The atomic processes associated with energy storage and release in irradiated graphite have long been subject to untested speculation. We examine structures and recombination routes for interstitial-vacancy (I-V) pairs in graphite. Interaction results in the formation of a new metastable defect (an intimate I-V pair) or a Stone-Wales defect. The intimate I-V pair, although 2.9 eV more stable than its isolated constituents, still has a formation energy of 10.8 eV. The barrier to recombination to perfect graphite is calculated to be 1.3 eV, consistent with the experimental first Wigner energy release peak at 1.38 eV. We expect similar defects to form in carbon nanostructures such as nanotubes, nested fullerenes, and onions under irradiation.