As global renewable energy penetration increases, one drawback is that sources like wind and solar power only produce energy at certain times. If there is no need for this energy on the grid, it’s simply wasted. But energy storage can help harness this clean power and create a better financial return for asset owners.
While lithium-ion batteries are leading the market, they can only provide their full power capacity for about four hours—and trying to stretch them further gets expensive. For renewable energy to compete with gas-fired peaker plants in most markets, batteries must last much longer.
How long is long-duration storage? Answers can vary from one stakeholder to another. Recently, eight California community-choice aggregators issued the first major request for proposals targeting long-duration projects. They say that long-duration storage should be able to charge from the grid when renewable resources are at their peak, and discharge for periods of 8 to 16 hours when renewable production is lower. Cost-effective options that could last one or two days could come even close to competing with fossil fuels. Furthermore, batteries with the ability to cheaply store power for months could be useful in areas with significant variation between seasons by eliminating summer solar curtailment and deploying power as skies grow increasingly overcast.
Unfortunately, few technologies have succeeded at this scale. However, rapidly falling prices will only help further energy storage growth and innovation. BloombergNEF reports that lithium-ion battery cell prices have decreased by nearly 90% over the last decade. Also, White House officials are considering a federal standalone energy storage ITC, which the Energy Storage Association says would result in a 20 to 25% upgrade to Wood Mackenzie’s five-year market outlook in megawatt terms.
Deployments are expected to accelerate dramatically in 2021 with nearly 12,000 MWh of new storage—three times the amount added in 2020. Such progress will continue to enable renewables to be more stable resources, leading the way into a clean energy future.