Governments and private companies have committed more than $58 billion to long-duration energy storage projects globally since 2019, according to recent analysis from Wood Mackenzie.
WoodMac said projects representing $30 billion are now either under construction or in operation. But despite that, the company said most long-duration storage is still nascent and will struggle to cost-effectively scale before 2030.
If all the projects committed funding during the last three years moved forward, it would lead to the installation of 57 GW of long-duration energy storage – the equivalent of three times the global energy-storage capacity deployed in 2022.
“To accelerate the energy transition, more renewable energy sources will be used for generating power, but this in turn presents challenges for the reliability and stability of the power system,” said Kevin Shang, Senior Research Analyst at Wood Mackenzie. “Some technology solutions exist today, but they are far from meeting society’s power needs.”
In addition to scaling up long-duration energy storage technologies, WoodMac said companies need to create new business models which will enable them to attract private investors and consider possibility of making a profit without subsidy support in the long run.
WoodMac said government support is also required to help lower upfront capital costs, provide revenue certainty, and generate market signals for investment mobilization and broader deployment of long-duration energy storage projects.
Long-duration energy storage, with longer durations of eight to approximately 100 hours, is promising as a low-cost solution to enable a grid with more renewable sources. But despite progress made, it faces a growing list of technical, financial, and business barriers to allow for broader deployment to prove economically competitive against other technologies.
Read Wood Mackenzie’s Long-Duration Energy Storage Report 2022 here.
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