Energy systems are changing rapidly. More renewable electricity is being added to the grid, industries are under pressure to reduce fossil fuel use, and buildings are becoming more active participants in the energy system. At the same time, one of the largest parts of the energy transition is still often underestimated: heat.
According to the International Energy Agency, heat accounted for almost half of global final energy consumption and 37% of energy-related CO₂ emissions in 2024. Heat is used in buildings, district heating networks, food production, industrial processes, materials manufacturing, chemical production, and many other sectors. This means that decarbonising heat is not a side issue. It is central to the transition toward a resilient, low-carbon energy system.
The challenge is that heat demand does not always match renewable energy availability. Solar and wind power vary during the day, across seasons, and with weather conditions. Electricity prices can also fluctuate significantly. As a result, future energy systems will need more than clean generation. They will need flexibility.
Thermal energy storage is one of the key technologies that can provide this flexibility.
What is thermal energy storage?
Thermal energy storage stores energy in the form of heat or cold so that it can be used later. Instead of storing electricity directly, energy can be stored by heating or cooling a material such as water, rock, sand, concrete, salts, phase-change materials, or other storage media.
The stored energy can later be used for space heating, hot water, industrial heat, district heating, cooling, or, in some configurations, power generation. The right storage technology depends on temperature level, storage duration, application, cost, integration needs, and safety requirements.
Thermal energy storage is not one single technology. It includes low-temperature, medium-temperature, high-temperature, and very-high-temperature systems. Some are already widely used, such as hot-water tanks and district-heating accumulators. Others are emerging for industrial heat, high-temperature storage, hybrid energy systems, and multi-vector energy hubs.
Why thermal storage matters now
There are three major reasons why thermal energy storage is becoming increasingly important.
First, renewable electricity creates new flexibility needs. When solar and wind production is high, energy may be cheap or even curtailed. When production is low and demand is high, electricity prices and grid stress can increase. Thermal storage can absorb electricity or recovered heat when it is available and dispatch useful heat later when needed.
Second, heat demand is often large, predictable, and local. Buildings, district heating networks, and industrial processes all require heat at specific temperature levels. This makes thermal storage particularly attractive because the stored energy can be used directly as heat, without always converting it back into electricity.
Third, batteries are not always the most economic solution for heat applications. Batteries are excellent for fast response, power balancing, and short-duration electrical services. But for large heat loads and longer storage durations, thermal storage can often provide a more suitable and cost-effective layer of flexibility.
The future energy system will therefore not rely on one storage technology alone. It will combine different storage layers for different time scales and applications.
Thermal storage and industrial decarbonisation
Industry requires large amounts of heat. In many sectors, heat is still produced using fossil fuels because industrial processes need reliable and continuous energy. Electrification can reduce emissions, but it can also increase pressure on the power grid if demand is not managed intelligently.
Thermal storage can help industry decouple heat demand from real-time electricity supply. A storage system can be charged when electricity is cheaper, when renewable generation is available, or when waste heat can be recovered. The stored heat can then be used later for process heat, preheating, steam generation, drying, or other thermal applications.
This makes thermal storage especially relevant for industries that have:
- regular heat demand,
- waste heat streams,
- exposure to volatile electricity or fuel prices,
- decarbonisation targets,
- grid-capacity constraints,
- interest in energy resilience.
For these customers, thermal storage is not only an environmental measure. It can become part of energy-cost control, operational resilience, and long-term competitiveness.
Thermal storage and district energy
District heating and cooling networks are natural platforms for thermal storage. They already move thermal energy between producers and users. By adding storage, these networks can better integrate renewable electricity, heat pumps, industrial waste heat, solar thermal energy, biomass, and other local energy sources.
Thermal storage can help district energy systems shift production away from peak hours, reduce dependence on fossil backup, use surplus electricity, and improve system stability. In this sense, district heating is not only a heating infrastructure. It can become a flexibility infrastructure.
This is particularly important in countries such as Sweden, where district heating, electrification, renewable energy, and industrial transformation are all part of the same energy transition.
From energy storage to energy infrastructure
The phrase “energy storage” can sometimes make thermal storage sound like an isolated component. But its strategic value is broader.
Thermal storage can act as infrastructure between:
- electricity and heat,
- buildings and the grid,
- industry and renewable energy,
- waste heat and useful energy demand,
- short-term price signals and long-term decarbonisation goals.
This is why thermal storage should increasingly be seen as a critical infrastructure layer. It enables energy systems to become more flexible, more resilient, and more integrated.
Why this matters for customers and investors
For customers, thermal storage can support lower energy costs, improved energy security, higher use of renewable energy, and reduced emissions.
For investors, thermal storage represents an infrastructure opportunity. The value is not only in the storage hardware, but in the ability to solve real system constraints: volatile prices, grid congestion, fossil-fuel dependency, waste heat losses, and rising demand for clean industrial heat.
The most attractive opportunities will likely be found where several value drivers overlap:
- high and stable heat demand,
- volatile electricity prices,
- available renewable electricity or waste heat,
- grid or capacity constraints,
- clear decarbonisation pressure,
- customers willing to validate new energy infrastructure.
Conclusion
Thermal energy storage is moving from a technical option to a strategic infrastructure need. As energy systems become more renewable, electrified, decentralised, and flexibility-dependent, the ability to store and dispatch heat will become increasingly valuable.
The next phase of the energy transition will not be won by generation technologies alone. It will depend on how intelligently energy is stored, converted, integrated, and used.
Thermal energy storage will be one of the critical building blocks in that system.
References
- International Energy Agency (IEA), Renewable heat – Renewables 2025. https://www.iea.org/reports/renewables-2025/renewable-heat
- International Renewable Energy Agency (IRENA), Innovation Outlook: Thermal Energy Storage, 2020. https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Nov/IRENA_Innovation_Outlook_TES_2020.pdf
- European Commission, Heating and Cooling. https://energy.ec.europa.eu/topics/energy-efficiency/heating-and-cooling_en
- Swedish Energy Agency, Flexibilitet i energisystemet. https://www.energimyndigheten.se/energisystem-och-analys/energisystem-och-analys/flexibilitet-i-energisystemet/
- Energiforsk, Termiska energilager. https://energiforsk.se/program/termiska-energilager/
- Scipioni, R., Gil Bardají, M. E., Barelli, L., Baumann, M., & Passerini, S. (eds.), Hybrid Energy Storage: Case Studies for the Energy Transition, Springer, Lecture Notes in Energy, 2026. https://doi.org/10.1007/978-3-031-97755-8
- International Energy Agency (IEA), District Heating. https://www.iea.org/energy-system/buildings/district-heating