Inter-Seasonal Energy Storage Will Play a Key Role in Decarbonized Energy Systems

The share of solar and wind penetration in electricity generation is expected to rise substantially in the next decade. As the penetration of renewable energy sources increases and fossil-fuel-based thermal generation is phased out, power systems must adapt to one of the key characteristics of wind and solar: variability, which changes with seasons. As the electrification of heating increases, so will demand. Hence, inter-seasonal storage will be required to match increased demand when renewable generation can no longer supply enough power to the system.

The energy storage market is dominated by short duration (up to 4 hours) solutions, but recently longer-duration technologies (4-12 hours) have gain more attention. Currently, inter-seasonal storage is dominated by natural gas, with carbon-free technologies occupying only a small portion of the segment. The popularity of technologies like pumped hydro have been limited by low natural gas prices, hence most pumped hydro projects are more than 40 years old. Other technologies suitable for inter-seasonal storage are less mature and in need of development.

This Guidehouse Insights study reviews future demand for inter-seasonal storage and the key characteristics of inter-seasonal energy storage solutions, including carbon-free inter-seasonal storage. It assesses the selected technologies in relation to key characteristics and their technological readiness level. These characteristics help define the shortcomings of each technology and indicate where change in the energy system must happen to accommodate carbon-free inter-seasonal energy storage. The study concludes with recommendations for grid regulators, technology developers, regulatory bodies, and policymakers.