- Energy Storage
- Pumped Hydro Storage
- Battery Energy Storage
- Energy Storage Systems
Developing Long-Duration Storage to Fortify the Green Energy Transition
The confluence of skyrocketing oil & gas prices and signing of the US’ landmark renewables legislation, the Inflation Reduction Act (IRA), indicates an impending paradigm shift in the energy storage industry. The argument for stabilizing the grid using natural gas is often characterized by the energy source’s reliability, low cost, and low emissions rate when compared with coal and oil. Rather than reinvesting in new natural gas projects, however, new long-duration storage technologies present a direct opportunity to support phasing out the transition fuel. Across other regions, the opportunities will continue to increase; as natural gas prices continue to rise and Europe finds itself facing an unprecedented energy crisis, countries must look to finance favorable investment conditions for the development of long-duration storage technologies to fill the gap in renewable energy production during times of peak consumer demand.
A Technology in Need of Development
Deployment of long-duration storage technologies is still in the early to mid-growth phase, but these technologies have a crucial role to play in unlocking a broader transition to green energy. Innovative long-duration storage projects such as harnessing the potential energy of gravity in abandoned mine shafts, compressed-air energy storage, and new battery technologies are still in pilot stages. Projects involving long-duration storage have the potential to relieve strain on the grid, eliminate inequitable fossil fuel peaker plants, and even lower the cost of zero-carbon alternatives to transportation fuels that account for 27% of carbon emissions in the US. Phasing out natural gas through long-duration storage investment will be a key next-generation technological step to reach ambitious decarbonization goals.
According to Guidehouse Insights, pumped storage hydroelectricity long-duration storage accounts for 96% of the total global power output capacity of energy storage. However, new sites for pumped storage hydroelectricity are limited due to prohibitive costs, permitting difficulties, and the specific topographical features necessary for uphill pumping and storage. Such challenges require innovative solutions. Meaningful expenditure on new utility-scale compressed and liquid air, flow battery, and gravity long-duration storage technologies to support green energy production can expedite the transition from renewable augmenting fossil fuels to a stable net-zero future.
The Economics of Long-Duration Storage Investment Are Changing
The levelized cost of storage for natural gas remains lower than long-duration storage stemming from renewable sources. Dramatic increases in natural gas price have pushed the price of deploying new long-duration storage projects toward parity. Economists point to a crowding-out effect in the market: new natural gas projects reinforce fossil fuel infrastructure in the short term, making a transition to clean storage technologies more costly over time. When considering the impending energy transition alongside recent volatility in global energy markets and reduced costs of renewable deployment, investors need to rethink pumping more money into fossil fuel development.
Limitations in transmission infrastructure are already being addressed to ensure long-duration storage can surpass regional-scale distribution. The IRA provides a standalone investment tax credit for energy storage development of up to 50%. Additionally, the Department of Energy’s Long Duration Storage Shot is aiming for a 90% reduction in long-duration storage cost with a goal of 10 or more hours of duration—within the next decade. Either by carrot or stick, incentivizing investment in clean long-duration storage technologies now will ensure increased grid resiliency and decreased dependence on natural gas when the next supply crisis strikes.