Energy storage involves methods and apparatus used to store heating, cooling, or power. In district energy applications these encompass a wide variety of applications, but all are designed to be recharged on a cyclical basis (usually daily, occasionally seasonally) and fulfill one or more of the following purposes:

* Increase system generation capacity: Demand for heating, cooling, or power is seldom constant over time, and the excess generation available during low demand periods can be used to charge the energy storage apparatus in order to increase capacity during high demand periods. This allows a smaller production unit to be installed (or to add capacity without purchasing additional units) and results in a higher load factor on the units.

* Enable dispatch of cogeneration plants: Combined heat and power, or cogeneration, plants are generally operated to meet the demands of the connected thermal load, which often results in excess electric generation during periods of low electric use. By incorporating thermal energy storage, the plant need not be operated continuously and can be dispatched within some limits.

* Shift energy purchases to low cost periods: This is the demand-side application of the first purpose listed, and allows an energy consumer subject to time-of-day pricing to shift energy purchases from high cost to low cost periods.

* Increase system reliability: Any form of energy storage, from a small personal computer uninterruptible power supply (UPS) to a large pumped storage project, will almost certainly increase system reliability.

* Integration with other functions: In applications where on-site water storage is needed for fire protection, it may be feasible to incorporate thermal storage into a common storage tank. Likewise, apparatus designed to solve power quality problems may be adaptable to energy storage purposes as well.

Energy storage as a natural process is billions of years old - the energy produced in the initial creation of the Universe has been stored in stars such as our Sun, and is now being used by humans directly (e.g. through solar cells) or indirectly (e.g. by growing crops). As a purposeful activity, energy storage has certainly existed since pre-history, though it was often not recognized as such. An example would be the use of logs or boulders as defensive measures in ancient forts - the logs or boulders would be collected at the top of a hill, and the energy thus stored would be released as a defense against invaders.

A more recent application was the control of waterways to power water mills for processing grain or powering machinery. Often complex systems of reservoirs and dams were constructed to store and release water (and the potential energy it contained) when required.

Energy storage only became a major concern, however, with the introduction of Electricity. Unlike the other common power sources at the time, such as natural gas, electricity had to be used as it was generated. This meant that changes in demand were difficult to cater for without either cutting supplies at times, or having expensive excess capacity.

Some areas of the world (Washington and Oregon in the USA, and Wales in the United Kingdom are examples) have used geographic features to store large quantities of water in reservoirs at the top of hills, using excess electricity at times of low demand to pump water into the reservoirs, then letting the water fall through generators to retrieve the energy when demand peaks.

A number of other technologies have been investigated, but to date no widely available, affordable solution to the challenge of mass energy storage has been found.