With the rise of wind and solar power, grid operators are faced with the challenge of balancing renewables’ inherent variability. Energy storage, if deployed wisely, gives grid operators the possibility to store energy for prolonged periods of time.
More storage technologies are being deployed – lithium-ion (Li-ion) batteries have sharply declined in price and become today’s dominant form of energy storage. In the US, more than 2,100 megawatt-hours (MWh) of Li-ion batteries were installed in the fourth quarter of 2020, an increase of 182% over the third quarter. However, Li-ion batteries cannot provide long-duration energy storage (LDES), since they store energy for between two and four hours.
LDES covers any technology that can store energy for longer periods, with the benchmark being above ten hours, as defined by the US Department of Energy. In this Weekly Data, Energy Monitor examines analysis by the Long Duration Energy Storage Council, a CEO-led organisation launched at COP26, to show the prospects for LDES.
Based on current cost projections, LDES is expected to be able to store at least 150GW globally in 2030. To put this figure in context, France’s total power generation capacity in 2020 was 136.2GW. The LDES Council gets to this total by considering different kinds of mechanical, thermal, electrochemical and chemical storage technologies. It does not take into consideration Li-ion batteries, dispatchable hydrogen assets (e.g. hydrogen-fired turbines) and pumped storage hydropower.
Of this 150GW, 20% is expected to be stored for more than 24 hours. Looking further ahead, in 2040, of the 1,500GW of LDES expected to be available, at least 40% would store energy for more than 24 hours.
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However, the cost of energy storage technologies must, on average, decrease by 60% by 2040 compared with today. Cost reductions can come from design optimisation, scaling up of logistics, and further research and development, the LDES Council suggests. It estimates the sector must generate $1.5–3trn in investments by 2040 to fulfil its potential. Investments in LDES are rising fast, as the technologies start to gain traction. In 2021 alone, the sector saw more deals than in the three previous years combined, nearing $1bn.
However, the LDES Council argues that government support will be needed to help lower costs and mobilise the investments needed going forward. It asks governments for "long-term system planning, early compensation mechanisms that reduce uncertainty for investors while the market is still nascent, and supportive policies, regulations and market designs”.