Amid all the bustle, noise, and hot takes from the COP26 climate conference in Glasgow, it may be easy to miss some of the more important, quieter, outcomes. That was true even for those of us who were fortunate to attend and get through the rain and crowds.
I was proud to take part in COP this year and represent not only ESS, but also to be a voice for the long-duration storage industry. Among the many meetings and interviews, I was particularly pleased to help launch the Long Duration Energy Storage Council, a global coalition to advance long-duration energy storage (LDES), alongside two dozen founding members including Alfa Laval, BP, Breakthrough Energy Ventures, Form Energy, Highview Power, Siemens Energy, and others.
The time has come for this industry to have a voice that reflects the key role LDES will play in enabling global decarbonization. The LDES Council can be that, and also a provider of research and thought leadership to support governments and grid operators in leveraging LDES technologies for a clean energy future. And for that, we are not a moment too early.
The Need for LDES
One thing is becoming eminently clear: you cannot fully decarbonize the grid without LDES – a basket of technologies encompassing batteries, pumped hydro, thermal storage, and other solutions. Whereas lithium-ion batteries have proven effective for short duration storage, they are too expensive for bulk storage of electricity for long hours or days, which is what the transition to renewable generation requires. The fundamental problem is well-known: variable wind and solar generation don’t line up with demand on the grid.
And while 4-hour lithium-ion batteries can help to correct that mismatch, they are generally limited to short-duration stability regulation and energy shifting functions. Around the world, the bulk of grid stability for longer durations is currently provided by natural gas peaker plants, which can be ramped up or down to balance electricity supply and demand.
Moving to a fully decarbonized grid requires new forms of energy storage, with the Council identifying 8-24 hours and more than 24 hours as the two principal LDES archetypes. Eight to 24-hour (intraday) storage is needed to balance renewable energy production with demand within the typical daily energy cycle, and more than 24-hour storage is required for those exceptional, extended periods of low solar and wind generation output.
As renewable energy replaces more and more fossil fuel-fired power plants, the need for long duration storage will grow. Based on cost profiles provided by the Council’s technology members, we have found that various LDES solutions can play the leading role in grid flexibility, fulfilling a critical need between short-duration lithium-ion batteries and hydrogen-fueled turbines, which would represent a carbon-free replacement for natural gas plants.
Growing recognition of the need for LDES has spurred rapid growth. Of the $2.6 billion invested in LDES companies to date, half has come in the last two years. On the deployment front, a rash of recent announcements – not the least of which is ESS’ recent 2 GWh supply deal with SB Energy – has confirmed momentum in the LDES space.
And yet, so much more is needed. Research carried out by the LDES Council with analytical support from McKinsey & Company shows 85-140 terawatt-hours (TWh) of LDES could be deployed globally by 2040. This would represent a $1.5 to $3 trillion investment – 5 and 11 times the total world-wide investment in renewable energy in 2020.
But we need to start moving now. To be on track to reach ambitious decarbonization goals, roughly 1 TWh of long-duration storage must be deployed by 2025. The LDES Council study indicates that most of this storage is in the 8-24-hour range, with more than 24-hour storage being deployed later as grid decarbonization progresses.
The findings of the LDES Council Study and underlying analysis will be published on November 23rd on the Council’s webpage.
The Path Forward
While some emerging LDES technologies need more development, some market-ready LDES solutions are already meeting long-duration storage needs today. But scaling these deployments so that LDES can fulfill its potential can be another matter. Chiefly, electricity markets must be structured so that the benefits of LDES can be monetized.
As a start, it will be important to support initial deployments and manufacturing projects, to accelerate getting LDES technologies to scale. This can include dedicated support programs, utilizing existing approaches such as expanding renewable energy solicitations to include long-duration energy storage, as well as support for manufacturing and supply chain development.
It will also be important to structure markets to encourage LDES uptake. This includes creating market mechanisms and designs to compensate flexibility and rules to more fully capture the value that LDES technologies bring. Regulations that address safety standards will also be important.
Ultimately, governments, utilities and grid operators need to undertake long-term grid planning that recognizes the evolving needs of the power grid, recognizing that large-scale deployment of long-duration storage is essential for grid decarbonization. This system planning can provide a level of certainty to attract both private investment in technology development and early deployments.
Long-term planning that recognizes the needs and benefits of LDES is already happening in California and New South Wales, Australia. Other regions can learn lessons from and follow the lead of these pioneers.
Around the world, solar and wind are already the lowest-cost ways to generate electricity. As renewables deployment accelerates, LDES will be essential in realizing a decarbonized grid that provides cheap, reliable, clean energy for everyone.
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