World needs up to 140TWh of long duration energy storage to meet net-zero goals

Between 85 and 140 terrawatt-hours of long-duration energy storage technologies such as pumped hydro, flow batteries and concentrating solar thermal will need to be deployed globally to achieve net-zero emissions power grids by 2040, a new report has found.

While lithium-ion battery storage technologies ranging from behind the meter applications to grid-sale big batteries are becoming a regular feature on electricity grids around the globe, the need to store renewable energy for eight hours or more (LDES) is largely still unmet.

The Long Duration Energy Storage Council, an organisation launched at the COP26 by member companies ranging from Siemens, Rio Tinto and BP down to Australia’s own Redflow, seeks to bridge this gap with its inaugural report, published on Tuesday in collaboration with McKinsey & Co.

The modelling finds that achieving net-zero power grids by 2040 would require a global deployment of 1.5-2.5 TW and 85-140 TWh of LDES, would account for 10% of electricity consumed worldwide, and need an estimated investment of $US1.5 trillion to $SU3 trillion.

In Australia, as you can see in the chart below, the report puts the total addressable market for LDES from 2030 to 2040 at between 20-40GW and 0.5-1 TWh.

As the report points out, this is no small feat: it represents between four and seven times the total TWh global lithium-ion battery storage deployment today and between five and eleven times the total investment in renewable power in 2020.

But it needs to be done: “High renewable penetration will have an impact on the reliability and stability of the power system,” the report says.

“To fully decarbonise the power sector, three key challenges need to be overcome: Power supply and demand imbalances, change in transmission flow patterns, and decrease of system inertia.

“While solutions exist today, they are either carbon emitting (such as gas plants), physically constrained (such as large-scale aboveground pumped storage hydropower, or PSH) or are not cost effective for addressing all future needs of the power system (such as Lithium-ion batteries).

“To achieve a cost-effective energy transition, long duration energy storage (LDES) technologies are required.”

The report focuses on what it calls novel LDES technologies, which range from mechanical solutions such as modern pumped hydro and gravity based systems, to thermal solutions like molten salt or latent heat, to chemical technologies such as hydrogen storage, and electrochemical, which takes in flow and metal anode batteries (see table below).

According to the data, there is currently more than 5GW and 65GWh of LDES already operational or announced worldwide, with more than 260 LDES projects announced at different commercial stages, not including large-scale aboveground pumped hydro storage (PSH) projects.

Thermal LDES accounts for the largest share of the total announced capacity (60%), attributable primarily to a number of molten salt storage facilities for concentrated solar power (CSP) in the megawatt scale, the report notes.

Traditional compressed air energy storage (CAES) holds the second-largest capacity share (around 30%) and the largest average plant size (80 MW). Flow batteries account for the highest number of projects (100+), but their average announced capacity is significantly lower at around 4MW.

“This means that, while the potential of other LDES technologies is high, their widespread adoption is dependent on their commercial demonstration and cost developments,” the report says.

The report notes that the competitiveness of LDES will be driven largely by energy storage capacity costs, which are expected to decline by 60 per cent by 2040. The round-trip efficiency (RTE) of these technologies is also projected to improve by 10-15%.

Levelised cost of storage (LCOS) analysis shows that if these learning curves are achieved, LDES is levelised cost of storage-competitive against Li-ion for durations above 6 hours, with a distinctive advantage above 9 hours, by 2030.

The LDES system capex reduction forecast (55-60% by 2040) is comparable to cost-reduction expectations reported for utility-scale Li-ion systems (around 70%) and LCOE for hydrogen turbines (around 50%), the report finds.

Moreover, the pace of reduction is similar across the technology groups, with the fastest learning phase occurring in the next decade, the report says. This implies that the relative competitive positioning and economic trade-offs between the technologies will likely remain similar over this period.

For this to happen, however, the report highlights the need for long-term system planning to attract adequate private upfront investment to support LDES deployment and research and development, and market designs to fully recognise the full value LDES can provide.

Additionally, the report acknowledges that some LDES technologies are in their early stages of deployment and will required targeted investment to achieve the lower cost and scale required to lower societal CO2 emissions.

“LDES technologies reduces our exposure to the unpredictability of wind and solar power,” said Claudio Spadacini, the founding CEO of Energy Dome, which is behind a novel take on compressed air energy storage.

“While renewable energy generation is rapidly increasing it does not match the variations in demand such as peaks in the morning and evening of each day.

“LDES technologies can store electrical energy for hours, days and even weeks to fulfil energy supply needs in critical junctures for the grid, all whilst scaled and at a competitive cost in a time currently when electrical energy consumption is continually on the rise,” Spadacini said.