Whilst the crisis in the Middle East poses a global energy problem, countries – and in particular those with the highest energy consumption – are exploring alternative solutions to ensure an adequate supply capable of meeting ever-increasing demand, driven by artificial intelligence (and more generally by the operation of data centres), at competitive costs. Strategies may vary, but in our view two are dominant:
1. reducing dependence on hydrocarbons, which can be achieved in various ways: expanding nuclear power or alternative energy sources;
2. changing hydrocarbon supply chains, even with a return to coal.
Europe has announced its intention to focus on green energy (with the big question mark over whether nuclear energy counts as such), meaning primarily renewables. It is well known, however, that this method of energy production is not programmable and therefore, in addition to being dependent on weather conditions for its generation (there must be sun or wind, favourable topographical and hydrological conditions, etc.), it must rely on storage systems to manage discrepancies between production and demand.
The latest developments in this sector come from Switzerland, with three different solutions for storing energy.
On the one hand, there is the proposal from Energy Vault, founded in the canton of Ticino. The idea is surprisingly simple: to use gravity as a means of energy storage. The system uses enormous concrete blocks that are lifted by a crane when electricity is abundant and cheap. The electrical energy is thus converted into gravitational potential energy. When the grid needs energy, the blocks are lowered in a controlled manner and the motors that move them act as generators, returning electricity.
The stated inspiration comes from pumped-storage hydroelectric power stations, which have been the most widespread form of energy storage for over a century. The difference is that solid masses are used instead of water. According to the promoters, this allows the system to be installed even in areas lacking mountains, lakes or significant water resources, using relatively inexpensive materials and with a lower environmental impact than electrochemical batteries. The region of Sardinia has expressed interest in this solution for plants to be located in the former mines of the Sulcis area.
It must also be said, to be fair, that the Energy Vault project, whose prototype was installed in Castione Arbedo, has found an even simpler implementation using water instead of solid material. But the underlying solution remains the same because it harnesses the gravitational force of the water through special tanks (called ‘drops’ because they are shaped like drops, each resembling an upside-down hot-air balloon).
This solution is actually different from the flow battery, which has also been tested in Switzerland at Finhaut in the canton of Valais. This is a pumped-storage power station, called Nant de Drance, carved out of the Swiss Alps. Here, the principle is still that of gravity, but applied to water in the traditional way it is used in a hydroelectric power station. During periods of excess energy production, water is pumped from a lower reservoir to an upper one; when demand rises, the water is released and flows through turbines that generate electricity. The facility, which cost around two billion euros and took fourteen years to build, is capable of storing vastly greater quantities than any gravity-based plant using concrete blocks, but requires major infrastructure such as the upstream and downstream reservoirs served by powerful pumping stations: it cannot therefore be installed just anywhere.
What makes Nant de Drance unique is the plant’s gigantic scale. The power station is located approximately 600 metres below the mountain and features six pump-turbine units, each with a capacity of 150 MW, giving a total output of 900 MW – comparable to that of a medium-sized nuclear power station.
To understand the sheer scale of this project, we should also highlight its storage capacity: around 20 million kWh, equivalent to the capacity of approximately 400,000 electric car batteries. Of course, this does not mean that there are actually 400,000 batteries inside the mountain; it is simply a comparison to give an intuitive sense of the amount of energy that can be stored.
When we look at the two projects together, an interesting point emerges: these are not competing technologies, but rather solutions operating on different scales. Nant de Drance represents the “giant” version of gravitational storage, though it is feasible only in mountainous regions with specific geographical features. Energy Vault, and here we’re referring to the original design with cranes and concrete blocks, aims instead to make the same principle adaptable anywhere, sacrificing absolute capacity but gaining in installation flexibility.
Both systems stem from the same realization: the real challenge of the energy transition isn’t so much producing renewable energy as making it available when needed. Photovoltaics generate power mainly during the middle of the day; wind power depends on weather conditions. Without storage systems, a growing share of the energy produced risks being wasted or destabilizing the power grid.
The fundamental difference, therefore, lies in the approach. The Alpine flow battery focuses on maximum storage capacity and the high reliability of a proven technology. Energy Vault, on the other hand, aims to create a sort of “hydroelectric power plant without water,” using relatively simple industrial components and sophisticated control software to move thousands of tons of material.
Together, these two projects demonstrate how Switzerland is exploring different paths to address what many consider the main bottleneck of decarbonization: transforming renewable energy from intermittent sources into truly programmable ones. The challenge is no longer just generating clean electricity, but storing it efficiently, economically, and sustainably until it is needed.
And this is where the third Swiss project comes in, combining the best and mitigating the worst of the two previous solutions. We always talk about flow batteries, but here the liquid changes: no longer water, but two electrolytic liquids contained in separate tanks that function like the electrodes of a lithium battery. These liquids contain chemical species that can oxidize and reduce; in fact, they are called redox flow batteries (reduce + oxidize).
The most innovative aspect is that the battery is divided into two distinct parts:
1. The tanks, which store energy in chemical form.
2. The electrochemical stack, where the reactions that convert electrical energy into chemical energy during charging—and the reverse process during discharging—take place.
In practice, the operation resembles that of a power plant more than that of a traditional battery. Two pumps continuously circulate the electrolytes through a cell separated by a membrane. When the system is charged, electricity alters the chemical state of the substances dissolved in the liquids; when discharged, the reactions reverse and produce an electric current.
A key feature is that power and energy are independent because power depends on the size of the electrochemical stack, while energy capacity depends on the amount of electrolyte contained in the tanks. This means that, if you want to store more energy, it is not necessary to build a completely new battery: simply increase the volume of the tanks. This is a property very different from lithium batteries, where energy and power increase together.
The most widely used technology today is the vanadium flow battery. In this case, both electrolytes contain vanadium in different oxidation states. The use of the same element on both sides reduces contamination issues through the membrane.
The main advantages are:
• very long service life (tens of thousands of cycles);
• high safety, with a much lower risk of fire compared to lithium;
• ease of scaling capacity;
• good compatibility with the needs of power grids and renewable energy.
The disadvantages, on the other hand, are:
• low energy density (they take up much more space than lithium batteries);
• the presence of pumps, pipes, and tanks, which increase complexity;
• still high initial costs;
• considerable weight.
To understand where they stand compared to other storage systems, we can make an intuitive comparison:
• lithium battery: ideal for electric cars and mobile devices;
• redox flow battery: ideal for storing energy from a power grid, a solar farm, or a wind farm;
• pumped-storage hydroelectric plant (such as Nant de Drance): ideal when mountains and large reservoirs can be utilized.
In a sense, a redox flow battery is a middle ground between a conventional battery and a pumped-storage hydroelectric plant: like a battery, it stores energy chemically, but like a power plant, it has external reservoirs that can be expanded to increase storage capacity.
This technology is about to become a reality in Laufenburg, in the canton of Aargau. This small village was not chosen at random; in fact, for decades it has occupied a central position in European power grids thanks to the presence of the so-called “Star of Laufenburg,” one of the historic hubs through which the synchronization of the continent’s high-voltage grids developed. Building a massive storage infrastructure here means locating it at one of the most critical points for managing European energy flows. A massive cavity excavated beneath the Swiss ground, approximately 27 meters deep and over 200 meters long, capable of housing a new energy storage facility: the project aims to build what, once completed, could become the largest redox flow battery ever constructed in the world.
The facility, developed by FlexBase at the Laufenburg Technology Center, is expected to reach a capacity exceeding 2.1 GWh and a power output of over 1.2 GW—figures comparable to the output of a large nuclear power plant. According to information released by FlexBase, construction began in the spring of 2025 and is proceeding in successive phases. In January 2026, Swissgrid approved the first phase of the grid connection with a capacity of 800 MW, an essential step to allow the plant to interact with the national power grid. The scale is hard to imagine. The total area of the campus exceeds 40,000 square meters, while a significant portion of the energy infrastructure will be located underground. This decision is not driven solely by urban planning requirements: flow batteries require large tanks, pumping systems, conversion equipment, and extensive technical areas. Burying part of the facility allows for the optimization of available space and better integration of the structures into the surrounding landscape.
The significance of the project goes beyond a mere technological record. Laufenburg serves as a concrete example of how gigawatt-scale energy storage is becoming an indispensable element in supporting the growth of renewable energy sources, data centers, and the electrification of consumption. We reiterate: the challenge is not merely generating clean energy; it is the just-in-time delivery of the energy produced.
Disclaimer
This post reflects the personal opinions of the Custodia Wealth Management staff who authored it. It does not constitute investment advice or recommendations, nor does it provide personalized consulting, and should not be considered an invitation to trade in financial instruments.
