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Glossary · Energy industry & energy transition

Large-scale thermal energy storage

Large-scale heat storage thermal storage district heating power-to-heat seasonal storage heat transition

A large-scale thermal energy storage system is a technical facility that absorbs heat on a large scale, holds it for a period of time and releases it again later. The heat goes to a heat network, an industrial process or a group of buildings. This does not mean the domestic hot water or buffer tanks of individual houses, but facilities for many consumers or large sites. Depending on the design, the storage duration ranges from a few hours through several days to several months. The storage system does not generate additional energy. It only shifts the time at which existing heat is used.

Key parameters: energy, power, temperature

What is stored is thermal energy. It is stated in kilowatt hours, megawatt hours or gigawatt hours. This must be distinguished from thermal power, which indicates how quickly heat can be charged or discharged. Both values are important for operation. The storage capacity determines how long the storage system can supply heat. The power determines whether it can cover short load peaks or absorb fluctuating generation. A storage system with a large volume but small connections and pumps can therefore only be charged and discharged slowly.

In water storage systems, the energy content depends on the volume and on the usable temperature spread, that is, the difference between flow and return temperatures. As a rule of thumb, one cubic metre of water stores around 1.16 kWh per kelvin of temperature difference. With a spread of 40 K, that is about 46 kWh per cubic metre. A storage system of 60,000 cubic metres operating between about 90 °C and 40 °C arithmetically reaches an order of magnitude of 3.5 GWh per full charge. It follows that low return temperatures in the network increase the usable capacity without the tank having to grow. For this to work, the storage system needs stable temperature stratification: hot water at the top, cooler water at the bottom, with as little mixing of the two as possible.

Integration into district heating and the heat transition

Large-scale thermal storage systems usually belong to district heating, because many consumers are connected there to a shared network. The network spatially links generators, storage and consumers. Heat from combined heat and power, a large-scale heat pump, solar thermal energy, geothermal energy, industrial waste heat, waste incineration or power-to-heat can flow into the storage system. Generation and demand rarely coincide. Households need a lot of heat in the morning and evening, solar thermal energy delivers at midday and in summer, and heat pumps run most cheaply when electricity prices are low. With a storage system, a network can operate its generators more evenly, at lower cost or better aligned with the situation in the power grid.

Large-scale thermal storage systems show that the heat transition is more than the replacement of individual heating systems. In densely built-up areas, heat supply can be organised as infrastructure, with several sources, shared networks and storage. Whether and where a storage system makes sense is therefore increasingly clarified in municipal heat planning and in the transformation plans of network operators.

Distinction from electricity storage and building-level storage

In energy policy debates, large-scale thermal storage systems are often equated with electricity storage. This is misleading. A battery storage system takes in electricity and releases electricity. A large-scale thermal storage system takes in heat and releases heat. Without its own technology for converting heat back into electricity, it cannot feed electricity back into the grid. It affects the power system only indirectly: electricity is converted into heat when it is plentiful or cheap, and the heat is used later. A large-scale heat pump without storage, by contrast, usually has to run when heat is needed at that moment. Flexibility for the power system arises only from the interplay of electric heat generator, network, storage and suitable operating rules.

A large-scale thermal storage system differs from a buffer tank in a building in its size, integration and control. A buffer tank mainly stabilises the heating system on site. A large-scale thermal storage system, by contrast, can change the dispatch order of several generators, save fuel, smooth load peaks in the network and couple electric generators to electricity prices or to the situation in the power grid.

Designs and storage duration

  • Tank storage: aboveground steel tanks or concrete tanks containing water, usually for hours to a few days. Unpressurised tanks stay below 100 °C, while pressurised storage systems can be operated at higher temperatures. The larger the tank, the smaller its surface area in relation to its volume. This reduces the relative heat losses.

  • Pit thermal energy storage: large, sealed water basins in the ground with an insulated, often floating cover. They are suitable for seasonal storage. A well-known example is Dronninglund in Denmark: a basin of 60,000 cubic metres in a former gravel pit has been in operation there since May 2014. It is charged with summer solar heat up to about 90 °C. The maximum temperature is limited by the material of the sealing liner.

  • Borehole thermal energy storage: These store heat via a field of boreholes directly in rock or soil. They usually operate at lower temperatures and often need a heat pump for discharging.

  • Aquifer thermal energy storage: These use water-bearing rock layers underground. This requires suitable geology and a water-law permit.

A seasonal thermal energy storage system is intended to shift surpluses from summer, such as solar heat or waste heat, into the heating season. Such storage systems are technically demanding, require a lot of land or a suitable subsurface, and depend more heavily on local conditions than a tank does. The losses depend on temperature, insulation, surface area, storage duration and mode of operation. For Dronninglund, a long-term evaluation over five years reports a storage efficiency of around 90 percent. The authors attribute this, among other things, to the fact that the storage system was completely turned over more than twice per year. It thus serves not only seasonally but also in the short term. The value therefore cannot simply be transferred to every pit thermal energy storage system.

Significance for the power system

A growing share of heat supply is generated electrically. Large-scale heat pumps and power-to-heat plants such as an electrode boiler increase electricity consumption, but at the same time create controllable demand. If they run when there is a lot of wind and solar power and thereby fill the storage system, less renewable generation has to be curtailed. When electricity is scarce, they can be throttled while the storage system continues to supply the network. The storage system therefore does not shift the heat demand, but the electricity demand of heat generation, namely into periods of low residual load. It thereby contributes to the flexibility of the system. Similarly, it decouples CHP plants from the instantaneous heat demand: they can follow the electricity market, and the heat generated at the same time is stored temporarily.

Economics and responsibilities

The benefit of a storage system is made up of several effects. Expensive peak-load boilers run less often, low electricity prices become usable for electric heat generation, and less generation capacity has to be kept available. Whether the investment pays off depends on network size, temperature level, generation portfolio, electricity price structure, network charges, fuel and CO₂ prices, as well as on funding and regulation. Two misunderstandings are widespread. First: in relation to the energy stored, thermal storage systems are often significantly cheaper than batteries. However, the overall calculation also includes the plot of land, the structure, insulation, pumps, heat exchangers, permits and integration into the control room. Second: not every storage system should operate seasonally. In many networks, a storage system for hours or days delivers more than a seasonal storage system.

There is also an institutional problem. The power system benefits from flexible heat generation, but the investment is made in the heat sector. Municipal utilities, heat planners, network operators and industry do not automatically have the same incentives. Electricity tariffs, network charges, levies and funding rules help decide whether a storage system serves the overall system or only optimises operation on site.

Funding in Germany (as of November 2026)

The Combined Heat and Power Act (Kraft-Wärme-Kopplungsgesetz, KWKG) grants a bonus payment for newly built heat storage systems. In the version of 18 December 2025, the following conditions apply. The heat must predominantly come from CHP plants. Waste heat and renewable heat are treated equally, as long as the CHP share is at least 10 percent of the heat fed in. The average heat losses must be below 15 watts per square metre of tank surface area. In addition, approval by the BAFA is required. The bonus is 250 euros per cubic metre of water equivalent. For storage systems above 50 cubic metres, it is limited to 30 percent of the eligible investment costs, and to a maximum of 10 million euros per project. Storage systems that enter operation by 31 December 2026 are funded. Later commissioning is only possible if all permits are available by that date or, where none are required, the essential construction works have been bindingly commissioned. In both cases, the storage system must enter operation within four years thereafter.

In addition, the Federal Funding for Efficient Heat Networks (Bundesförderung für effiziente Wärmenetze, BEW) supports heat storage systems. In principle, all facilities that temporarily store heat in order to balance fluctuations between supply and demand are eligible, expressly including seasonal storage systems. A prerequisite is a heat network with more than 16 buildings or more than 100 residential units. In existing networks, a storage system is only eligible as an individual measure if a transformation plan is in place. The exact funding rates and procedures depend on the guideline currently in force and on the BAFA information sheet.

Sources

Related glossary entries

Edited by eCMS on 12.11.2026 05:05

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