New Energy Storage Solutions Test Lithium-Ion’s Reign
Jul 31, 2024
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Yiyi Zhou, a clean power specialist at BNEF, and Evelina Stoikou, a senior associate on BNEF's energy storage team, dive into the future of energy storage technologies. They examine the competitive landscape for long-duration storage solutions that could rival lithium-ion batteries. The discussion includes insights from their Long-Duration Energy Storage Cost Survey, highlighting innovations like sodium-sulfur and molten salt batteries. They also explore how government policies are shaping the adoption of these technologies globally, particularly in China.
Long-duration energy storage technologies are emerging as cost-effective alternatives to lithium-ion batteries, particularly for applications requiring extended discharge periods.
China is at the forefront of long-duration energy storage adoption, driven by government support and ambitious goals for net-zero energy transitions.
Deep dives
Understanding Long-Duration Energy Storage
Long-duration energy storage (LDS) refers to technologies that can offer energy storage solutions for hours to days, distinct from traditional battery systems. There is no universal definition of what constitutes 'long duration,' with various organizations defining it differently; for instance, the US Department of Energy considers it to be storage lasting at least 10 hours. This eclecticism means that businesses developing LDS technologies may not classify themselves under the same umbrella, as they could be producing alternatives like advanced batteries with varying applications. Consequently, there are diverse use cases and business models in the energy storage sector, pushing the technology towards tailored solutions for specific energy needs.
The Dominance and Cost Competitiveness of Lithium-Ion and Alternative Storage Technologies
While lithium-ion batteries remain the prevalent technology for short-duration storage, long-duration energy storage technologies become increasingly cost-effective at extended discharge periods. Short-duration lithium-ion batteries are typically efficient for 2 to 4 hours while long-duration systems, such as compressed air and thermal storage, gain economic advantages over longer durations due to decoupled energy and power components. These technologies hold promise for larger-scale applications, particularly as their capital costs decrease significantly for longer storage needs. For example, adding larger tanks to flow batteries allows extended storage without directly increasing the number of battery cells, marking a clear financial advantage in longer-duration scenarios.
China's Role in Advancing Long-Duration Energy Storage Technologies
China is leading the way in long-duration storage technology, with several initiatives to enhance cost efficiency and deployment while aiming for net-zero transitions. The Chinese government recognizes long-duration energy storage as vital for its energy strategy, setting ambitious goals for commercialization and mandating energy storage alongside new renewable projects. Despite this, developers in China still struggle to capture sufficient revenue streams to justify the significant capital requirements of long-duration projects. As such, the country showcases a robust market that emphasizes technological advancement in energy storage while actively pursuing large-scale projects that keep costs competitive compared to global counterparts.
Emerging Technologies and Future Directions in Energy Storage
There is an array of emerging technologies shaping the future landscape of long-duration energy storage. Notably, innovations like gravity energy storage, liquid metal batteries, and supercritical CO2 energy storage are gaining traction due to their unique mechanics and operational advantages. Gravity energy storage relies on lifting and lowering masses to store energy, providing mechanical simplicity and durability despite its larger physical footprint and lower efficiency. Additionally, while technologies like sodium-sulfur batteries and iron-air systems show promise, their deployment and cost-efficiency compared to established options remain under active investigation, suggesting a complex and evolving energy storage sector.
With the rise of intermittent renewable energy generation, the need for long-duration energy storage is rising fast. Lithium-ion batteries currently dominate the market, with record-low prices fueled by a global oversupply in battery manufacturing, but a group of new energy storage technologies may be about to challenge this technology’s position.
On today’s show, Dana is joined by Yiyi Zhou, a BNEF clean power specialist, and Evelina Stoikou, a senior associate on its energy storage team, to review findings from their inaugural Long-Duration Energy Storage Cost Survey. Together they discuss the different types of long-duration energy storage studied in the report, whether these technologies can challenge the dominance of cheap lithium-ion batteries, and which countries are adopting these latest advanced storage options and why.
Complementary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal or on bnef.com
