Energy storage is accomplished by devices or physical media that store some form of energy to perform some useful operation at a later time. A device that stores energy is sometimes called an accumulator.
All forms of energy are either potential energy (e.g. Chemical thermodynamics, gravitational, electrical energy, etc...) or kinetic energy (e.g. thermal energy). A wind-up clock stores potential energy (in this case mechanical, in the spring tension), a battery stores readily convertible chemical energy to operate a mobile phone, and a hydroelectric dam stores energy in a reservoir as gravitational potential energy. Ice storage tanks store ice (thermal energy) at night to meet peak demand for cooling. Fossil fuels such as coal and gasoline store ancient energy derived from sunlight by organisms that later died, became buried and over time were then converted into these fuels. Even food (which is made by the same process as fossil fuels) is a form of energy stored in chemical form.
Energy storage as a natural process is as old as the universe itself - the energy present at the initial formation of the universe has been stored in stars such as the Sun, and is now being used by humans directly (e.g. through solar heating), or indirectly (e.g. by growing crops or conversion into electricity in solar cells).
A more recent application is the control of waterways to drive water mills for processing grain or powering machinery. Complex systems of reservoirs and dams were constructed to store and release water (and the potential energy it contained) when required.
An early solution to the problem of storing energy for electrical purposes was the development of the battery as an electrochemical storage device. Batteries have previously been of limited use in electric power systems due to their relatively small capacity and high cost, however since about the middle of the first decade of the 21st Century newer battery technologies have been developed that can now provide significant utility scale load-leveling capabilities. A similar possible solution to deal with the intermittency issue of solar and wind energy is found in the capacitor.
Chemical fuels have become the dominant form of energy storage, both in electrical generation and energy transportation. Chemical fuels in common use are processed coal, gasoline, diesel fuel, natural gas, liquefied petroleum gas (LPG), propane, butane, ethanol and biodiesel. All of these materials are readily converted to mechanical energy and then to electrical energy using heat engines (via turbines or other internal combustion engines, or boilers or other external combustion engines) used for electrical power generation. Heat-engine-powered generators are nearly universal, ranging from small engines producing only a few kilowatts to utility-scale generators with ratings up to 800 megawatts. A key disadvantage to hydrocarbon fuels are their significant emissions of greenhouse gases that contribute to global warming, as well as other significant pollutants emitted by the dirtier fuel sources such as coal and gasoline.
Electrochemical devices called fuel cells were invented about the same time as the battery in the 19th Century. However, for many reasons, fuel cells were not well-developed until the advent of manned spaceflight (such as the Gemini Program in the U.S.) when lightweight, non-thermal (and therefore efficient) sources of electricity were required in spacecraft. Fuel cell development has increased in recent years due to an attempt to increase conversion efficiency of chemical energy stored in hydrocarbon or hydrogen fuels into electricity.
Grid energy storage (or large-scale energy storage) lets energy producers send excess electricity over the electricity transmission grid to temporary electricity storage sites that become energy producers when electricity demand is greater. Grid energy storage is particularly important in matching supply and demand over a 24 hour period of time.
See also: http://en.wikipedia.org/wiki/Energy_storage
Source: Wikipedia (All text is available under the terms of the GNU Free Documentation License and Creative Commons Attribution-ShareAlike License.)