Flexible, fast-responding and reliable – the growth of energy storage seems unstoppable. What could possibly go wrong?
Mar 4, 2025
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Swetha Sundaram, VP of Solar and BESS at RWE, and Julia Souder, CEO of the Long Duration Energy Storage Council, delve into the explosive growth of energy storage technologies. They discuss the transformative role of battery systems in transitioning to low-carbon energy, spotlighting opportunities for long-duration storage that could yield a $4 trillion market by 2040. The conversation also touches on the evolution of storage solutions, regulatory impacts, and how energy storage can address both immediate and seasonal energy demands, especially in high renewables regions.
The rapid growth of the energy storage market, driven by decreasing lithium-ion battery costs, is crucial for integrating renewable energy sources effectively.
Long-duration energy storage (LDES) technologies, capable of storing energy for eight hours or more, are vital for balancing intermittent renewable energy generation.
Future policy changes, including potential reductions in investment tax credits, could significantly impact the energy storage industry's growth and innovation.
Deep dives
Record Growth in Solar Energy and Storage
The solar energy sector experienced unprecedented growth in 2024, with projections indicating that 2025 will be equally significant. Major industry conversations are focusing on upcoming policy changes, supply chain improvements, and advancements in technology that will shape future solar projects. The increase in installations highlights the growing reliance on renewable resources, particularly solar, emphasizing the necessity of integrating effective energy storage solutions to enhance grid reliability and efficiency. As the sector evolves, industry leaders are convening to tackle these challenges and explore innovative opportunities.
Understanding Long Duration Energy Storage
Long Duration Energy Storage (LDES) technologies are defined as systems capable of storing energy for eight hours or more, crucial for balancing intermittent renewable energy sources. Various technologies contribute to LDES, including thermal, mechanical, and electrochemical storage solutions, all of which address distinct energy demands. The burgeoning field of LDES is gaining traction as it offers solutions for seasonal energy needs and enhances grid resilience. The potential for LDES to be integrated into existing infrastructure marks a pivotal shift away from predominantly short-duration storage systems.
Market Dynamics Shaping Energy Storage Growth
The energy storage market is experiencing rapid expansion due to several factors, including the decreasing costs of lithium-ion batteries and a surge in renewable energy adoption. This growth presents lucrative opportunities for energy storage developments, particularly in regions that require balancing intermittent solar and wind resources. Policies, such as tax incentives, have further stimulated the market by making investment in storage systems more attractive. These dynamics underscore the critical role energy storage plays in achieving a stable and efficient energy grid while addressing environmental concerns.
Challenges and Opportunities for Battery Systems
Battery energy storage systems face unique challenges, including concerns about initial costs and integration into existing energy setups. However, as developers increasingly pair batteries with solar projects, the business case is strengthened through enhanced efficiency and flexibility. Energy storage systems are becoming vital for providing backup power and grid services, highlighting the evolution of business models in response to market demands. As utilities recognize the potential of batteries, there is a growing expectation for energy storage resources to complement renewable generation effectively.
Potential Policy Impacts on Energy Storage
Future policy shifts in the U.S., particularly regarding investment tax credits (ITC) and tariffs on imports, could significantly influence the energy storage market. While the industry has evolved to be more self-sustaining, any reduction in tax incentives could dampen growth rates. Additionally, reliance on imports, especially from countries like China, poses potential cost challenges if tariffs are imposed. Navigating these policy uncertainties is essential for ensuring continued innovation and competitiveness within the energy storage sector.
Charge when it’s cheap, when energy is abundant, and discharge when the energy is needed.
The role of energy storage will be critical to the transition to low-carbon technologies. It’s an exciting time in the industry, with spectacular growth in battery storage markets in the US and around the world, and it’s predicted to continue. “We’re in the hockey stick growth phase,” says Swetha Sundaram, VP of solar and BESS (battery energy storage systems) at RWE, and a co-author of ‘The BESS Book’. She joins Ed Crooks on the show to look at where that growth is coming from.
The systems being built today mostly use lithium-ion technologies to store energy for a few hours. But there are huge opportunities for long-duration energy storage (LDES), too. The LDES Council, an industry group, estimates that the build-out of up to 8 TW of potential power supply from long-duration storage by 2040 represents a $4 trillion investment opportunity. Julia Souder is CEO of the LDES council, and she’s also on the show to talk about the next generation of storage.
Julia, Swetha and Ed are also joined by Energy Gang regular Melissa Lott, a Partner General Manager at Microsoft. She’s a PhD energy systems engineer, and she explains the different roles short and long-duration energy storage will have in the energy transition and the power grid of the future.
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