The role of long-duration energy storage in the net-zero power grid

What is long-duration energy storage?

Long-duration energy storage (LDES) refers to systems that can store a significant amount of energy and release it over extended periods, typically ranging from several hours to days. This type of storage is key for managing the fluctuations in energy supply and demand, particularly with the increasing use of intermittent renewable energy sources like wind and solar power.

One example of LDES technology is pumped storage hydropower, which stores energy in the form of water in an elevated reservoir, releasing it through turbines to generate electricity when needed. Another example is compressed air energy storage, where air is compressed and stored under pressure in underground caverns, and released to drive turbines when electricity is required.

These technologies are not only important for managing fluctuations in energy supply and demand but also for providing grid stability and reliability, especially during peak demand times when renewable sources might not be available.

3 benefits of LDES for developers

Developers are at the forefront of designing and implementing the technologies that will make LDES viable and cost-effective. Their work contributes to the stability of the energy grid and to the advancement of sustainable energy solutions. By understanding and investing in LDES, developers can lead the innovation in energy storage, which is a key component in the transition to a cleaner energy future.

Here are three reasons to pay attention to LDES:

1. Growing market: Energy storage is on the rise. Over the last 5 years, global installed energy storage grew 50.5 GWh and is projected to increase 2,000% to over 1,000 GWh by 2030. Deployment of both short-duration lithium-based batteries, which are typically economical at durations of 4 hours or less, and geologically bound LDES technologies, such as pumped storage hydropower (PSH) or compressed air energy storage (CAES), has increased.

2. Grid stability: LDES directly impacts the efficiency and reliability of energy systems. As the world increasingly relies on renewable energy sources, which are inherently intermittent, LDES provides a way to ensure that energy is available even when the sun isn’t shining, or the wind isn’t blowing. This is crucial for maintaining a consistent energy supply and avoiding blackouts.

3. Economic incentives: The economic incentives for LDES are significant. The Inflation Reduction Act contains a 30% investment tax credit (ITC) for projects that install more than 3 kWh of energy storage, which will exist for projects built before 2032. This ITC will also extend to municipal utilities and electricity companies that were historically exempt. They can also receive these ITCs through direct cash injections worth up to 50% of the ITC value. As the demand for renewable energy grows, so does the need for effective storage solutions. Developers who can innovate in this space will be well-positioned to benefit from the market growth and the increasing investment in sustainable technologies. In essence, LDES is not just a solution for grid reliability; it’s also a significant business opportunity for developers in the energy sector.

As renewable penetration is gaining a critical mass and causing cost and technical performance issues for generally inflexible existing thermal generation, now is the right time to develop and deploy highly flexible long-duration energy storage to provide grid stability and reliability.

Watch this space: We are analyzing LDES and its potential to bring stability to a net-zero power grid and will continue to provide more information about LDES technologies and the risks and opportunities for developers in the months ahead.