In recent years, emerging long duration energy storage(LDES) technologies such as vanadium redox flow batteries, compressed air energy storage, and molten salt heat storage have also received a lot of attention, and LDES has become a new trend in the field of energy storage. Recently, Form Energy, a long-term energy storage company in the United States, announced the construction of a factory, planning to build the first iron-air energy storage system production plant.
The large-scale construction of the iron-air energy storage system means that the energy storage technology is gradually becoming mature and has crossed the threshold of large-scale production. In fact, in addition to iron-air energy storage systems, emerging LDES technologies such as vanadium redox flow battery, compressed air energy storage, and molten salt heat storage have also received a lot of attention in recent years. Long-term energy storage has become a new trend in the field of energy storage.
1. Surge in wind and solar installations drives up demand
Different from fast charge and discharge systems, energy storage systems that can last for more than 4 hours or several days or even months of charge and discharge cycles are generally collectively referred to as long-term energy storage. These include compressed air energy storage, molten salt heat storage, flow battery energy storage, gravity energy storage and other emerging energy storage systems. In recent years, the installed capacity of wind power, photovoltaics and other renewable energy in the global power supply system has continued to increase.
At the same time, in order to achieve the established climate goals, the proportion of installed capacity of renewable energy will continue to increase in the next few decades, and the fluctuation of wind power generation output has become a major challenge for the current power system. Taking Europe as an example, in the second half of 2022, fluctuations in wind speed will lead to unstable output of national grids such as Germany with a high proportion of wind power, which will become a key factor in driving up electricity prices in the EU.
From the perspective of the industry, long-term energy storage systems will be an important solution to store excess power, ensure the consumption of renewable energy and achieve grid stability. Industry professionals pointed out in a report released recently that LDES technology with a charge-discharge cycle time between 8 hours and 100 hours will be a key to improving the stability of a high-proportion renewable energy grid.
2. Unprecedented scale of investment in long-duration energy storage market
So far, many European and American countries have indicated that they will provide financial and policy support for emerging long-duration energy storage technologies. In November 2022, the U.S. Department of Energy announced that it will provide at least USD 350 million in financial support for long-term energy storage projects. Zero-carbon and low-cost long-term energy storage technologies with a charge-discharge cycle of more than 10 hours are expected to receive funding.
The European Commission also recently issued a statement stating that it will provide up to 470 million euros in financial support to 78 potential start-up companies, and the final list includes LDES start-up companies based on carbon dioxide. Promoting types of energy storage technology is the key to all-weather availability of wind and solar power generation. The US Department of Energy will take measures to extend the duration of energy storage technology and reduce power generation costs. It is worth noting that the scale of China's LDES market is also growing rapidly, and the scale of energy storage power stations based on compressed air energy storage and liquid flow energy storage technologies has reached the level of 100 megawatts.
In October 2022, the first national-level large-scale chemical energy storage demonstration project approved by the National Energy Administration of China, the liquid flow battery energy storage peak-shaving power station, was officially connected to the grid for power generation in Dalian. This project set a record for the flow battery energy storage system with the largest power and capacity in the world, and also marked that the flow battery technology has entered the stage of industrialization development.
The high level of attention from governments and the flourishing technical routes have made the long-duration energy storage market unprecedentedly hot. Globally, the value of long-duration energy storage projects under construction or in operation has exceeded US$30 billion. Since 2019, global long-duration energy storage projects have attracted US$58 billion in investment. If all these projects are completed, the total installed capacity of long-term energy storage in the world is expected to increase by 57 million kilowatts, which is equivalent to about three times the total installed capacity of LDES in the world in 2022.
3. Commercialization of LDES is still some way off
Although the market is hot, the industry generally believes that most long-duration energy storage technologies are immature, and there are multiple challenges such as unclear business models and financing difficulties. It may be a while before developers of energy storage systems can scale up and turn a profit. Industry professionals pointed out that although a variety of long-term energy storage technologies have emerged on the market, these technologies are far from meeting the needs of the grid.
The market demand for long-term energy storage still faces competition from other emerging low-carbon technologies, including small modular nuclear reactor technology and green hydrogen power generation technology. The agency believes that up to now, pumped hydro storage is the only LDES technology that can be developed on a large scale. Before 2030, pumped hydro storage technology may still occupy a dominant position in the long-term energy storage market.
Although pumped storage technology is the most mature and has the lowest levelized cost of electricity, there are still shortcomings such as limited equipment location and long project development cycle. In the absence of resource constraints, the levelized cost of electricity will be the most important indicator to measure the pros and cons of various long-duration energy storage technologies. However, considering the different characteristics and application scenarios of energy storage technologies, in the end, the LDES market will present a pattern of competition.
From the perspective of the industry, there is a huge demand for long-term energy storage around the world. To speed up the commercialization of long-duration energy storage technology, not only government policy support is needed, but energy storage system developers should also continuously reduce production and construction costs and realize the large-scale application of emerging technologies.