Long-Duration Energy Storage Is a Decarbonization Linchpin
The global clean energy transformation faces the daunting challenge of uncoupling the time, location, and carbon intensity of energy supplies from the fluctuations in societal demand for energy. Long-duration energy storage (LDES), generally defined as a system capable of storing energy for 10 or more hours, is a key solution to balance variable renewable energy (VRE) generation with demand. Yet, LDES implementation at scale for end-users is lagging below the rate needed to achieve deployment goals. Without LDES, low-carbon electrification, hydrogen, net-zero heat, and other key solutions that cut greenhouse gas emissions (GHG) will be limited.
Managing electrical power systems and balancing supply and demand is already a complex challenge, as demand varies considerably within a day, let alone months and seasons. Supply variations and uncertainties with wind, solar, and other VRE sources make this much more challenging. The temporal mismatch between VRE supply and demand leads to inefficient resource use (e.g., curtailment), low utilization rates, poor economics, and diminished GHG reductions. VRE supplies are often distant from high-demand locations, such as cities, industry, and transportation centers, leading to high costs. This limits the ability of VRE to improve resiliency and energy security. The energy supply faults associated with the Texas freeze in 2021, $18 billion weather events in 2022, and the $7 billion events in 2023 (so far) remind us of the importance of a resilient, secure energy supply.
22 states and the U.S. federal government have renewable energy goals and recent legislation provides funding to pursue those goals. States’ ability to meet those goals efficiently is dependent on LDES solutions to store energy. Modeling suggests that intraday flexibility needs will dominate until 2030, but as the share of renewables increases beyond 60 percent, days and months of storage will be needed. This point will likely be reached in multiple regions by 2040, increasing seasonal storage needs.
There are a range of LDES solutions (thermal, electrochemical, mechanical, and chemical) that offer flexibility, facilitate deployment and scaling, and that have low lead times compared to upgraded transmission and distribution grids. Modeling suggests that 1.5-2.5 terra watts (TW) of LDES could be deployed globally by 2040, which is 8-15 times the current total energy storage—enough to store 10 percent of the electricity used by 2040. This reflects the multiple LDES use cases—balancing power supply and demand, improving efficiency, and enabling greater access and use of VRE. It’s estimated that LDES deployment could avoid 1.5-2.3 gigatonnes of CO2 equivalent emissions per year. In the United States, that could mean a 35 billion CO2e/year reduction. To achieve a net-zero economy by 2050, the national grid may need some 225-460 gigawatts (GW) of LDES capacity.
The cost of LDES for short storage durations continues to drop, as lithium-ion battery advances spillover into this area and as new technologies such as iron-air move from initial government-supported research to early-stage deployment. For inter-day to seasonal storage, cost ranges are broad, with mechanical (compressed air and pumped hydro), electrochemical (batteries), and chemical options (hydrogen fuel cells) having the lowest costs. Combining energy storage with solar illustrates the potential to compete in the upper price range for natural gas combined cycle plants, and the lower range for Peaker plants. This highlights the potential to reach price parity. Yet, research, development, and deployment (RD&D) is still vital to bring costs down so the most competitive solutions can compete with incumbent solutions.
LDES is a driving force for achieving a low-carbon future, yet the rate of deployment at scale for end-users is slow. This is reflected through several technologies remaining in the pre-commercial stage, uncertainty on the role of LDES, indecision on who will pay, and questions on the value share LDES should receive. Challenges to scaling LDES technologies include reducing the cost by half, improving roundtrip efficiency (the percentage of energy put into storage that is later retrieved), and delivering predictable compensation.
To address these challenges, demonstrations are needed at end-user applications while also increasing scale, so LDES can be integrated with multiple systems. This will demonstrate viability and streamline benefits (reduce startup and shutdown costs, manage transmission congestion, and support resilience), facilitate the business case, and strengthen arguments for value chain compensation. The most relevant early market niches include hospitals, military, commercial buildings, and industrial facilities with operations flexibility and strong drivers to reduce GHG emissions. LDES is a fit for commercial buildings as heating and cooling needs are amenable to local energy storage and recovery, and thermal and electrochemical storage systems are established. Plus, these two approaches are low-cost options. However, modeling is needed to understand how to maximize these benefits, achieve supply and demand flexibility, and attain resilience while minimizing cost.
The Department of Energy (DOE) has a well-established LDES program with $500 million in funding from recent legislation and an “Energy Earthshot” on LDES. To address the challenges noted above, DOE needs to drive demonstrations beyond batteries, include longer storage timelines, and reach end-user applications. The latter is particularly important, as end-user acceptance is key for LDES’ viability, its integration with current electrical and process systems, and for building an understanding of the system-wide arbitrage value accessible with LDES. DOE also needs to initiate goal-oriented partnerships with utility companies, third-party providers, academia, and national labs to optimize resources, systems control, and demand response. DOE should pursue an agile, transparent, fast-paced approach connected with end-user needs, sector decarbonization goals, and market viability.
The Department of Defense (DOD) may be a particularly important partner for DOE. DOD’s bases, many of which have power demands comparable to small cities, have an imperative for resilience. DOD has set a goal that bases be self-sufficient for at least 14 days, which will create a strong demand for LDES. A joint DOE-DOD LDES demonstration program has been authorized and funded, but it has not yet been announced by the departments.
LDES is a linchpin for achieving a low-carbon energy future. DOE and its partners need to expand the range of demonstration types and extend them to end-users to accelerate learning, adoption, and impact.