Long-Duration Energy Storage

Long-Duration Energy Storage (LDES) systems are modular large-scale energy storage solutions that can discharge over long periods of time, generally more than eight hours. These solutions are optimally adapted to address renewable energy production intermittency, improve security of supply and resilience, and create new value streams for diverse energy players. 

LDES systems are currently gaining attention from policymakers, energy providers, and investors alike thanks to their promising use cases for future energy system resilience, with 120 GW of capacity forecast by Guidehouse by 2030. Despite this progress, the ever-growing penetration of renewables and flexibility needs in energy supply mixes calls for even more investments in flexible, medium and long-term, large-scale storage technologies.

In this white paper, Guidehouse provides energy storage stakeholders from private or public sector with an overview and roadmap to the following key topics:

The Emerging Energy System Requires LDES for Flexibility Needs and Resilience, at Scalable Maturity

• High value for LDES — LDES technologies have a unique ability to simultaneously address diverse needs, notably balancing intermittent power supplies, reinforcing energy security and resilience, and expanding the business case of renewable energies.
• No one-size-fits-all use case — Market readiness, maximum capacity, and storage duration vary across the main LDES technologies: chemical, mechanical, thermal, and electrochemical. Stakeholders should therefore bear in mind that there is no one-size-fits-all technology for all use cases, and diverse technologies should be balanced. See figure below.

Figure 1: Use Cases for LDES

• High-cost reduction potential: Based on Guidehouse’s proprietary Levelized Cost of Storage (LCOS) calculation model, each and every technology displays significant potential to reduce LCOS by 2030. A benchmark of LCOS across different LDES technologies displays costs ranging from 75 to 300 €/MWh. Important cost reductions are expected in some technologies. For instance, there is an expected 30% reduction for alternative electrochemical storage solutions by 2030 compared to 2021 and around a 10-15% reduction for diverse other technologies. See figure below.

Figure 2: Levelized Cost of Storage (LCOS) Range of Selected LDES Technologies in 2022

The LDES Market is Developing Rapidly around the World

• Increasing interest on LDES —A variety of stakeholders and organizations, including investors, institutional bodies, governments, and public administration are showing an increasing interest towards LDES. Although the momentum established through targeted funding and policy frameworks such as the U.S. Inflation Reduction Act and the EU REPowerEU plan is promising, more is needed to scale LDES.
• Emerging players — LDES providers leading in their respective technology streams are in agreement regarding the breadth of potential opportunities to apply large-scale storage technologies, across diverse geographic and sectoral markets.
• The need to scale-up LDES —Policymakers have an imperative to develop a dedicated and compelling regulatory and incentive framework that would support LDES project implementation and bankability. Likewise, energy providers should follow a dedicated action plan to enter the LDES market, with attention paid to market analysis, partner identification, and project implementation. Guidehouse can support energy providers throughout these steps.

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