Near San Diego, a huge battery facility has enough storage to provide 250 megawatts of power to the grid for an hour in the event of a blackout. At a smaller scale, buildings are also adopting their own batteries, using the on-site power to reduce costs during peak demand, better utilize renewable energy sources, and improve resilience. Giant batteries may still be a rare site at home or in the office, but that’s fast-changing.
In this newsletter, we’re taking a look at the intersection of buildings and energy: buildings as batteries. Turning buildings into intelligent, networked energy storage makes them more resilient, as well as improving the efficiency and reliability of the power grid as a whole.
Beyond concerns about the grid as a whole, there are strong forces pushing buildings to begin storing energy on-site. Energy from renewable sources has peaks and valleys, and since utilities charge more for electricity when demand is the highest. First, we’ll cover some ways buildings are already being used as batteries before taking a look at the technologies to watch and the obstacles facing the niche.
How are buildings already being used as batteries?
Buildings can store energy at different scales and in different situations. One type of thermal energy storage that buildings have used for millennia is the ability of the structure itself to hold onto heat throughout the day. Stone buildings have a large amount of thermal mass, meaning that they are slow to cool and slow to heat. A stone home in the summer radiates heat well after the sun goes down.
Today, building energy storage takes a few forms:
A diesel tank on-site, while sounding mundane, is one example
Water-based energy systems keep large volumes of water at hot or cold temperatures and then deploy this water for applications like cooling server farms or de-icing pipes
Compressed Air Energy Storage (CAES) pressurizes air, which is then used as energy later on. These projects often use natural or manmade caverns as part of their storage strategy
Batteries installed at the site. This includes traditional lithium-ion batteries as well as newer varieties to be used as a backup energy source or to power devices
On-site geothermal energy generation bypasses the need for storage by being readily available at all times
How is building-as-battery tech developing?
To really understand how buildings work as batteries, you have to understand the paradigm shift surrounding how buildings function as part of energy systems. Previously, buildings and power grids were discrete, fundamentally separate things. Now, things are different. The grid, the building, and even electric vehicles on-site can function as energy draws or providers in the right situations.
Additionally, even though installing batteries themselves at buildings is not new, it is not something that has received widespread adoption. Consequently, even straightforward installations of what would otherwise be fairly standard tech deployments make headlines. In Singapore, leading property firm City Development Group replaced its diesel generators with smart batteries. In the United States, one utility is pitching the installation of batteries in single-family homes as a solution to blackouts. In Barcelona, alongside on-site batteries and a new energy management software, one corporate building deployed a bi-directional charging system, allowing EVs parked at the property to feed the building during peak demand. Earlier this year, Tesla confirmed it would be moving to bi-directional chargers in 2025.
The technologies enabling that paradigm shift are varied. Broadly speaking, we’re witnessing developments in how energy is actually stored and used, and the arrival of grid-interactivity.
Energy storage systems
Storage systems themselves are the most obvious type of “building as battery” tech. Innovative tools are taking several approaches, from non-traditional materials to traditional lithium-ion batteries deployed in new ways. For instance, non-traditional thermal energy storage systems use materials like sand or volcanic rock to store energy as heat, which can be used to impact the building’s climate as necessary.
Building energy software
New digital twin software is required to help building managers utilize their innovative energy hardware. Building energy management software gives managers visibility into energy sources and draws, allows different components to receive or give power depending on need, and can include AI to help chart future demand. This software also enables reporting options for building owners, useful for compliances or sustainability certification purposes.
Grid-interactive buildings are ones that can communicate with the local power grid and adjust operations based on that data flow. The implications of this functionality are buildings and power grids that both become more efficient. Smart networked buildings can adjust their energy consumption based on pricing, and grids can draw from buildings’ systems when usage is at its highest. The result is an Autonomous Energy Grid, or AEG.
What are the biggest obstacles?
Buildings as batteries face a range of obstacles. First, installing on-site energy storage systems is expensive; in the $300-$400/kilowatt-hour range. There remain lingering challenges associated with battery supply chains. Both the raw materials used to manufacture batteries and actual battery manufacturing capability pose challenges, something that is also slowing production of EVs. Another, smaller-scale obstacle facing the hardware side of buildings as batteries is the question of where to install the batteries themselves. Rooftop batteries can meet with public opposition, buoyed by fears of exploding e-bikes.
Grid-interactive buildings with onsite energy storage offer a variety of benefits over normal buildings. They improve the resilience of the building by providing energy during grid failure. By holding or releasing energy at strategic times, they benefit the grid. As the need for battery power—for our cars, our devices, and our homes—becomes greater and greater, buildings will have an important role to play.
By storing energy for both on-site and grid-wide use, modern properties have the ability to benefit the grid itself while becoming more efficient in the process. With new technologies in a wide range of areas, buildings as batteries will only become more common. Costs and reluctance to change are hindrances facing adoption, but batteries at buildings are acknowledged as a necessary component of the clean energy goals of various jurisdictions. Alongside the renewable energy transition and municipal-scale battery plants as in San Diego, the beginnings of a new built environment system are beginning to emerge.
We at The Proptech Connection are seeing a lot of institutional interests in this topic and several of our clients, from Saudi-Arabia, Singapore, US and UK are looking how to leverage the most promising technologies across their estate.