactions occur [54,55,56]. Unlike lithium batteries with graphite electrodes, flow batteries utilise hydrophobic carbon electrodes which require thermal treatment and catalyst addition to increase the catalytic activity [57]. A huge advantage of flow batteries is that the capacity is easily scalable due to it depending on the volume of the stored electrolyte and the ability to fully discharge, very low self-discharge rate, and low maintenance [58]. This allows for the unique principle of disconnected energy and power characteristics, this comes at a large cost to manage the battery due to the physical hardware required [54].

Vanadium Redox Flow Battery (VRB)

VRB batteries utilise the following chemical makeup. In the anolytic reservoir, V2⁺/V3⁺ are used as electrolytes, while the electrolytes V4⁺/V5⁺ are used in the catholytic reservoir [59,60]. When an electrochemical reaction occurs, carbon electrodes enable the electron flow through the load, while the electrical balance is achieved via the migration of a hydrogen ion through the membrane which separates the two electrolytes. A focus area for research in the future is around making the membrane a more effective barrier for vanadium species crossover [61]. Some disadvantages of a VRB are needing to replace the membrane every 5 years [62], and its relatively low specific energy and energy density [15]. Some extra characteristics are outlined in Table 4 below [63,64,65,66,67].

Polysulphide-Bromide Flow Battery (PSB)

PSBs, also referred to as fuel cells or Regenesys, are designed around the electrochemical reaction regarding two salt-based electrolytes: sodium bromide (NaBr) and sodium polysulphide (Na₂ S_x). The electrolytes are separated by a polymer membrane which only allows the interchange of positive sodium ions [34,56,58,60]. During the charge cycle, bromide ions (Br⁻) are transformed into tribromide ions (Br⁻₃) in the positive electrode of the cell. In the negative electrode, dissolved sodium particles (S²₄₋) in the polysulphide electrolyte are reduced to sulphide ions (S22−). The advantages of PSB are no self-discharge and the vast quantity of chemical elements although toxic bromine gas can be an issue [58,60]. PSB can reach an energy density of 92.8 Wh/L⁻¹ and a theoretical energy density of up to 440 Wh/kg⁻¹ [68,69]. Some technical characteristics are summarised below in Table 4 [60,70].

Table 4. Summary of key battery archetypes performance characteristics.

Battery Type	Lead-Acid	Lithium-Ion	Vanadium Redox Flow	Polysulphide-Bromide Flow
Best Case System Life (years)	5–15 [42]	10–15	15–20	15
Cycle Life	1000–1800	2500–4000	15,000+	-
Efficiency (%)	70–80 [41]	85–95 [41]	75–85	75
Self-Discharge (%)	<0.1	1–5	1.5 [61]	0
Specific Energy (W h/kg)	30–50	100–250 [54]	25–35 [66]	154 [68]

Table 4. Summary of key battery archetypes performance characteristics.

Battery Type	Lead-Acid	Lithium-Ion	Vanadium Redox Flow	Polysulphide-Bromide Flow
Best Case System Life (years)	5–15 [42]	10–15	15–20	15
Cycle Life	1000–1800	2500–4000	15,000+	-
Efficiency (%)	70–80 [41]	85–95 [41]	75–85	75
Self-Discharge (%)	<0.1	1–5	1.5 [61]	0
Specific Energy (W h/kg)	30–50	100–250 [54]	25–35 [66]	154 [68]

2.3.3. Supercapacitor Energy Storage System

Supercapacitors contain multiple conductor electrodes, a porous membrane where ion transit exists, and an electrolyte which are based on electrochemical cells [71]. Twin-layer capacitors, another term used for a supercapacitor, obtain its name by having two interfaces. This is achieved by the electrolyte-positive electrode and electrolyte-negative electrode interface [16]. Due to the low operating voltage, there can be no redox reactions that occur and this allows for the charge to be accrued [72]. Like generic capacitors, capacity is proportional to the electrode surface area and inversely proportional to the distance between the electrodes [39]. Energy is proportional to the square of the terminal voltage between the electrochemical cells and directly proportional to the capacity [73]. The key difference is the use of porous electrodes along with high surface areas in supercapacitors which allow for greater energy densities. Similar in topology to batteries, to increase the voltage and capacity of the system, supercapacitors are placed in parallel or series connection [4]. Supercapacitors generally can be grouped by symmetrical or asymmetrical design depending on the electrodes [74,75,76]. Further archetypes exist once the electrode and electrolyte design are factored in such as metal-oxide electrodes, activated carbon electrodes, and electronically conducting polymer electrodes [77,78,79]. Each has its applications and performance characteristics depending on the design. The electrolyte can be distinguished between two most common types, organic electrolytes or aqueous electrolytes [76,80,81]. Although, many more exist due to the importance of selecting the right electrolyte material due to its breakdown voltage being the limiting factor in the voltage of the supercapacitor cell [82]. Supercapacitors are considered to have short response times with a cycle time of 1–30 s at rated power, and short-time-scale applications due to the high self-discharge rate of 20% over a 12 h period of its rated capacity [83,84]. Advantages are the high life cycle of 5 × 10⁴–10⁵ and relative energy efficiency of 75–80% [79,85]. However, specific energy is quite low—around 2–5 Wh/kg [4,86,87].

2.3.4. Hydro Energy Storage System

Pumped Hydro Storage (PHS)

PHS is a large-scale energy storage system that can be divided into type-one and type-two applications with typical energy potentials around 1670 GW for type-one and 1450 GW for type-two, respectively, which lends its usage towards high-power applications [6,88]. The principle behind PHS is that water is pumped from a lower reservoir to an upper reservoir during low energy demand periods utilising potential gravitational energy [89]. The typical life of PHS systems is 30–50 years with a round-trip efficiency of 65–75% [43].

In the CES context, hydropower is a reliable and efficient means of storing large amounts of energy, which is particularly advantageous in regions with abundant water resources. In Europe’s largest man-made cavern, the First Hydro Company in 1984 commissioned a PHS system capable of producing over a 5 h period 1728 MW. This PHS system with its sub 1 min response time can ramp its production from 0 to 1320 MW of power in 12 s by use of 6 × 330 MW turbines [90].

Hydrogen-Based Energy Storage System (HESS)

Hydrogen gas can be attained by numerous methods notably the most common being coal, fuel, biomass, solar, and wind [91,92,93]. Hydrogen is a highly abundant, clean, and non-toxic gas [12,94,95,96,97,98]. Hydrogen gas when stored is known as Regenerative Fuel Cell (RFC) [99]. Storage mediums include metal tanks or composite materials to allow storage as a gas [91,100] or metal hydrides up to 350 bar [40,41]. As mentioned in [93], metal hydrides are preferred for storage periods longer than 3 h while metal tanks are suitable for large volume storage up to 30 h. Hydrogen once produced can be transported through pipes to create electricity or stored directly in fuel cells [73]. The power conversion system has a relatively low efficiency of 42% due to the fuel cell being 60% efficient and the electrolyser only 70% efficient [18,19,20]. Due to the catalytic material being platinum in most cases, this drastically raises the cost of the device [40]. HESS benefits are the ability to have high-power systems in excess of 100 MWh, with peak power in excess of 10 MW [6]. This coupled with the zero self-discharge allows for long-time-period storage [25,101]. The lifespan of the average RFC system is 15+ years with 20,000 cycles at 100% depth of discharge (DoD) [93,94]. In comparison to hydrogen storage in passenger vehicles it is 5000 h, 8000 h for light-duty trucks, and 30,000 for heavy-duty trucks as mentioned by the Department of Energy (DOE) [102]. Hydrogen only releases water vapour as an emission after the power conversion which reduces its environmental impact [12,91,103,104].

2.3.5. Mechanical Energy Storage

Compressed Air Energy System (CAES)

CAES utilises conventional gas turbine technology. Compressed air from a storage device/cavern is converted into rotational kinetic energy once it has been heated and passed through a set of low and high-pressure turbines. Once mixed with natural gas and combusted the turbines are connected to an electrical generator to produce electrical energy. Excess heat from the turbines is fed back into the system to heat the compressed air [105]. Some notable uses of CAES are mentioned below. Significant advances in CAES are that of Advanced-Adiabatic CAES (AA-CAES). This technology utilises Adiabatic compression of the air before being placed into storage. Some concerns discussed in [4] around expander trains, compressors, and the expensive cost of heat exchangers challenge the success of AA-CAES. The average lifespan of CAES is 40 years with an energy efficiency of 71%. Due to the low self-discharge rate, CAES is considered a long-time-scale storage solution [45]. In America, CAES is utilised as an energy storage system with two notable projects being a 110 MW storage facility and the proposed 2.7 GW Iowa Stored Energy Park Project that was planned in parallel with a large wind farm [106]. Another notable ESS is in Germany where CAES is utilised to store 290 MW of energy [6].

Flywheel Energy Storage System (FESS)

FESS is an electromechanical system that harnesses energy in the form of kinetic energy. The construct of a FESS is generally a structure placed inside a vacuum to reduce wind shear [58,72] with a rotating mass suspended on two magnetic bearings to decrease friction at high speeds coupled with an electric machine [71,107]. Two main types of flywheel systems exist, the radial-flux and the axial-flux permanent magnet machines. It is worth noting that synchronous induction or reluctance machines exist. How the FESS works as a motor is it transfers energy to the flywheel accelerating it and then the machine regenerates. As the flywheel is slowing down, it discharges energy. This energy is dependent on its inertia and the square of the rotating speed. Due to the rotating speed being crucial for energy storage, there are two main classifications of speed: low speed is rpm measured in thousands, and high speed is rpm measured in tens of thousands [45,108]. High-speed rotors are required to be made of advanced composites such as graphite or carbon fibre [51,109]. FESS systems boast high efficiency of 90% of rated power, wide operating temperature range, long cycle life, nil depth of discharge effects, higher energy density, and higher power [58,72,107,110]. Some negatives are the loss of 20% stored energy capacity per hour [40,108]. Due to this, FESS is not designed for long periods of storage.

2.3.6. Thermal Energy Storage

In CES the use of thermal energy as storage is emerging as an important and increasingly explored aspect. Methods of thermal energy storage include phase change materials (PCMs) and rational thermal storage systems [11,111]. PCMs undergo a phase transition (e.g., solid to liquid or vice versa) as they absorb or release heat, providing an efficient means of storing and recovering thermal energy. Rational heat storage involves storing energy in the form of temperature changes in a material, usually a solid or liquid, without a change in phase. A notable advantage of thermal energy storage is its ability to provide both heating and cooling services. TES systems can be used alongside combined heat and power (CHP) systems, providing a comprehensive solution to meet a community’s diverse energy needs.

Despite its potential, challenges exist such as heat loss and choosing suitable storage materials. Continued research and advances in materials science and engineering, along with a better understanding of thermodynamics, continue to advance thermal storage technologies.

2.3.7. Future Technologies

Thermo-Chemical Energy Storage (TCES)

Chemical fuels are an area with rapid development as studies are focusing on new chemical and thermos-chemical energy storage technologies such as thermos-chemical reactions utilising the ammonia system and sorption [97,112]. In thermochemical energy storage, the typical energy storage process occurs after there is a dissociation reaction and then recovered in a chemically reverse reaction later when the energy is required [113].

Synthetic Natural Gas (SNG)

Investments into SNG are also occurring as an alternative to HESS. Natural gas is the most popular gas fuel, mainly consisting of CH₄. Biogas, Landfill gas, SNG, and bio-SNG are the other gas compounds. Biogas is produced by decayed organics and contains CH₄ and CO₂. The composition of landfill is similar to biogas [114]. Synthetic natural gas (SNG) means the partial conversion of solid feedstock with gasification followed by gas conditioning, SNG synthesis and gas upgrading or similar processes to natural gas [65]. The same process for HESS regarding storage and power conversion occurs.

Virtual Battery Storage (VBS)

Virtual battery storage is considered a digital alternative to the typical physical storage methods. VBS utilises a smart energy metre to monitor the excess energy from the customer and create a note on the account. This allows for free energy buyback when the customer needs it, although the distribution charge still occurs. This means that the energy supplier generally still makes more money than the customer even though they are obtaining a 33% discount as typically the distribution charge makes up for 67% of the electricity price as seen in Europe [115]. Some advantages are no additional cost for participating customers, low investment cost for the energy supplier, no system connection fees, no environmental impact, immediate access, and zero maintenance.

Electric Vehicle Storage (EVS)

Electric vehicles (EVs) have emerged as a promising storage solution for excess energy. Their potential goes beyond personal transportation, encompassing vehicle-to-grid (V2G) technology and applications such as electric buses and taxis [94].

V2G technology enables EVs to store excess energy from renewable sources like solar and wind power and act as decentralised storage, which can be discharged back to the grid during peak demand periods or when renewable generation is limited [95]. This bidirectional flow of energy not only supports grid stability but also allows EV owners to participate in demand response programmes and potentially generate revenue.

Electric buses are a particularly attractive application of EV energy storage. With their large battery capacities and predictable driving patterns, electric buses can serve as mobile energy storage units, providing grid support during peak hours and reducing the need for additional grid infrastructure. Real-life examples of V2G and electric bus energy storage projects can be found in countries like China, Japan, and the United States [116].

Various cities worldwide are implementing V2G (vehicle-to-grid) programmes to optimise energy usage and enhance grid stability. In Shenzhen, China, electric taxis store excess energy during off-peak hours and release it back to the grid during peak demand periods, reducing reliance on fossil fuels. In Yokohama, Japan, electric buses store renewable energy during the day and discharge it back to the grid during peak evening hours, reducing the need for additional power plants. In San Diego, USA, a pilot project involves electric school buses storing energy from the grid during the day and releasing it back at night, providing grid support and reducing energy costs [99]. These V2G programmes exemplify the integration of electric vehicles with the power grid, promoting sustainable energy solutions and grid resilience.

Some challenges with Electric Vehicle Storage (EVS) are as follows:

• Standardisation of V2G technology: There is currently a lack of standardisation for vehicle-to-grid (V2G) technology, which makes it difficult for different types of EVs and charging stations to communicate and interact with each other;
• Efficient energy management systems: Efficient energy management systems are needed to optimise the charging and discharging of EVs due to the limited cycles the battery can handle before replacement, maximise the use of renewable energy, and minimise the strain on the grid. Developing these systems is a complex challenge that requires careful consideration of a variety of factors, including the availability of renewable energy, the demand for electricity, the cost of replacement batteries, the cycle life of the EV battery, and the cost of energy storage;
• Establishment of regulatory frameworks: Supportive regulatory frameworks are needed to encourage the adoption of EV energy storage. These frameworks should provide clear and consistent rules for the operation of V2G technology and the integration of EVs into the grid [99,117]. They should also address issues such as liability, data privacy, and cybersecurity.

Some opportunities with Electric Vehicle Storage (EVS) are as follows:

• Grid stability: EVs can help to stabilise the grid by providing a source of flexible demand and power supply. When there is excess renewable energy available, EVs can be charged. When there is a shortage of renewable energy, EVs can discharge their batteries to provide power to the grid and improve stability;
• Emissions reduction: EVs can help to reduce emissions by displacing fossil fuel-powered vehicles. This can have a significant positive impact on air quality and public health. In addition, EVs can help to reduce greenhouse gas emissions, which contribute to climate change mitigation;
• Sustainability: EVs can promote sustainability in transportation and energy systems. By reducing our reliance on fossil fuels, EVs can help to create a more sustainable future [27,29,118].

Overall, the challenges and opportunities of EV energy storage are significant. By addressing the challenges and seizing the opportunities, we can create a more sustainable and resilient energy system.

2.3.8. Heterogeneous Energy Storage

There has been some research into using multiple heterogeneous types of CES technology at a given site which complement each other due to their varying performance and capacity differences. Sometimes the terms “hybrid storage” or “polystorage” [119] are used to refer to multiple heterogeneous types of storage. The paper [120] is an early review of the topic; it includes the critical observation that high power storage is associated with fast response times while high energy storage is associated with slow response times. This is the basis of the battery (low specific power, high specific energy) and supercapacitor (high specific power, low specific energy) combination proposed for electric vehicles and renewable energy systems. Other studied combinations in that paper include battery/SMES and battery/flywheel. The paper also includes a description of the various architectures for connecting multiple storage units, including passive parallel, cascade and active parallel.

In [51,121], the authors compared the combination of a lead acid battery and vanadium redox battery for energy storage to an equivalent single-type battery. They used a Reinforcement Learning (RL) machine learning algorithm for charging coordination between the different battery types to show that the combination could achieve better efficiency. They also pointed out some of the disadvantages of such a scheme, such as the requirement for multiple distinct charge controllers and computationally intensive coordination (which increases with the number of energy storage systems). Similarly, the study in [122] demonstrated the advantage of using two heterogeneous batteries with slow and rapid responding batteries, without specifying their exact type.

2.3.9. Summary

Figure 7 below summarises the technology section and highlights the power rating and time constants for the above-mentioned technologies where applicable.

3. Applications

CES can benefit utilities and end-users. This section discusses both of these use cases.

3.1. Increased Self-Sufficiency

CES at the distribution level allows the local community to be less reliant on the grid since electricity can be harnessed from the storage even if the grid connection is offline. While the same is true for personal individual storage, Community Energy Storage affords a larger scale offering which can improve the self-sufficiency of whole communities. CES deployed at the distribution level empowers local communities to become less reliant on the main grid. During outages, electricity can be sourced from the storage system, enhancing community resilience [123]. This benefit is particularly significant in areas prone to power disruptions [124]. While individual solar battery storage provides similar self-sufficiency benefits for homes, CES offers a larger-scale solution. This translates to increased power availability for the entire community during grid outages.

3.2. Lower Bills and/or Increased Self Consumption

Electricity can be stored when there is a surplus (e.g., during daytime for local solar photovoltaic installations) and/or when grid prices are low (or even negative) and used in place of grid-supplied electricity when grid prices are high [125,126,127]. This promotes lower electricity bills and increased usage of electricity when needed. By storing excess renewable energy from sources like solar and wind, CES facilitates greater self-consumption of clean energy within the community [23,45,123,127,128]. This reduces reliance on fossil fuel-based generation and contributes to environmental sustainability.

3.3. Ancillary Services

Ancillary services are the ongoing support services that provide stability and security to grid operations over various timescales. Voltage and frequency regulation are two prime examples [8,129,130]. Historically, bulk generators have provided these [131,132]. However, as the penetration of distributed renewable generation increases, the need for other methods of providing ancillary services increases because of the volatility and unpredictability of such generation sources [133,134]. Distributed energy storage provides an alternative means of offering ancillary services to bulk generators [89,131,135], with batteries usually being the preferred storage type because of their quick response time [54,130]. However, storage owners usually require an incentive to participate in the scheme.

3.4. Demand Response

CES provides significant benefits in demand response, improving flexibility and reducing reliance on backup generators. It allows customers to seamlessly switch from grid power to stored energy during peak demand periods or emergencies, enhancing the grid’s ability to manage demand and supply fluctuations [89,131,135]. CES contributes to grid resilience, optimised energy management, and offers financial incentives to customers [136]. It aligns with the evolving energy landscape, supporting the integration of renewable energy sources and distributed generation [137,138]. By adopting CES, customers can actively participate in the transformation of the electric grid and contribute to a sustainable and resilient energy future [138,139,140,141].

Table 5. Global overview of demand response and their equivalent names.

Country	Emergency Demand Response	Economic Demand Response	Ancillary Services Demand Response
Australia	RERT	WDR	FCAS
USA	Emergency Demand Response Programme (EDRP)/(ELRP)	Day-Ahead Demand Response Programme (DADRP)	Frequency Regulation Ancillary Services (FRASs)
Canada	Direct Control (DR Control Events)	Real-Time Pricing (RTP)	Automatic Generation Control (AGC) Programmes
Europe	Network Constraint Events (NCEs)	Demand Response Activation (DRA)	Frequency Containment Reserve (FCR)
Japan	Emergency Demand Response (EDR)	Demand Charge Management Programme	Frequency and Voltage Support Services
India	Emergency Load Response Programme (ELRP)	Demand Response (DR) Programmes	Frequency Regulation Ancillary Services (FRASs)
China	Emergency Power Curtailment Programme	Demand Side Management (DSM)	Frequency Regulation Ancillary Services Market (FRASs)

below shows the diverse terminology used globally for the term “Demand Response” [138,139,140,141].

3.5. Bulk Energy Applications

Bulk energy applications are crucial for managing large variations in the grid. Two of the most common types can be found below: energy arbitrage connected at the supply side and peak shaving integrated at the consumer side.

3.5.1. Energy Arbitrage

Energy arbitrage focuses on the financial advantage that can be achieved when storing energy at a low buy price and selling at peak times when the cost of energy is high. This also enables the efficiency to increase and economic optimisation [142,143,144]. The financial arbitrage that occurs is often utilised as an incentive for owners to invest in energy storage as it offsets the cost and provides a Return on Investment (ROI).

3.5.2. Peak Shaving

Peak shaving on the other hand has limited financial motivation for the consumer like energy arbitrage and instead is focused on offsetting the peak load during busy times [145]. Peak shaving also has some other advantages being that the overall capacity of the generation system is reduced to normal capacity as the peak demand is now handled by the ESS, thus reducing the investment required by the utility company [144,146].

3.6. Summary

Figure 8 summarises various CES technologies and their suitability for specific applications using a traffic light analogy (green = suitable; yellow = semi-suitable; red = not well suited).

4. Ownership and Market Regulation

The ownership and market participation landscape for CES is complex with global and regional variations. In Europe, a cooperative paradigm is prevalent, with community-owned entities and cooperatives taking centre stage. Germany’s Energiewende (energy transition) serves as a prime example, where citizen-owned renewable energy cooperatives have flourished [27,29,30,31]. The United States, on the other hand, leans towards third-party ownership models, with a growing presence of utilities investing in and operating CES facilities.

Regulators play a pivotal role in shaping this landscape. Clear guidelines are needed to define ownership structures, participation rights, and transparent revenue distribution mechanisms for CES participants. This could involve establishing frameworks for community microgrids, outlining ownership rights for stored energy, and defining participation models for residents and businesses in electricity markets. Additionally, regulators need to be vigilant in addressing potential anti-competitive practices by established players in the energy sector, ensuring a level playing field for new entrants and innovative business models in the CES space.

For instance, California, a leader in renewable energy adoption, has implemented regulations that allow community choice aggregators (CCAs) to invest in and operate CES facilities. This regulatory framework empowers communities to have a say in their energy choices and potentially benefit from cost savings associated with local energy storage [147]. On a global scale, organisations like the International Renewable Energy Agency (IRENA) are advocating for best practices and regulatory frameworks that promote community ownership and democratic participation in the energy sector, paving the way for a more inclusive and sustainable energy future [148].

However, ensuring fair market participation goes beyond ownership structures. Regulators also need to address issues related to interconnection costs and technical requirements for CES to participate in electricity markets. Standardisation efforts by organisations like the International Electrotechnical Commission (IEC) with its IEC 62933 series and the Institute of Electrical and Electronics Engineers (IEEE) with its IEEE 1547 series are crucial in this regard. These standards provide a common language for safe and efficient interconnection of distributed energy resources like CES with the grid, outlining technical specifications for communication protocols, protection schemes, and islanding prevention [94,119,148,149,150]. By adopting these standards and establishing clear guidelines for grid interconnection, regulators can facilitate seamless integration of CES into the broader energy system, unlocking its full potential to improve grid stability and market efficiency.

5. Investment Incentives

A multitude of investment incentives are being employed globally to stimulate CES adoption. Tax credits, grants, feed-in tariffs for stored energy, and rebates on battery storage systems are some of the most prevalent tools [27,29]. An overview is shown below:

• Europe: The European Union (EU) has established ambitious renewable energy targets and is actively promoting CES through various initiatives. For example, Germany’s “KfW Battery Storage Programme” offers attractive loans and grants for battery storage projects, including CES facilities [147];
• North America: In the United States, several states, including California and New York, have implemented investment incentive programmes specifically targeting CES deployment. These programmes often combine tax credits with rebates on battery storage costs, making CES a more financially viable option for communities [148];
• Australia: The federal government has committed significant resources to accelerating CES deployment. A recent AU$200 million funding round allocated through the federal budget specifically targets community battery storage projects [147]. This programme provides grants for the installation of multiple battery storage systems connected to the same distribution network, fostering the development of community-owned CES facilities.

While investment incentives play a crucial role in initiating the CES market, effective regulations are essential to ensure their long-term success. Here are some key considerations:

• Programme Design: Regulatory frameworks should establish clear and consistent investment incentive programmes with well-defined eligibility criteria and application processes. These programmes should be designed to attract diverse investors, including utilities, community organisations, and private businesses;
• Cost-Effectiveness: Regulators need to ensure that investment incentives are cost-effective and do not create unsustainable burdens on ratepayers. Metrics for measuring the success of incentive programmes should be established, allowing for adjustments and programme optimisation over time;
• Market Distortion Mitigation: Incentive programmes should be carefully designed to avoid distorting the market or creating unfair advantages for specific technologies. Technology neutrality can be achieved by focusing on performance-based incentives that reward projects based on their ability to deliver specific grid benefits.

Effective regulatory frameworks can amplify the impact of investment incentives. For instance, regulations that streamline permitting processes for CES projects in Australia can significantly reduce development costs and enhance the attractiveness of these projects for investors who benefit from the financial incentives.

Furthermore, aligning investment incentives with broader regulatory goals, such as carbon emission reduction or grid modernisation objectives, can create a synergistic effect, accelerating the transition towards a cleaner and more resilient energy system.

6. Grid Integration and Standards

Ensuring safe and efficient integration of Community Energy Storage (CES) with the grid necessitates a multi-pronged approach, encompassing robust regulatory frameworks, the adoption of relevant grid integration standards, and a forward-thinking approach that fosters innovation.

Several international standards play a crucial role in promoting safe and seamless CES integration across the globe. The International Electrotechnical Commission (IEC) has established the IEC 62933 series, which outlines a comprehensive set of safety requirements for photovoltaic (PV) systems. Since CES is often co-located with rooftop solar panels, this standard plays a vital role in ensuring the electrical safety of these integrated systems [151].

Furthermore, the Institute of Electrical and Electronics Engineers (IEEE) has developed the IEEE 1547 series, a collection of standards that define technical specifications for communication protocols and grid interconnection requirements for Distributed Energy Resources (DERs) like CES. These standards establish a common language for communication between DER units and the grid, ensuring proper system operation and mitigating potential safety hazards associated with uncontrolled islanding of power quality issues [105,152].

Australia, with its ambitious renewable energy targets and a growing community energy sector, presents a unique case study in grid integration considerations for CES. The country’s National Electricity Market (NEM), overseen by the Australian Energy Market Operator (AEMO), plays a central role in establishing the technical requirements for CES participation within the grid. AEMO’s grid connection rules serve as a critical regulatory document, outlining the technical specifications and processes that CES projects must adhere to connect to the grid [153,154,155].

Beyond AEMO’s grid connection rules, national standards and codes play a vital role in ensuring the safety and functionality of CES in Australia. Standards Australia (SA) and the Australian Energy Market Commission (AEMC) are the principal organisations responsible for developing and administering these national standards and codes. Some of the most relevant standards for CES integration include:

• AS/NZS 4777.2: Grid connection of energy systems via inverters–inverter requirements: This standard focuses on the technical specifications for inverters used in grid-connected systems, ensuring they operate within safe parameters and contribute to overall grid stability [153];
• AS/NZS 5033: Installation of photovoltaic (PV) arrays: As mentioned earlier, CES is often co-located with rooftop solar panels. This standard outlines the installation requirements for PV arrays, ensuring their safe and reliable operation, which is particularly important when integrated with battery storage systems [151];
• AS/NZS 5139: Electrical installations—Safety of battery systems: This standard delves into the specific safety requirements for battery systems, addressing critical aspects like lithium-ion battery chemistry considerations, electrolyte leakage prevention, and thermal runaway mitigation strategies [23,70,105,152].

The Australian regulatory framework for CES grid integration needs to strike a delicate balance between clear and transparent rules, necessary for grid stability and safety, and fostering innovation in CES technologies and business models. Here are some key considerations:

• Clarity and Transparency: AEMO and AEMC need to ensure that grid connection rules and relevant standards are clear, readily accessible, and regularly reviewed to reflect the evolving nature of CES technologies. This clarity is crucial for investors, developers, and network operators to navigate the regulatory landscape effectively;
• Alignment with International Standards: While Australia develops its own regulatory framework, maintaining alignment with established international standards like the IEC 62933 and IEEE 1547 series offers several benefits. This alignment fosters compatibility of CES equipment with global best practices, facilitates knowledge sharing, and attracts investment in the Australian CES market;
• Innovation-Friendly Framework: Regulations should be designed to accommodate the dynamic nature of the CES sector and technological advancements. A flexible and innovation-friendly regulatory framework will ensure that Australia remains at the forefront of CES development and deployment.

7. Environmental and Safety Regulations

7.1. Challenges

The following are some environmental and safety challenges concerning CES:

• Environmental Impact: The environmental footprint of CES needs to be carefully evaluated throughout its lifecycle. Lithium-ion batteries, currently the dominant technology for CES, raise concerns regarding potential environmental impacts associated with mining raw materials, battery manufacturing processes, and end-of-life disposal [156].
• Lithium-Ion Battery Safety: Lithium-ion batteries, while offering high energy density, pose potential safety hazards, including thermal runaway and fire risks. A 2019 incident involving a large-scale lithium-ion battery fire at an Arizona Public Service (APS) facility in the United States highlights the importance of robust safety measures [152]. Regulations need to establish clear safety standards for battery storage systems, encompassing fire protection requirements, ventilation protocols, and emergency response procedures.

7.2. Possible Regulatory Solutions

The following are some possible regulatory solutions to these challenges:

• Life Cycle Assessments (LCAs): Regulatory frameworks should encourage life cycle assessments (LCAs) for CES projects. These assessments provide a holistic understanding of the environmental impact of CES, encompassing resource extraction, manufacturing, operation, and decommissioning. The European Commission has established a comprehensive framework for conducting environmental impact assessments (EIAs) for large-scale projects, which can be adapted for CES projects [157];
• Sustainable Material Sourcing: Regulations can play a role in promoting the use of sustainably sourced materials for battery production. Additionally, fostering research and development of alternative battery chemistries with less harmful environmental footprints is crucial. California, a leader in battery storage adoption, has implemented regulations that require manufacturers to disclose the recycled content of electric vehicle batteries, promoting the use of recycled materials in battery production [24,26,32];
• Battery Management Systems (BMSs): Regulations should mandate the use of robust BMSs for CES facilities. These systems play a critical role in monitoring battery health, temperature, and state of charge, mitigating potential safety risks associated with battery degradation or malfunctions. The Institute of Electrical and Electronics Engineers (IEEE) has developed the IEEE 1743 series of standards, which outline technical specifications for battery management systems, providing a valuable reference point for regulators [14,158];
• Community Awareness and Emergency Preparedness: Regulations should encourage clear communication and community outreach programmes regarding CES safety. Residents living near CES facilities should be informed about potential risks and appropriate emergency response procedures. For instance, Germany requires operators of large battery storage facilities to develop emergency response plans that are communicated to local communities [118].

Australia’s regulatory framework for CES environmental and safety considerations is evolving alongside the CES market. Several key initiatives are noteworthy:

• The National Battery Strategy: Launched in 2021, this strategy outlines a framework for a sustainable battery industry in Australia, focusing on responsible battery use, recycling, and second-life applications [31]. The strategy emphasises the importance of life cycle assessments, research into sustainable battery materials, and the development of a national battery recycling scheme;
• The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act): This act, while not solely focused on CES, plays a role in ensuring environmental impact assessments are conducted for large-scale energy projects, potentially including some CES facilities. The act requires proponents of major projects to undertake rigorous environmental impact assessments, considering potential impacts on biodiversity, water resources, and air quality.

Effective regulation of CES environmental and safety aspects requires collaboration between various stakeholders. Here are some key considerations:

• Harmonisation of International Standards: Collaboration between regulatory bodies like Australia’s Department of the Environment and Energy and international organisations like the International Renewable Energy Agency (IRENA) can foster the harmonisation of environmental and safety standards for CES. IRENA can play a pivotal role in knowledge sharing and promoting best practices for sustainable energy storage deployment [24];
• Industry Best Practices: Encouraging and adopting industry best practices for battery life cycle management, recycling, and safe operation of CES facilities is crucial. Organisations like the American Chemistry Council (ACC) [158] and the Battery Council International (BCI) [118] have developed industry best practices for battery safety and sustainability, which can serve as valuable resources for Australian regulators;
• Transparency and Public Engagement: Regulatory processes and decision-making regarding CES projects should be transparent and involve public engagement. Educating the public about the potential environmental and safety aspects of CES fosters trust and acceptance of this technology.

8. Discussion

In this extended section, we delve deeper into the future directions, challenges, and opportunities of Community Energy Storage (CES), building upon our comprehensive review of the subject matter. Our aim is to spur further innovation in the field of CES by raising and discussing important research questions. Those questions are not attempted to be answered in this paper.

8.1. Storage Sizing and Composition

As CES encompasses a diverse range of applications, each with unique requirements, a fundamental question arises: should a CES site maintain an array of heterogeneous storage technologies to cater to these requirements or opt for a single (larger) homogeneous storage technology to achieve economies of scale in capital and operating expenses? This consideration parallels similar debates in other contexts, such as the trade-offs between the speed and volatility of different computer memory technologies and their associated costs. While there may not be a universal answer, understanding the advantages and disadvantages of various compositions of storage technologies will be crucial in optimising CES systems.

8.2. Storage for Final Usage

The intended final use of the stored energy can also influence the choice of storage technology. For instance, if it is known that a specific amount of excess generated energy will be utilised in a hydrogen-powered vehicle, it may be advantageous to store the energy in a hydrogen-based energy storage system. This approach eliminates the need for additional energy conversions later, potentially increasing efficiency and reducing costs.

8.3. Demand Response

Historically, demand response has involved customers either deferring certain activities or switching to backup generators during peak demand periods. However, CES introduces a new possibility: customers can switch to input from CES instead of relying on backup generators. This raises the question of how CES-based demand response can be seamlessly integrated with existing demand response programmes, considering factors such as pricing mechanisms, communication protocols, and regulatory frameworks.

8.4. International Collaboration and Standards

International collaboration on power standards has played a significant role in harmonising national mains voltages and creating larger overall markets. We can anticipate similar developments in the realm of CES. However, it remains to be explored what specific international standards will be required for CES, and how they will impact the global deployment and interoperability of CES systems.

8.5. Peak Shaving

Peak shaving using CES can effectively manage peak demand on the grid. However, it raises concerns about the potential impact on overall generation capacity. If peak shaving leads to a decrease in generation capacity, it could compromise reliability during unexpected high-demand periods. Striking the right balance between peak shaving and maintaining sufficient generation capacity for optimal grid management is a key challenge that needs to be addressed.

8.6. Off-Grid and Remote Communities

Much of the focus on CES has been on grid-connected applications. However, the potential role of CES in off-grid and remote communities deserves attention. These communities often face unique challenges, such as intermittent or unreliable access to electricity, high energy costs, and limited infrastructure. Exploring how CES can address these challenges and provide sustainable and affordable energy solutions in off-grid and remote settings is a promising area for future research and development.

8.7. Technological and Regulatory Advances

The field of CES is undergoing rapid technological advancements, with emerging technologies such as solid-state batteries holding great promise. These advancements are likely to reshape how CES is deployed, particularly in terms of the sizing and composition of storage media. In addition to technological advances, regulatory frameworks need to keep pace to support the integration of CES into existing energy systems. Developing appropriate regulatory policies and incentives that encourage the adoption of CES while ensuring consumer protection and grid stability is a crucial challenge that policymakers need to address.

8.8. Future Directions

The following are some possible future directions for CES:

• Integration with Renewable Energy Sources: Investigate seamless integration of CES with renewable energy sources such as solar, hydro, and wind power to create a reliable and sustainable energy supply;
• Advanced Materials and Technologies: Develop advanced materials and technologies to enhance the efficiency, capacity, and longevity of CES systems;
• Cost-Effective Solutions:
  Explore cost-effective approaches to make CES economically viable and competitive with traditional energy storage methods;
• Policy and Regulatory Frameworks: Advocate for supportive policy and regulatory frameworks that encourage the adoption and deployment of CES technologies.

8.8.1. Challenges

The following are some possible challenges for CES associated with the future directions:

• Scalability and Deployment: Address the challenges associated with scaling up CES technologies from the lab to commercial-scale deployment;
• Environmental Impact: Assess and mitigate the potential environmental impacts of CES, including land use, water consumption, and greenhouse gas emissions;
• Public Perception and Acceptance: Engage with stakeholders and the public to address concerns and build trust in CES technologies.

8.8.2. Opportunities

The following are some possible opportunities for CES associated with the future directions:

• Grid Stabilisation and Reliability: Harness CES to enhance grid stability, reduce the need for fossil fuel-based backup power, and improve the reliability of the electricity supply;
• Decarbonisation of Industries: Utilise CES to decarbonise energy-intensive industries such as steel, cement, and chemicals, contributing to global climate change mitigation efforts;
• Energy Security and Independence: Promote energy security and independence by reducing reliance on imported fossil fuels and increasing the use of domestic energy resources;
• Economic Growth and Job Creation: Stimulate economic growth and create jobs through the development and deployment of CES technologies.

Through the examination of future directions, challenges, and opportunities in Community Energy Storage (CES), we endeavour to stimulate ongoing research, development, and innovation in this broad field. Our aspiration is to cultivate a more sustainable, resilient, and equitable energy system that fully leverages the potential of CES.

9. Conclusions

In conclusion, this review of Community Energy Storage (CES) demonstrates its multifaceted nature and transformative potential within the global energy landscape. The diverse array of technologies, ownership models, and regulatory frameworks underscores the adaptability of CES to meet the unique needs of various communities. However, realising the full potential of CES requires a holistic approach that addresses both technical and socio-economic challenges.

The continuous advancement of energy storage technologies, from traditional batteries to cutting-edge innovations such as virtual batteries, offers promising pathways for enhanced efficiency, flexibility, and scalability. Yet, these advancements must be coupled with a deep understanding of local contexts, community values, and regulatory landscapes to ensure equitable access and distribution of benefits. A critical next step is to transition from technological feasibility to widespread implementation, emphasising the need for robust policies that incentivise investment, streamline regulatory processes, and foster community engagement.

The global community’s energy storage landscape is dynamic, with each continent offering unique approaches shaped by local needs, resources, and priorities. North America leads in large-scale adoption and regulatory support, while Europe emphasises community initiatives and smart city integration. Asia is marked by the diverse strategies of major economies such as China, Japan, and South Korea. In Africa, CES promises to address energy access challenges, while South America struggles with economic constraints and varying levels of infrastructure. Oceania demonstrates a strong commitment to residential energy storage solutions, especially in Australia.

Additionally, the prospective trajectory of CES is intricately linked to its integration with broader energy systems and societal aspirations. This imperatively calls for a fundamental shift away from compartmentalised approaches, necessitating interdisciplinary collaboration among experts from engineering, social sciences, economics, and policymaking. Through the convergence of these diverse perspectives, we can harness the full potential of CES as a transformative force in shaping a more decentralised, resilient, and equitable energy future.

This review highlights the significant advancements attained in the research and development of CES, while underscoring the imperative for continued innovation and collaborative endeavours to address outstanding challenges. CES possesses the inherent capacity to empower communities, democratise energy access, and bolster the resilience and adaptability of the energy system, as we collectively strive toward a sustainable and decarbonised energy future. By prioritising equitable access, technological advancement, and the adoption of integrated systems thinking, CES can serve as a transformative agent in shaping a more promising energy future for successive generations.