Growing Interest in Long-Duration Energy Storage (LDES)
Interest in long-duration energy storage (LDES) is rapidly increasing as the demand for clean, reliable energy grows. The Question asked by experts is: Could LDES Overtake Lithium-Ion Batteries? LDES technologies, such as thermal and compressed air storage, offer cost-effective solutions for storing energy over longer durations. According to BloombergNEF’s cost survey, these technologies outperform lithium-ion batteries when storing energy for more than eight hours.
Thermal energy storage systems have an average capital expenditure (capex) of $232 per kilowatt-hour (kWh). Compressed air storage systems average $293 per kWh. In contrast, lithium-ion batteries, which are better for four-hour storage, cost $304 per kWh. These figures highlight the affordability of LDES technologies for long-term energy needs.
LDES costs vary based on storage duration, project size, and location. For example, gravity energy storage, which works by raising and lowering weights to store energy, has the highest average capex at $643 per kWh. As more LDES technologies are deployed, BloombergNEF expects costs to decrease across key regions.
Factors Driving LDES Costs and Adoption
Flow batteries and compressed air storage have gained the most commercial success. These technologies show promise for further cost reductions. Increasing demand for LDES solutions is helping turn intermittent renewable energy sources into dependable, year-round power. Public procurement projects, like the one in New South Wales, Australia, showcase this transformation.
However, LDES technologies may not experience the same rapid cost declines as lithium-ion batteries. Lithium-ion systems are already widespread in the transport and energy sectors. This poses a challenge for LDES to match lithium-ion’s rapid cost reductions.
China is leading the way in LDES cost-efficiency, especially in compressed air, flow batteries, and thermal energy storage. BloombergNEF reports that capex for LDES outside China remains much higher—68% for compressed air, 66% for flow batteries, and 54% for thermal storage. China’s large-scale projects, driven by strong policies, have allowed the country to set new size records.
Despite China’s leadership, it remains the world’s top producer of low-cost lithium-ion batteries, which could threaten LDES technologies in its own market. However, certain LDES options, like cavern-based compressed air storage, have already surpassed lithium-ion batteries in cost efficiency.
Outside of China, the US and Europe are exploring a wide range of LDES technologies. These regions, driven by clean energy goals and rising lithium-ion costs, are focusing on alternatives. They are researching options such as flow batteries, compressed air, thermal energy storage, gravity systems, and innovative pumped hydro projects. These efforts aim to meet long-duration energy storage needs while reducing reliance on lithium-based solutions.
