Everyone’s talking about it, and Californians are buying in. Here’s what you need to know about this emerging grid sector.
Long-duration storage occupies an enviable position in the cleantech hype cycle. Its allure has proven more durable than energy blockchain, and its commercialization is further along than super-buzzy green hydrogen.
Depending on who you talk to, long-duration storage technology can knock out coal and gas peaker plants, turn renewables into round-the-clock resources and generally pave the way for a carbon-free grid.
But beyond the high-level predictions, it’s hard to find a consistent definition of what this category actually means and exactly what it’s supposed to do. That’s largely because a market for such things hasn’t really existed.
That’s starting to change. On October 15, a coalition of community-choice aggregators in California released the first major request for proposals targeting long-duration projects. To qualify, plants must be:
- 50 megawatts or greater
- Able to discharge electrons at that level for eight hours or more
- In operation by 2026
Companies interested in this process cover a range of technologies, including pumped hydro, gravity-based, compressed air and flow batteries, as well as current market leader lithium-ion batteries.
GTM previously covered the main technologies vying for this emerging grid role and recently published an explainer on green hydrogen, another long-duration contender. In light of the new effort to actually buy some of this stuff, GTM has compiled a guide to why it matters, what products and companies are competing to supply it, and what hurdles this category faces.
Why do we care about energy storage duration?
Wind and solar power are the fastest-growing sources of electricity globally, but they only produce at certain times. Energy storage makes this power useful at other times.
The largest source of grid storage today is pumped hydro, which uses power to pump water to a raised reservoir, then releases it and re-generates power when needed. But these large construction projects are hard to build these days.
Lithium-ion batteries have absolutely dominated new storage construction in recent years. But they rarely can deliver their full power capacity for more than four hours — that’s what people mean when they say “discharge duration.” Batteries technically can go for longer, but it generally costs more than it’s worth in today’s market dynamics.
While the term “long duration” puts the focus on the amount of energy it can store, a second, unspoken component is equally important. The technology must do this cheaply, which effectively means scaling more cost-effectively than lithium-ion batteries. If not, its technical ability won’t amount to much.
Developers are hard-pressed to find a place where long-duration storage makes money in a power market system today. Analysts believe it will become more useful as a higher share of electricity production comes from intermittent sources.
That’s why the California procurement is such a milestone: It puts real money on the table to build long-duration projects, which will then establish a market value for the technology and show the world that it’s ready for prime time.
“We are participating in the CCA procurement and see its release as a strong endorsement of our view that power markets are rapidly shifting to long-duration storage needs, particularly where there are high renewable penetrations and fossil plants are retiring like in California,” said Jon Norman, president of compressed air storage company Hydrostor.
This procurement also builds in several years before projects are due, which gives technologies time to mature even as more renewables join California’s grid.
“Six years — so much is going to look different in that period,” said Mateo Jaramillo, co-founder of aqueous battery startup Form Energy. Form is looking into the California RFP and could participate as a developer or a technology supplier.
How long is long-duration storage?
Entrepreneurs have claimed the title of “long duration” for a vast array of different technologies.
Several startups have advertised their exotic four-hour storage products as “long duration,” but that amounts to unconvincing marketing. Lithium-ion batteries already compete for four-hour applications far more cost-effectively than any small-batch and relatively unproven alternative. Not surprisingly, tech startups trying to challenge lithium-ion at this duration tend to fail.
Javier Cavada, CEO of cryogenic air storage company Highview Power, defined long-duration storage in a more goal-oriented way.
“‘Long duration’ is anything that is long enough to have a full day of renewable power as baseload,” he said in an interview.
On the longer side of the spectrum, Massachusetts-based startup Form Energy closed a deal with Minnesota utility Great River Energy to install a long-duration system by 2023. This project will be able to discharge 1 megawatt for up to 150 hours. Form has kept quiet about what its “aqueous air” battery looks like, but it’s claiming to be cost-competitive at a far longer duration than the field of competitors.
The California procurement sets the minimum threshold at eight hours of duration but leaves the door open to much more. Lithium-ion projects have achieved eight-hour duration in places like Long Island and Nantucket, and lithium-ion outnumbered the other technologies in the request for information that preceded the RFP. It will be up to the bidders to make the case that their chosen technology can provide value at whatever duration it can achieve.
Ultimately, the number of hours a machine can operate for matters less than its ability to do a useful job.
“‘Long duration’ is a very imprecise term which, as used today in the industry, currently covers everything from 6 to 1,000+ hours of rated discharge,” Jaramillo noted in an email earlier this year. “It’s time we start moving away from the designation of hours and start describing storage in terms of the function it can provide.”
What will long-duration storage actually do?
There’s no market niche in California that pays long-duration storage just for existing. These projects will need to apply their special skill set to actual market needs.
Delivering peak power is one promising role. Natural-gas-fired “peaker” plants currently do this, keeping Californians’ lights on when the sun sets and solar power disappears. A battery plant’s four-hour duration works pretty well for shifting a day’s solar production into the evening hours of peak demand. But then it runs out, and that’s a problem when the needs last longer.
Batteries cannot yet compete with gas plants in providing prolonged power for multiple days. But a cost-effective 24-hour duration storage system could handle longer demand peaks, and a 48-hour system could do even more.
New York state has officially targeted old, polluting peakers for retirement, floating the idea of using storage to replace them. Research there suggests batteries could only replace the 6 to 11 percent of peakers that run the least. Form Energy studied the role for longer-duration storage and found that it, combined with lithium-ion batteries, could knock out up to 83 percent of the state’s peakers cost-effectively and while providing the same level of reliability.
As more renewables arrive and flood the grid with power at the same time, they’ll create pressure to curtail or throw away whatever power isn’t needed when it’s generated. Wind and solar plant owners may feel financial pressure to build long-duration systems to capture that production and sell it at times when it can make more money. From a system perspective, that’s a more efficient use of the existing power plants.
Many regions have pronounced seasonal variation between sunny and rainy or cloudy months. Long-duration storage that’s cheap enough could store power for months to avoid curtailing solar in the summer and shore up power supplies when the gloomy weather sets in.
Hydrostor, which uses compressed air in caverns to store power, is developing systems as large-scale alternatives to transmission upgrades in Chile and Australia, Norman said.
Actual long-duration plants will likely play multiple roles. Cavada foresees Highview projects arbitraging cheap renewable generation daily, delivering peak power and even helping with stability services like inertia and spinning reserve. Highview’s technology is a great fit for the new procurement, Cavada said, but he also hinted that he’s already working on projects in California outside of this process.
What’s the catch?
The obvious barrier to a thriving long-duration storage industry is convincing generally conservative power plant customers that emerging technologies quite unlike anything the grid currently uses are safe bets for decades of operation.
Lab tests can reduce the risk, but nothing beats operational, megawatt-scale installations for proving that something works. That’s why the Form deal with Great River Energy is so crucial, as are early projects by Highview Power and Hydrostor. The big exception to technology risk is pumped hydro, which has been used at scale for decades. Those projects grapple instead with high capital expense and environmental concerns.
Another criticism attacks the framing of the technology: Is “long duration” just a nicer name for slow-discharge batteries?
For some technologies, this is the case. The physical nature of how the device moves electrons around limits how much power it can push at one time. The result is a long, slow trickle. “Long-duration storage” sounds a lot more impressive than “long, slow trickle technology.”
But other technologies can customize the power-to-energy ratio, meaning they can deliver as much power as is desired, for as long as is desired, within certain bounds. Highview Power, for instance, installs traditional turbines based on the megawatt capacity that’s needed and adds as many cryogenic tanks as necessary to get the desired energy capacity. It can add more tanks after a few years if longer-duration storage becomes desirable. That customizability puts the “slow battery” critique to rest.
Ultimately, long-duration storage providers need to figure out a business model that makes sense. Longer durations are not intrinsically a good thing; they are valuable insofar as they solve a problem that existing grid technologies cannot solve.
But the grid is changing in real time, so the power industry has to figure out how to anticipate problems before they emerge and assemble a roster of vetted tools to tackle them when that happens. The California CCAs aren’t asking for long-duration storage tomorrow; they’re looking at 2026.
This procurement may deliver a set of solutions in search of problems. Or it could give wily developers a chance to anticipate problems and propose business models that a traditional capacity procurement would never dream of.
If California, and other rapidly evolving grids, wait for grid problems to arrive before they vet solutions, they’ll be hard-pressed to respond nimbly.