Long-term energy storage market conditions

The energy transition has spurred the rapid development of long-term energy storage. At present, the definition of long-term energy storage is inconclusive. In 2021, the U.S. Department of Energy’s report on long-term energy storage mentioned that long-term energy storage is defined as at least 10 hours of continuous operation (discharge) and a service life of 15 to 20 years. According to application scenarios, long-term energy storage can be divided into two categories: home energy storage and commercial energy storage.

Currently, the conventional energy storage time of energy storage power stations in China is about 2 hours. Many people also classify 4-8 hours as long-term energy storage. In short, the industry will refer to the energy storage systems that can achieve charge-discharge cycles lasting longer than 4 hours or days or months, which are collectively referred to as long-term energy storage.

1.A variety of long-term energy storage technologies are emerging

For the moment, a variety of long-term energy storage technologies are emerging, mainly including mechanical energy storage, chemical energy storage, thermal energy storage and electrochemical energy storage. Different technologies have different business states, technology models and so on. Some of these technologies are already in use, while others are still at an immature stage. According to sorting out, pumped hydro storage is a long-term energy storage technology with commercial maturity in the current global market, while air compression and liquid flow technologies are emerging energy storage technologies.

However, these technologies still have many shortcomings due to technical performance, cost, or market risks at the moment. At present, the dominance of short-term energy storage lithium-ion batteries and pumped hydro storage in the energy storage market is clear. However, with the continuous advancement of long-term energy storage, an ideal low-carbon power system may require a diverse set of long-term solutions.

In the context of carbon peaking and carbon neutrality goals, with the rapid increase in the installed capacity of renewable energy such as wind power and photovoltaics, the instability of the global power system has intensified, which requires the energy storage system to play a role. Research modeled by McKinsey shows that by 2040, the long-term energy storage industry is likely to deploy 85-140TW/H of energy storage capacity, and the total electricity consumption of this energy storage may reach 10% of the total global electricity consumption.

2.The global accelerated deployment of long-term energy storage

① The United States takes the lead in tackling key problems of long-term energy storage technology

In September 2011, the U.S. Department of Energy took the lead in launching the "Long-term Energy Storage Research" program, which takes into account electrochemical energy storage, mechanical energy storage, thermal storage, chemical energy storage, etc., which will meet the duration and duration of grid flexibility. Any combination of energy storage technologies for cost targets.

In November 2021, the Global Long-Term Energy Storage Council (LDES Council) was announced. The commission said its mission was to "replace fossil fuels with zero carbon and address energy imbalances". "We see long-duration energy storage as a key pillar on the road to a carbon-free future," Google's head of clean energy said as he joined the global long-duration energy storage committee.

② China accelerates the deployment of new energy storage technologies needed in the field of energy storage

In early 2022, relevant documents issued by the Chinese government mentioned that by 2025, breakthroughs in long-term energy storage technologies such as hydrogen energy storage and thermal (cold) energy storage are required to expand the application of various energy storage forms.

It is necessary to promote the construction of new energy storage projects such as long-term electric energy storage, hydrogen energy storage, thermal (cold) energy storage, promote the development of various forms of energy storage, and support a comprehensive smart energy system building combined with the resource conditions of different regions and the demand for different forms of energy.

As China continues to optimize the layout of the Ministry of Energy, it will continue to deploy and support research, development and engineering applications of environmentally friendly, long-term technologies with high safety, service life of more than 15 years, said a researcher from the Dalian Institute of Chemical Physics. Chinese Academy of Sciences in an interview. 

According to the review, low-cost and long-life manganese-based energy storage lithium batteries, 100MW advanced compressed air energy storage technology, and a new generation of flow battery energy storage technology have become key projects in China. In March 2022 alone, there will be a number of energy storage demonstration projects such as air compression and liquid cooling. It can be seen that China has accelerated the layout of new energy storage technologies needed in the field of long-term energy storage.

3.Various technologies accelerate the competition for the long-term energy storage market

Currently, pumped hydro is the largest source of long-term energy storage in the grid, while lithium-ion batteries are the main source of new energy storage technologies, providing short-term energy storage capabilities.

① Emerging technologies in mechanical energy storage have launched projects

In recent years, in the field of mechanical energy storage, in addition to the most cost-effective traditional pumped storage energy storage, emerging new energy storage technologies such as compressed air and gravity energy storage have launched megawatt-level demonstration projects.In addition, new technologies such as thermal energy storage (molten salt) and chemical energy storage (hydrogen, ammonia) have also emerged or launched a series of demonstration projects.

② Flow battery is a popular long-term energy storage path in European and American countries

Flow batteries are a popular long-term energy storage path in Europe and the United States. Zinc8, Primus, Invinity and other European and American battery startups mainly focus on zinc flow batteries. Asian energy companies such as SUMITOMO ELECTRIC, RENCO, and PU NENG use vanadium redox flow batteries as their main technology. But a large determinant of flow battery viability is system cost, which is closely related to the choice of electrolyte active material.

Historically, vanadium redox flow batteries have been the preferred choice due to their various attractive electrochemical properties, including relatively long lifetimes. Currently, in addition to the widely used all-vanadium redox flow battery, there are also other flow batteries, such as iron-chromium flow batteries, all-iron flow batteries, zinc-bromine flow batteries, zinc-iron flow batteries, and sodium polysulfide-bromine flow batteries, zinc-manganese flow batteries, etc.

It is worth noting that there are still certain challenges in flow battery technology, and its efficiency is usually very low, which means that a considerable part of the energy cannot be recovered. In addition, side reactions can also degrade the battery over time, which means that the large-scale application of the technology still needs to be further matured and perfected.

4.Lithium-ion can still take the lead in long-term energy storage technology under 10 hours

The report shows that among various energy storage technologies, lithium battery energy storage is between long-term large-capacity energy storage and short-term high-frequency energy storage. Currently, lithium battery has large application scenarios in both aspects. Experts said that 90% of the installed capacity of electrochemical energy storage in China is lithium-ion battery technology, but the current lithium-ion battery energy storage technology is difficult to meet the demand for long-term energy storage of the new energy storage system of "new energy + energy storage" . Another expert pointed out that "battery technology is too expensive" for energy storage time of more than 8 hours.

But as prices drop, lithium-ion batteries can compete on cost with other energy storage technologies. At present, lithium-ion battery energy storage systems are being launched with 4 hours, 6 hours or even 8 hours of continuous energy storage. The U.S. Electric Power Research Institute recently stated that as the cost competitiveness of lithium-ion battery energy storage systems increases for longer durations, long-term energy storage technology may be difficult to compete with lithium-ion battery energy storage systems in the short term or even the next decade.   

The most common lithium-ion battery energy storage system is lithium ion solar battery at present. Industry insiders in China talked about a point of view: in the future, lithium-ion battery energy storage systems with a continuous discharge time of up to 10 hours may be more cost-competitive than pumped hydro storage. The achievement of this achievement lies in how lithium ions can quickly achieve 10 hours of continuous discharge. And for other energy storage technologies, the real way to compete is how they can provide longer duration than lithium-ion battery energy storage systems can provide. Once improved to 20 hours or 50 hours of continuous energy storage, these energy storage technologies will be very competitive.