Renewable sources such as wind and solar have a critical role to play in the energy transition. Investments in cleaner, greener energy are expected to remain on an upward trend with global green energy investments cumulating to $1.1 trillion in 2022. And last year, DNV’s Energy Transition Outlook predicted a 16-fold increase in global renewable capacity over the next 30 years, resulting in a greater need for flexibility between two and four-fold. This is where energy storage comes in.
Energy storage systems differ in their composition, capacity and duration. Short-duration energy storage (SDES) can discharge energy for up to 10 hours at its rated power output, whereas Long-duration energy storage (LDES) systems can discharge energy for more than 10 hours.
Most battery energy storage systems (BESS) can distribute their stored energy for short durations of between four to six hours to bridge or balance gaps in demand and supply. The length of discharge also depends on what type of activity is being carried out by the asset as this can include load shifting and grid services.
Lithium-ion (Li-ion) batteries are the most popular type of storage technology with the market size predicted to grow from $10 million in 2022 to $247 million by 2030. Li-ion battery storage systems are mainly used for SDES as they have a discharge time ranging from 1 min to 4 hours.
In contrast, LDES technologies such as compressed air and pumped hydro storage could potentially provide week and month-long periods of flexibility to the grid. Given the increasing rate of grid integration, LDES solutions are required at scale as they could play a key role in the long-term stability of the grid. These technologies work by storing energy from wind or solar and disbursing it later and over longer periods - thereby minimizing disruptions and curtailment periods.
The variety of solutions within the LDES category also means that LDES technology could be applied to various use cases. These could in turn drive greater reductions in carbon emissions at scale.
The level at which LDES technologies are deployed is crucial for realizing their associated benefits. Aurora Energy predicts a 10 MtCO2 p.a. reduction in carbon emissions if LDES technology is deployed in large quantities by 2035. They also report that this could lead to a $1.3 billion p.a. reduction in system costs.
To build a cost-optimal net-zero system, the LDES council predicts that LDES technology would need to be scaled up to 400 times present-day levels to 1.5 - 2.5 TW (85-140 TWh).
At present, the business and economic case for LDES technology remain topical given the cost of deployment and concerns around their viability. The LDES report finds that LDES costs must decrease by 60% to remain cost optimal. To reach this point, a total of $1.5 - $3 trillion of total investment in LDES will be required between 2022 - 2040.
Achieving the required level of investment to deploy LDES technologies at scale will require greater research to determine the viability and build the business case and revenue models for investment.
How to resolve the problem of LDES?
In 2021, the UK Government organised a consultation requesting evidence to enable them to facilitate the deployment of large-scale LDES. The input gathered identified some of the barriers that market participants face in deploying this technology and how the government can best respond to these challenges.
LDES solutions could potentially accelerate net zero ambitions. However, government policy through research and innovation funding and policies supporting the large-scale deployment of these LDES technologies is required to drive this change.