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Is There a Winner for Long-Duration Energy Storage?


Figure taken from Fluence (via Leonardo Morena via LinkedIn)


Long duration energy storage (LDES) – defined by the U.S. Department of Energy (DOE) as a system that can store energy for more than 10 hours -- is the lynchpin for solving the intermittency issues with renewable energy production. While shorter-duration energy storage (SDES) (usually 1- 4 hours) can support some renewable energy generation intermittency, as more and more renewables are added to the grid, LDES is needed to store energy to be dispatched during long stretches when solar or wind are not producing. This article explains top use cases for LDES and the most promising LDES technologies, as well as Leyline’s insights about the LDES sector moving forward.


Why Does Long Duration Energy Storage Matter?

A primary goal of LDES is to ensure that renewable energy can be stored when it is generated and deployed to meet sustained energy demand at a later time. In this way, LDES supports the increased penetration of clean energy technologies; it also gives grid operators added flexibility to balance supply and demand, enables grid resilience, and enables costly transmission and distribution infrastructure upgrades to be deferred. LDES will help the U.S. achieve a net-zero carbon grid – a target the Biden administration has set for 2050 – by dispatching low carbon power when needed and accelerating the retirement of gas peaker plants.

Development of an LDES market has received federal government support through ARPA-E, the research and investment arm of the Department of Energy (DOE). The DOE also launched the Long Duration Storage Shot in July 2021 to reduce LDES costs by 90 percent (for systems that deliver energy ten or more hours) by 2030. In addition to the DOE’s research and funding efforts, the Infrastructure Law is providing $505 million for energy storage demonstration projects, as well as more than $6 billion for activities related to battery material processing, manufacturing, and recycling. These additional resources will help LDES providers demonstrate the value and scale of LDES, hopefully advancing the sector closer to market viability.


The federal government is not the only one getting into the LDES game - there is growing support from the private sector as well. Dozens of large companies such as Microsoft and Google are part of an organization called the Long Duration Energy Storage Council (“Council”) to push for LDES deployment with reports to encourage its adoption.


Long Duration Energy Storage Technologies


LDES encompasses a group of conventional and new technologies that vary depending on level of maturity and commercialization potential. There has recently been a huge influx of private investment in the LDES sector. A few of these include announcements by FlexGen Power Systems, EnerVenue, Malta, and Form Energy. As of early this year, investment in the sector included more than 5 gigawatts (GW) and 65 gigawatt-hours (GWh) of LDES capacity announced or already operational. The table below from McKinsey & Co. shows the forecasted cumulative installed capacity and capex investment through 2040.

LDES technologies can be divided into electrochemical energy storage, thermal energy storage, and chemical energy storage. Leading technologies include:


Electrochemical LDES: Companies in this space are trying to find the sweet spot of lithium-ion batteries for long-duration energy storage. Earlier this year, an eight-hour duration lithium-ion battery project became the first long-duration energy storage resource selected by a group of non-profit energy suppliers in California.


Flow Batteries: Flow batteries are a subcategory of electrochemical energy storage that operate on the idea of incorporating liquid electrolyte to function as a source of direct current electricity that runs through an inverter for conversion to alternating current power. Flow battery performance does not degrade, which is why there are fewer limitations on use cases. While this continual performance stands out compared to lithium-ion batteries, which exhibit greater performance degradation if they are cycled multiple times per day or used for different applications, the only current commercial flow batteries are based on vanadium and zinc.


Mechanical and Geochemical: These solutions include compressing air, gas, or water in natural caverns and combined with gravitational systems.


Thermal Storage: Thermal storage uses excess power to charge a thermal battery made of molten salt.


The chart below shows the market readiness for each LDES type:


A Long Road Ahead for LDES


Unfortunately, economically-viable LDES is not yet available because commercial production is years away for many technologies, and, perhaps more importantly, energy markets are currently focused on short-term applications. Short duration (4 hour) lithium-ion (li-ion) battery storage has dominated the market to date, driven to commercial-readiness by automotive companies racing to develop competitive batteries for electric vehicles. However, because the first hour of energy storage is more valuable than every additional hour, LDES must be even less expensive than the incumbent li-ion technology.


Recently, the state of Arizona tried to address LDES’ needs through incentives for storage technologies with more than five hours of discharge. Outside of Arizona’s incentive program, only Texas and California have added enough renewable energy capacity to create substantial market value for energy storage in applications such as load shifting. In addition, the deregulated markets allow for the ability to create value with the asset owner, something that cannot be done in other regions of the country.

NREL recently compared costs and revenues with the most promising 14 LDES technologies. The researchers ranked the 2050 net cost results for two duration categories: 12 hours and 120 hours, and li-ion leads as the lowest-cost 12-hour technology. Today, these batteries only last about four hours, but the NREL report posits that the duration of lithium-ion batteries can reach 12 hours by 2050. Despite the wide number of LDES technologies currently under development, it’s possible that li-ion is the best technology to deliver LDES.


In a LDES panel at the energy industry conference RE+ in late 2022, Kiran Kumaraswamy, Vice-President Of Growth and Head of Commercial at large-scale energy storage provider Fluence, stated that the while there is no clear LDES favorite yet, the winner will ultimately target different value propositions that puts it in a different league than li-ion. Because li-ion has such a strong hold on the energy storage market, a leading LDES technology must demonstrate more than just a marginal benefit over li-ion. By targeting a niche application, LDES technology providers will more easily be able to demonstrate its distinct value to the market.


It is important to support new developments that support the growth of renewable energy capacity across the country. It remains to be seen what and when the dominant LDES technology reveals itself.


Published in partnership with Leyline Renewable Capital

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