As long-duration energy storage (LDES) continues to gain traction, the next challenge is how to effectively integrate these technologies into energy procurement strategies that meet the growing demand for carbon-free energy (CFE). In our post titled “Empowering the Grid: How Long-Duration Storage Can Revolutionize Energy Supply”, we explored the technological landscape of LDES and its transformative potential to revolutionize energy supply. Now, we will dive into the practical aspects of leveraging LDES for advanced procurement strategies, enabling 24/7 CFE, and how real-world case studies are showcasing its impact on grid resilience.
What LDES Solution is Right for You?
Selecting the right LDES solution depends on several factors:
- Cost Considerations: Each technology has a unique cost structure. Pumped hydro and CAES require significant upfront investments, while flow batteries and thermal storage may offer lower costs but come with other trade-offs, such as efficiency or scalability.
- Geographic Considerations: The viability of certain technologies is heavily influenced by geography. For instance, pumped hydro requires specific topography, while CAES needs suitable underground caverns.
- Diversification of Portfolio: A diversified energy portfolio that includes multiple types of LDES can help manage risks and optimize performance across different scenarios and conditions.
Costing Considerations for LDES
The economic feasibility of LDES technologies hinges on a careful balance of capital expenditure (CapEx) and operational expenditure (OpEx). Each technology has a unique cost structure, influenced by factors such as upfront investment, maintenance costs, and lifecycle expenses. As the LDES market evolves, there are significant opportunities for cost reduction, particularly through economies of scale and technological advancements. Notably, in 2024, battery prices have seen the largest drop since 2017, reflecting economies of scale, component costs and metal commodities pricing – and that trend is expected to continue.
Market incentives and financial models play a crucial role in driving LDES adoption. Policies such as those promoted by the United States (US) Department of Energy (DOE) offer funding opportunities that can make these technologies more accessible. Financial models, including contractual instruments, PPAs, and 24/7 CFE agreements, provide a framework for deploying LDES in a way that aligns with the economic goals of energy suppliers.
Enabling 24/7 Carbon-Free Energy with LDES
LDES is essential for achieving 24/7 CFE—a goal that requires the ability to store renewable energy and dispatch it consistently over long periods. By enabling round-the-clock energy supply from renewable sources, LDES technologies ensure that energy suppliers can meet the demands of their customers while adhering to decarbonization commitments.
Virtual Power Plants (VPPs) and PPAs are critical components of this strategy, with LDES playing a central role in optimizing these agreements for C&I offtakers. Batteries and other storage technologies are key to ensuring that energy is available when needed, helping to align energy supply with load timing needs.
Despite the clear advantages of LDES, there are challenges in implementation. Integrating LDES with existing energy infrastructure requires careful planning and coordination, particularly in areas with limited grid capacity. However, the opportunities for energy suppliers to lead in the 24/7 CFE space using LDES are significant, offering a pathway to greater reliability and sustainability.
The Importance of Data in Tracking Performance and Dispatchability
Data is the foundation of effective LDES management. Real-time insights into dispatchability and efficiency are essential. By tracking key performance indicators such as energy density, round-trip efficiency, and capacity factor, energy suppliers can enhance grid stability and ensure reliable energy supply.
Data-driven decision-making is critical for optimizing LDES deployment, allowing energy suppliers to make informed choices that maximize the value of their storage assets. Cleartrace’s platform provides the tools needed to track these metrics, offering a competitive advantage in the evolving energy landscape.
LDES in Action:
Despite capital and operating costs and evolving technologies, there are a number of promising LDES projects already underway, including some that have been selected and funded by DOE. Some notable projects in motion with DOE funding that we are excited about include:
- Xcel Energy’s Multiday Iron Air Demonstration (MIND): Xcel Energy is partnering with Form Energy to deploy iron-air battery systems at retiring coal plants in Colorado and Minnesota. The project is significant because it involves multi-day energy storage, which can discharge continuously for over 100 hours. This capability is crucial for ensuring grid reliability and supporting renewable energy integration, particularly as Xcel transitions away from coal.
- Wisconsin Power and Light’s (doing business as Alliant Energy) Columbia Energy Storage Project: Alliant Energy is collaborating with Energy Dome, a company known for its innovative carbon dioxide-based energy storage technology. This project will help test and deploy long-duration storage solutions using Energy Dome’s technology, which compresses and expands carbon dioxide to store energy. It’s notable for its potential to provide cost-effective and scalable storage solutions that enhance the reliability of renewable energy sources in Wisconsin.
- Westinghouse Electric Company’s Pumped thermal energy storage in Alaska Railbelt (POLAR): Westinghouse is working on deploying a 1.2 GWh utility-scale pumped thermal energy storage system in Healy, Alaska. This project will support wind power integration and improve grid resilience in the region. This initiative is groundbreaking as it represents the largest planned single installation of LDES in the U.S. and showcases the potential of pumped thermal energy storage to provide long-duration energy storage with a cost-effective and compact design.
We are eager to see more collaboration and innovation to implement and scale battery technologies.
Looking Ahead
Long-duration energy storage, including the diverse array of technologies covered in “Empowering the Grid: How Long-Duration Storage Can Revolutionize Energy Supply”, is a game-changer for the energy industry as we transition to a net-zero future, offering the potential to revolutionize energy supply and support the transition to a carbon-free future. As energy suppliers navigate the challenges of this transition, LDES provides a critical solution that can enable 24/7 CFE, enhance grid reliability, and support decarbonization goals.
Cleartrace is committed to supporting energy suppliers in this journey, providing the data and insights needed to optimize LDES deployment and achieve sustainable energy supply. By embracing LDES, energy suppliers can unlock new opportunities for growth, innovation, and environmental stewardship.
