July 31, 2024 • 30 mins
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
Links to research notes from this episode:
2024 Long-Duration Energy Storage Cost Survey: Tough Race - https://www.bnef.com/insights/34105
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is Dana Perkins and you're listening to Switched on
the BNAF podcast. Today's show is about long duration energy storage,
a potential answer to the intermittency for renewable energy, given
how fickle, whether it can be at times when you
need it for solar or wind power. How close are
we getting to that answer?
Speaker 2 (00:19):
Well?
Speaker 1 (00:19):
Today I am joined by analysts Yee Zoo, a clean
power specialist at BNAF, alongside Evelina Stoiku, who's from our
energy storage team. From electrochemical to thermal to mechanical. What
are the long duration energy storage technologies that are out
there and how mature are they? They draw upon notes
from the inaugural Long Duration Energy Storage Cost Survey. This
(00:41):
can be found at bn EF once logged into the
Bloomberg terminal, or at BNAF dot com. But right now,
let's jump into our conversation with Yee and Evelina about
some of the possible opportunities for long duration energy storage. Evelina,
(01:05):
thank you for joining today.
Speaker 3 (01:06):
Hi Dana, nice to be here, and Yee.
Speaker 1 (01:08):
Thank you for joining on the show.
Speaker 2 (01:10):
Thanks for having Austin.
Speaker 1 (01:11):
So we're going to talk about long duration energy storage
and the first question has to be what do we
mean by long What is the time frame that makes
it long duration versus just energy storage.
Speaker 3 (01:22):
Well, that is a very good question, and the reality
is that there's no consensus on the definition of long
duration energy storage. BENIF defines it as a storage technology
that can offer disurgeration of at least six hours. However,
different sources define it in different ways. For example, the
US Department of Energy classifies long drage and energy storage
(01:44):
with duration of at least ten hours, while Chinese agencies
define it as four. So it really varies.
Speaker 1 (01:50):
So the companies that are creating the technology for long
duration energy storage would not then classify themselves as long
duration energy storage providers necessarily because in many res they
may just be making batteries at how different applicability and
so is this is this an industry that I guess
largely look at each other as competitors and as technologies
that can be swapped out for each other or do
(02:12):
they have quite different use cases?
Speaker 3 (02:14):
Well, they can have very different use cases. And again,
because we're talking about technologies that can offer anywhere between
six to twenty four to one hundred hours, they're really
very different applications that are fit for for these durations.
So many of these companies or technologies cannot be swapped
out directly and their success might be dependent on different parameters.
Speaker 1 (02:37):
So we can talk about those different use cases as
we get into the technologies. And I think then the
question is, because there's no strict definition of what this
industry is, you had to make some choices regarding which
technologies you were going to look at, and you know
what those use cases were. So which technologies did you
decide to focus on and why did you pick them?
Speaker 3 (02:57):
Well, in our work we covered of our of different technologies. Specifically,
we covered seven broad long duration energy storage technology groups
and twenty technology types under each of these, but broadly
you can think of lds based on major classifications such
as electrochemical, mechanical, or thermal. Electrochemical storage technologies basically store
(03:20):
energy through reversible chemical reactions. They're also typically referred to
as batteries, and the most widely widely known type of
battery that's electrochemicals lithium ion, but others include flow batteries.
Now with mechanical energy is stored through utilizing the physical
movement of materials to store and release energy, and examples
of these technologies include compressed air and liquid air energy storage,
(03:42):
gravity energy storage, compressed gas energy storage, and novel pumped
hydro at last pog least with thermal we have energy
stored through heat, so energy can be used for heating
or cooling and power generation later. And there are multiple
subcategories under thermal energy storage.
Speaker 1 (03:58):
So oftentimes when we end up talking about on the
show or lithium ion batteries because invariably they're a source
of storage for the energy system, but also very much
in vehicles, which is another space that we cover. And
you know, we've just gone through a series of different
technologies that you looked at within these electrochemical, mechanical, and
thermal categories. Of those three categories, or if you want
(04:19):
to name a specific technology that works too, which ones
are most cost competitive with lithium ion batteries.
Speaker 3 (04:26):
So when we're thinking about the cost competitiveness of long
duration energy storage technologies against lithium ion, there are multiple
ways to think about it. The costs really vary by
dissart duration, and it also really varies by by region.
While the typical storage duration for lithiumon batteries is two
to four hours, long duration energy storage technologies tend to
be more cost competitive over longer durations. So if we're
(04:49):
to look at that specific duration of two to four hours,
actually none of these long duration energy storage technologies is
really competitive. However, one of the very unique characteristics of
long duration energy storage is that the costs, specifically capital
costs drop at higher durations. That happens because the energy
and the power related components of these systems tend to
(05:10):
be decoupled versus this is not the case for lifiumion.
If we take an example of flow batteries, you can
increase the dis sharg duration of a system by adding
bigger tanks to store the liquid electrolyte versus in the
case of liftumine batteries, you would need to add more
battery cells. So for lds, this means that capital costs
drop for higher durations and they become more cost competitive
(05:31):
for these higher durations. The technologies that we've seen as
the most cost competitive for these higher durations tend to
be compressed air and thermal energy storage, and many of
these others might become cost competitive for longer durations.
Speaker 1 (05:45):
Now in the storage market, specifically, the THEAMYA and you've
seen China be a really dominant force in terms of
really driving cost declines and producing its scale. And is
China also involved in some of these other technologies and
which ones are they most interested in?
Speaker 2 (05:59):
Yeah, well, China has been leading the Lisima batteries because
of this massive adoption of lisa my batteries in both
electrical vehicle industry and also stationary energy storage markets. For
launderation storage, actually, China is also leading on that front
as well. So the technology deployment in China for launderation
storage is that generally cheaper compared to the rest of boards.
(06:19):
This is especially true for technologies such as compressed aian
gies storage and flow batteries, which China has considered them
as the major focus for now for the nature, so
most of those technologies actually at least fifteen percent cheaper
compared to those deployed in other markets. This is mainly
due to the more advanced commercial status of those technology
(06:39):
deployment in China compared to the rest of boards. So
while other nations are still trying to understand the value
of different launderation storages and also developing piloting projects, China
is starting to deploy those massive projects. We're seeing some
records setting large scale projects that has been developed in China.
Some of those are with gig wle hours scaled well,
(07:00):
but most of those projects deployed in the rest of
WOARLD is actually less than five macworld or less than
ten awards, so those are mainly those piloting projects. So
this massive adoption of laundrosan storage deployed in China has
been one of the major driver in driving down the
course of laundrotion storage in China currently.
Speaker 1 (07:17):
And is it a fragmented market or are there a
few suppliers that are actually really heavily involved in some
of these specific technologies, because the parallel I think about
is the gigafactories that have risen in the luthium ion space,
and those are certainly very big projects focused on you know,
specific companies that you're doing them. So how fragmented or
consolidated is this market in China?
Speaker 2 (07:38):
So lntruition storage is you're an emergent technology, so there
are some emergent companies entering into this market. For instance,
for flow batteries, we are seeing over thirty energy storage
system greater in this market, so this is quite a
large number. And this number is continuously increasing over time
as well. So I would say this is a quite
fragmented market for now, but over time on when the
(08:00):
market is mature, we're likely to see some consolidation or
some markets some companies may need to acceed markets ultimately
because of the fist competition and limited market size.
Speaker 1 (08:11):
And how supportive is the policy environment in China towards
these technologies, because they've certainly been very supportive of lithiumyon
and of solar. Is this very much in the government sites.
Speaker 2 (08:22):
As well, definitely, So the Chinese government has released multiple
policies driving the adoption of laundrousian storage since twenty twenty two.
So it has identified laundursion storage as one of the
key abler for its energy in netz zero transition by
twenty sixty. And also it has set its target to
reach early stage commercialization of nondrousion storage by twenty twenty
(08:44):
five and full commercialization by twenty thirty. So we are
seeing a large number of I think utility scale companies
and also great companies or provincial governments that's starting to
enter into this market and start to build those large
scale demonstration projects to get first move. And this has
been one of the major driver dropping the adoption of
laundrotion storage in China currently. In addition, China mandates a
(09:08):
certain amount of energy storage to be paired with new
build wind and solar projects, So this has been one
of the major driver of energy storage adoption in China currently,
and this applies to both short duration storage and laundurition storage.
So this has been meaningful I think policy in driving
the adoption of those laundroation storage in China.
Speaker 1 (09:26):
Yeah, we really robust domestic market because the renewables industry
is taking off, so then this follows and complements it. Yeah,
which then leads me to are there other countries that
are also really keeping a close eye on this? And
I'm thinking about perhaps the US. We have the Inflation
Reduction Act that has put renewables on the map in
the US. Has that then also created a market for
(09:48):
long duration energy storage? And is there really anywhere in
the world that's looking like China.
Speaker 3 (09:53):
At the moment?
Speaker 2 (09:54):
So I think in nan Chinese markets, there's a growing
consensus in terms of the importance of laundrosians over time,
So many countries are calling for need of launchurition storage
as one of the key able for its energy transition
over time. But I would say most of the policies
support for from non Chinese markets are quite limited to date.
One of the major reasons is that most of the
(10:16):
projects in other markets are economic driven rather than policy driven.
So we needs strong financial incentives to drive those adoptions
of those projects in non Chinese markets. But I think
the financial incentives are quite limited to date, which is
not sufficient to drive the economic buildouts of laundrous storage
(10:37):
to date.
Speaker 1 (10:38):
So you've already established that these are capital intensive projects
and in some cases very much right now. They are
not compelling from a cost standpoint in that they don't
pay for themselves. So we are certainly looking in an
industry that needs to be experiencing pretty dramatic cost declines
to have much wider deployment in the future without policy support.
(11:01):
Outside of China, though, where a lot of the support
for clean tech is often coming from the companies themselves
and they're looking for independent backing. You know, what is
the real driving force for long duration energy storage? Is
it actually policy in Europe or North America or is
it really coming from private industry and investors.
Speaker 2 (11:21):
I think there are two types of revenue resource or
investment resources for launduration storage currently, so partially they come
from the government, So the Department of Energy of the
US is actually selecting a few technologies and provide funding
for those technologies to establish their demonstration projects. And on
the other hand, I think a lot of high profile
(11:42):
companies are receiving a lot of fundings from PBC firms.
We are interesting in developing the next twenty four to
seven clean firm technologies which can enable the future Nazero transition.
So actually we're seeing a surge of investment in laundering
storage since the past three years.
Speaker 1 (11:58):
One of the things that Clerk Curry, who a lot
of the work that we have on the innovation side
of things, she pointed out that actually a quarter of
VC financing at this point in time is actually going
into clean technologies, and so this very much echoes the
fact that a lot of vcs have their strategy to
see some of these technologies where there is so much need,
hoping that in the future they will actually end up
(12:19):
getting much bigger and growing at scale.
Speaker 2 (12:22):
And I think in addition, there are some corporate firms,
technology firms, big technology firms in US are highly interesting
in those technologies is one way to enable your twenty
four seven energies supply for their data centers such as Microsoft,
such as Google, all of those are actually looking to
developing those new technologies at their data center as well.
Speaker 1 (12:43):
So companies that are actually really interested in decarbonizing are
leading the way and actually driving technology deployment.
Speaker 2 (12:50):
Yes, it's currently I think those corporate firms investing significantly
in those new technologies, and they appear to be the
frame runner of this technology sector.
Speaker 1 (13:01):
So at the beginning of the show, we talked about
how this really isn't a cohesive space, lots of different
definitions regarding what constitutes longeration energy storage to begin with,
and this is emerging tech. Well, there are some incumbent
technologies and we'll get to that because some of those
are becoming popular again. But in this world of emerging tech,
and we can continue to use China as the framework
(13:21):
to discuss this to begin with, But which technologies are
most cost competitive in China and perhaps some of the
ones that maybe are more cost competitive in other parts
of the world. Let's pick a couple sample technologies and
talk about them, and also talk about kind of the
mechanics we'll get into some of the mechanics of how
they work, because I think it would be nice for
us to have some sort of picture in our mind
(13:43):
of what some of this technology actually looks like in
the amount of space it takes up. So when we
first start thinking about this, I mean one of the
ones that I'm aware of is compressed gas. Can you
talk a little bit about compressed gas as a technology.
Speaker 2 (13:56):
So in general of China is cheap of foremost relatively
too launche usion storage technologies, including compressed there and in
the flow batteries, which has been deployed since ninety seventies.
So it has been a long history of those technologies
and this is the major focus of China's currently. So
I would say most of those technology relatively material. Launduction
storage technologies are cheaper in China, are way more cost
(14:18):
competitive in China compared to the rest of awards. But
there are more laundrotion storage technology that are being developed
outside of China. Infecting our costs survey, we have received
cost data for over twenty different laundation storage technologies globally
and twenty yeah twenty, So most of those technologies that
developed outside of China including technologies that compressed gas or
(14:39):
other technologies which are just the emergent and their adoption
of those technologies in China are quite limited to date.
Speaker 1 (14:46):
And what is the split between technologies that existed from
a while ago, so the nineteen seventies, like pumped hydro
or compressed gas versus new and like really properly new
technology that's emerged in let's say the last five to
ten years.
Speaker 2 (14:58):
Yeah, I think among all a different launchrution stores technologists
compressed the guests and uncompressed area and the flow batteries
are too, Matio technologists. Other technologists are just emerging in
most of them are as piloting phase or on the face.
Speaker 1 (15:12):
So many of them are actually in this piloting phase
of that twenty. Yes, I suppose there's something to be
said for with the older existing technologies, they've had some
time to ramp up, and then that would be the
reason that we're actually looking for some additional solutions that
can be used in a way that perhaps the existing
technologies can't. Okay, So Evelina, I did ask for some
(15:32):
sort of technical picture in my mind of a technology,
and there's one in particular that I would like to
know more about because I think the title of it
actually is really compelling. It's called supercritical CO two energy storage.
What is it and what does it look like?
Speaker 3 (15:49):
Yeah, well maybe we need to go back to physics class,
and please no, So if we go back to our
physics class, the phase of materials depends on pressure and temperature,
and basically, with supercritical CO two, it's a fluid state
of carbon dioxide where it's held above its critical temperature
(16:10):
and critical pressure. So if you, for example, lower the pressure,
it becomes a gas, or if you lower the temperature,
it becomes a liquid. So the phase of material depends
ultimately on pressure and temperature, and for supercritical carbon dioxide
CO two, it's just a state where that material, or
that a substance, it's held at a temperature and pressure
(16:32):
above that critical point where distinct liquid and gas phases
do not exist.
Speaker 1 (16:38):
So when I started working in this industry, renewables were
ninety percent hydro power, and as such, as someone who
perhaps wasn't very creative when approaching their master's thesis, I
decided to write my master's thesis about hydropower. So invariably
I have a personal interest in this, but additionally we
have a lot of aging infrastructure in that space, and
(16:58):
it has historically served as a source of kind of
a great source of flexibility and energy storage. And as
we are trying to increase the amount of renewables on
the grid and we are looking to new and old technologies,
I want to know a little bit about what potential
pump tydro has in the future of the storage space
and whether or not it will be a comeback story.
Speaker 2 (17:21):
So I think palm tydro is indeed a very well
established technology and the destorage industry, and in fact, palm
hydro is the dominant technology besides lisima batdteries today. But
as we all know that developing pump tido could be
quite challenging both from the I think capital requirement perspective
and also the environmental impact perspective. In the addition, it
(17:42):
requires a very long time to get those projects developed.
But as we are seeing higher renewbal penetration growthing, there's
some renewed interest in palm taijo in markets such as China,
such as India, such as Europe such as Australia and others.
So there's indeed a comeback story of pump tijo but
there are some challenges associated with developing those green field
(18:05):
projects globally. To date, most of those activities actually in China.
Speaker 1 (18:09):
Again, so there's the new projects, but then there's the
aging infrastructure. Is that something that people are looking at
in close detail and when we're then repairing and retrofitting
existing pump hydro projects, is there new technology within that
like best available technology that's moving in or is that
space not really changed a lot in the last several decades.
Speaker 2 (18:27):
In fact, we are seeing some new pump tido technologies
or we called novel pump tydo technologies, so we have
actually collected some cost data for those projects as well.
So one of the I think high profile technology is
called high density pump tijo. So instead of using water
as a storage medium, this type of new technology used
flud with higher density than water, so this allows a
(18:49):
lower elevation and smaller footprints required to deliver a similar
amount of energy compared to those conventional ones. However, most
of those novel pump ygo technologists, as you, very early
stage of developments and most of those technology will be
developed by twenty thirty, so it's not a neutron story.
Speaker 1 (19:07):
So let's jump in on another technology that is of
interest at the moment, So gravity energy storage. I like
the name of this one too, just because it has
gravity in the name. Talk to me about gravity energy storage.
What is it and kind of what is the potential?
Speaker 3 (19:21):
Well. Gravity energy storage is another technology that is gaining
a lot of attention in use and media, primarily also
because it's very different from a lot of the electrochemical
solutions that were used to and seen in the past.
The way it works is by using energy to raise mass,
storing energy and potential energy by maintaining it elevated, and
(19:44):
then dropping it and releasing that energy when they want
to release the energy back to the grid. So it
basically uses electricity or energy to lift these masses when
prices are low, and then lower it when prices are
are high or where energy is needed to discharge it
in the grid. There are many advantages to gravity energy storage,
(20:06):
but also quite a lot of drawbacks. One of the
advantages is that the design is relatively simple. It's mechanical,
so it also has a long lifetime. These systems tend
to have a long lifetime because their life depends on
the lifetime of mechanical components. Which are generally pretty advanced.
They don't degrade, and we were quite familiar with it
because they're also used in other industries. However, drawbacks include
(20:30):
low round trip efficiency and very significant physical footprints, so
you needed a lot of space for such systems, so
it makes citing them and finding appropriate locations for them
quite difficult.
Speaker 1 (20:42):
So another issue with land use. But what does low
round trip efficiency mean?
Speaker 3 (20:46):
Basically means that you need to put more energy into
charging it and you get less energy out of it,
so you have a lot of energy losses while charging
and discharging.
Speaker 1 (20:56):
Yeah, it's for fear of stating the obvious batteries in
many respects and well hydrogen actually being one of those
things where there are use cases for it, but it
takes energy to make energy is energy storage invariably, there's
so much that we have to put into it in
order for it to be effective. And then it's that
ratio right on what it is that you actually get
out of it when you need it and for how long.
So nothing is a perfect solution. Everything fits to a
(21:20):
specific use case and in this case enabling renewables. So
I want to circle back on cost because cost is
an important part of deployment of any technology. And if
we think about China where they are actively supporting long
duration energy storage co located with renewables, and you're seeing
this roll out happening, what kind of percentage or even
(21:42):
in absolute terms, what are we seeing in terms of
cost for this overall project. Is it a really big
financial part of it or is it something that's sort
of a no brainer and it's pretty obvious that you
would want to include it because building over capacity is
going to be so much more expensive.
Speaker 2 (21:58):
I think it's how to get and some projects, but
I think in general it would be most of the
developers in channel will struggle to collect sufficient revenue streams
for laundursion storage to cover your initial costs. So most
of those projects are not actually economically stupn or not
economically viable in China.
Speaker 1 (22:18):
Over a long period of time, Like the payback on
the capital expenditure will not come back on this specific
part of it.
Speaker 2 (22:24):
It's hard to say for now because most of those
Laundusian storage startups or companies that claim me very ambitious
cost reduction targets. It's applicable to anyone in the industry,
but I think it's remains to be seen how cost
effectively der technology can ultimately become and.
Speaker 3 (22:42):
If I can add something. There may be two ways
to think of costs. The way that we looked at
it for this work that we put out was in
terms of capital costs, but another way to look at
it is in terms of level life's cost of electricity.
So what we focus on this report is capital costs,
so basically the cost of a fully installed system. That's
the first step into making analysis. That's a major input
(23:03):
into levelized costs of electricity, which we're going to be
doing as well for these technologies, so we'lltch out for that.
But generally, while levelized costs of electricity might make some
of these technologies look more cost competitive, many investors might
hesitate to use it as a metric because the lifetimes
of these projects are very, very long, and we're talking
(23:23):
about long payback periods. So capital cost remains a very
important metric. But it's important to mention that they're both
and different companies and different agencies might be using both,
and they're both helpful in making decisions and evaluating these technologies.
Speaker 1 (23:38):
So, because this is certainly an emerging technology space, if
we look away from the established technologies that have a
new life potentially in front of them, and we look
at some of the more emerging technologies. You have choices
to make regarding your time. I used to ask this
question actually quite frequently on the show. So I'm going
to bring back a favorite question type of mind, which
is use the export. What are you watching and what
(23:59):
are you ignoring? At least for right now. You can
always change your mind next time you come on the show.
Are you watching or ignoring sodium sulfur batteries?
Speaker 3 (24:08):
Yes, it's definitely one of the technologies that we're looking at.
And a good way maybe to frame it is that
we keep an eye on all of these long duration
and restorage technologies, and there are many that maybe we
didn't have the chance to talk about today. These include
sodium sulfur like you mentioned, and because they make a
smaller share in terms of deployments, maybe they're not the
center focus of attention. So I wouldn't want to count
(24:30):
any of them out, or just maybe paying less attention
and focusing on the metric of deployment in terms of
how we would split our time.
Speaker 1 (24:38):
So you're not ignoring them, but they don't get their
own research note, yet it's the right way to put it.
Speaker 3 (24:41):
Not yet. Okay, we look forward and we're excited to
see new technologies gaining traction so that we can write
reports about all of them.
Speaker 1 (24:49):
So how about liquid metal batteries another name that I
just love. This is the show of favorite names for
me for some reason. But liquid metal batteries, you know,
how close are they to getting their own research note?
Speaker 3 (25:00):
Again, they're probably in that category that they can't get
their own research note yet. If we're to define them,
they operate using liquid electrolytes, with a defining characteristic being
a molten salt electrolyte. But again, maybe they don't have
a note on them yet.
Speaker 1 (25:13):
And then another one that is an emerging technology. Tell
me a little bit about sodium iron chloride batteries.
Speaker 3 (25:20):
So it's another type of high temperature rechargeable battery. Again
it's grouped in one of these other technologies that we
didn't have enough data points to get their own section.
But another technology that we look out for.
Speaker 1 (25:34):
Not enough data points then means the world is not
yet putting it all together. That we may see as
more projects come to light and ability to analyze it further.
I want to know on this spectrum of how long
that energy can be stored for which one has the
longest duration energy storage? And then within this definition of
just you know China, in some cases saying only four
(25:55):
hours is necessary to be classified as long duration energy storage,
what is the least long duration and what is the
most long duration technology?
Speaker 3 (26:03):
Yeah, maybe we can give some context in terms of
the data points that we're received to give you a
sense of where we see the most need in terms
of durations. So about forty percent of the data points
that we collected were actually four dishort durations of one
to four hours, and then forty two percent was for
a dishort duration between five and ten hours. So we
(26:24):
have a majority of the data representing technologies and projects
that are between one and ten hours. This means that
the industry is still moving and around that duration phase
just because one many of them are early stage, so
it makes more sense to do a smaller project for
a shorter duration to prove it as a concept. And
(26:45):
another key reason that we're seeing shorter durations is because
that's the need we're currently seeing. So as Ye previously mentioned,
there's not a lot of policy supporting long duration in
many markets beyond these that we're seeing that I previously mentioned,
and there's not a way that these storing energy for
(27:06):
long durations is compensated in energy systems such as in
the US. That's one of the reasons that we're seeing
a shorter duration. And within each of these durations, there
are different technologies that might be competing. For example, thermal
energy storage typically makes sense for higher durations, so you
might see more thermo energy storage projects for higher durations.
Speaker 1 (27:26):
What's the maximum number of hours a thermal energy storage
project could do.
Speaker 3 (27:30):
So it really varies. We can see durations up to
twenty four hours, so from the data point that we collected,
in addition to costs, we ask people about different performance
metrics including duration and thermal energy storage could really vary
between two to four hours up to twenty.
Speaker 1 (27:47):
Four So some of these technologies, if I really put
it simply, are being used as speakers. Meanwhile, others are
actually being used for let's say, night time energy for
solar or for changes to weather patterns. When we're thinking
about other parts the renewables as opposed to being plugged
in for peak demand. Yes, but both use cases are
valid within this launderation.
Speaker 3 (28:08):
Energy storage.
Speaker 2 (28:09):
It highly depends, so we are seeing companies developing for
hours up to one hundred hours more launderation storage, so.
Speaker 1 (28:15):
What can do one hundred hours.
Speaker 2 (28:17):
Some companies, I think one of the I think most
high profile companies called form Energy, which is a startup
in the US, is actually developing the iron air technology
that can serve duration over one hundred hours. And I
think one of the major use case of those technologies
are actually pelling with renewable projects to turn the renewables
into the round the clock electricity supply and they can
(28:39):
display the core and gas pop plants, and also they
can also defer the great investments in some markets or
some region. Actually, we're seeing quite some projects that are
being developed by this company in the US. Actually, some
utilities are very interesting in such kind of technologies as
one of the I think promising options to displace those
Asian core and the guess power plants. So this is
(29:01):
one of the I think major use case we are
seeing for those and new storage. But oftentimes we are
seeing a lot lot of intro day and new storage,
so duration with six up to twelve hours, so they're
actually paired with solar assets to generate elegacy during the
evening peak and also over the nighttime, So this is
another dominating usage of I think lun duration storage use
(29:23):
case currently we are seeing.
Speaker 1 (29:25):
I mean, I know you've both said that the majority
of the market is at these kind of single digit
to kind of low double digit numbers of hours, but
I find the one hundred hour use case to be
incredibly interesting and will be watching that so closely because
to your point, it's not about these technologies competing with
one another for market share. It's actually about how they
(29:46):
can displace existing legacy energy like gues so ye ye. Evelina,
thank you so much for joining today and talking about
this really rapidly evolving space with so much potential and
necessity for the rollout of renewables deployment.
Speaker 2 (30:02):
Thank you Dana for having us.
Speaker 3 (30:04):
Thank you, Dania.
Speaker 1 (30:13):
Today's episode of Switched On was produced by Cam Gray
with production assistance from Kamala Shelling. Bloomberg NIF is a
service provided by Bloomberg Finance LP and its affiliates. This
recording does not constitute, nor should it be construed as
investment advice, investment recommendations, or a recommendation as to an
investment or other strategy. Bloomberg ANIF should not be considered
(30:34):
as information sufficient upon which to base an investment decision.
Neither Bloomberg Finance LP nor any of its affiliates makes
any representation or warranty as to the accuracy or completeness
of the information contained in this recording, and any liability
as a result of this recording is expressly disclaimed
This is Dana Perkins and you're listening to Switched on
the BNAF podcast. Today's show is about long duration energy storage,
a potential answer to the intermittency for renewable energy, given
how fickle, whether it can be at times when you
need it for solar or wind power. How close are
we getting to that answer?
Speaker 2 (00:19):
Well?
Speaker 1 (00:19):
Today I am joined by analysts Yee Zoo, a clean
power specialist at BNAF, alongside Evelina Stoiku, who's from our
energy storage team. From electrochemical to thermal to mechanical. What
are the long duration energy storage technologies that are out
there and how mature are they? They draw upon notes
from the inaugural Long Duration Energy Storage Cost Survey. This
(00:41):
can be found at bn EF once logged into the
Bloomberg terminal, or at BNAF dot com. But right now,
let's jump into our conversation with Yee and Evelina about
some of the possible opportunities for long duration energy storage. Evelina,
(01:05):
thank you for joining today.
Speaker 3 (01:06):
Hi Dana, nice to be here, and Yee.
Speaker 1 (01:08):
Thank you for joining on the show.
Speaker 2 (01:10):
Thanks for having Austin.
Speaker 1 (01:11):
So we're going to talk about long duration energy storage
and the first question has to be what do we
mean by long What is the time frame that makes
it long duration versus just energy storage.
Speaker 3 (01:22):
Well, that is a very good question, and the reality
is that there's no consensus on the definition of long
duration energy storage. BENIF defines it as a storage technology
that can offer disurgeration of at least six hours. However,
different sources define it in different ways. For example, the
US Department of Energy classifies long drage and energy storage
(01:44):
with duration of at least ten hours, while Chinese agencies
define it as four. So it really varies.
Speaker 1 (01:50):
So the companies that are creating the technology for long
duration energy storage would not then classify themselves as long
duration energy storage providers necessarily because in many res they
may just be making batteries at how different applicability and
so is this is this an industry that I guess
largely look at each other as competitors and as technologies
that can be swapped out for each other or do
(02:12):
they have quite different use cases?
Speaker 3 (02:14):
Well, they can have very different use cases. And again,
because we're talking about technologies that can offer anywhere between
six to twenty four to one hundred hours, they're really
very different applications that are fit for for these durations.
So many of these companies or technologies cannot be swapped
out directly and their success might be dependent on different parameters.
Speaker 1 (02:37):
So we can talk about those different use cases as
we get into the technologies. And I think then the
question is, because there's no strict definition of what this
industry is, you had to make some choices regarding which
technologies you were going to look at, and you know
what those use cases were. So which technologies did you
decide to focus on and why did you pick them?
Speaker 3 (02:57):
Well, in our work we covered of our of different technologies. Specifically,
we covered seven broad long duration energy storage technology groups
and twenty technology types under each of these, but broadly
you can think of lds based on major classifications such
as electrochemical, mechanical, or thermal. Electrochemical storage technologies basically store
(03:20):
energy through reversible chemical reactions. They're also typically referred to
as batteries, and the most widely widely known type of
battery that's electrochemicals lithium ion, but others include flow batteries.
Now with mechanical energy is stored through utilizing the physical
movement of materials to store and release energy, and examples
of these technologies include compressed air and liquid air energy storage,
(03:42):
gravity energy storage, compressed gas energy storage, and novel pumped
hydro at last pog least with thermal we have energy
stored through heat, so energy can be used for heating
or cooling and power generation later. And there are multiple
subcategories under thermal energy storage.
Speaker 1 (03:58):
So oftentimes when we end up talking about on the
show or lithium ion batteries because invariably they're a source
of storage for the energy system, but also very much
in vehicles, which is another space that we cover. And
you know, we've just gone through a series of different
technologies that you looked at within these electrochemical, mechanical, and
thermal categories. Of those three categories, or if you want
(04:19):
to name a specific technology that works too, which ones
are most cost competitive with lithium ion batteries.
Speaker 3 (04:26):
So when we're thinking about the cost competitiveness of long
duration energy storage technologies against lithium ion, there are multiple
ways to think about it. The costs really vary by
dissart duration, and it also really varies by by region.
While the typical storage duration for lithiumon batteries is two
to four hours, long duration energy storage technologies tend to
be more cost competitive over longer durations. So if we're
(04:49):
to look at that specific duration of two to four hours,
actually none of these long duration energy storage technologies is
really competitive. However, one of the very unique characteristics of
long duration energy storage is that the costs, specifically capital
costs drop at higher durations. That happens because the energy
and the power related components of these systems tend to
(05:10):
be decoupled versus this is not the case for lifiumion.
If we take an example of flow batteries, you can
increase the dis sharg duration of a system by adding
bigger tanks to store the liquid electrolyte versus in the
case of liftumine batteries, you would need to add more
battery cells. So for lds, this means that capital costs
drop for higher durations and they become more cost competitive
(05:31):
for these higher durations. The technologies that we've seen as
the most cost competitive for these higher durations tend to
be compressed air and thermal energy storage, and many of
these others might become cost competitive for longer durations.
Speaker 1 (05:45):
Now in the storage market, specifically, the THEAMYA and you've
seen China be a really dominant force in terms of
really driving cost declines and producing its scale. And is
China also involved in some of these other technologies and
which ones are they most interested in?
Speaker 2 (05:59):
Yeah, well, China has been leading the Lisima batteries because
of this massive adoption of lisa my batteries in both
electrical vehicle industry and also stationary energy storage markets. For
launderation storage, actually, China is also leading on that front
as well. So the technology deployment in China for launderation
storage is that generally cheaper compared to the rest of boards.
(06:19):
This is especially true for technologies such as compressed aian
gies storage and flow batteries, which China has considered them
as the major focus for now for the nature, so
most of those technologies actually at least fifteen percent cheaper
compared to those deployed in other markets. This is mainly
due to the more advanced commercial status of those technology
(06:39):
deployment in China compared to the rest of boards. So
while other nations are still trying to understand the value
of different launderation storages and also developing piloting projects, China
is starting to deploy those massive projects. We're seeing some
records setting large scale projects that has been developed in China.
Some of those are with gig wle hours scaled well,
(07:00):
but most of those projects deployed in the rest of
WOARLD is actually less than five macworld or less than
ten awards, so those are mainly those piloting projects. So
this massive adoption of laundrosan storage deployed in China has
been one of the major driver in driving down the
course of laundrotion storage in China currently.
Speaker 1 (07:17):
And is it a fragmented market or are there a
few suppliers that are actually really heavily involved in some
of these specific technologies, because the parallel I think about
is the gigafactories that have risen in the luthium ion space,
and those are certainly very big projects focused on you know,
specific companies that you're doing them. So how fragmented or
consolidated is this market in China?
Speaker 2 (07:38):
So lntruition storage is you're an emergent technology, so there
are some emergent companies entering into this market. For instance,
for flow batteries, we are seeing over thirty energy storage
system greater in this market, so this is quite a
large number. And this number is continuously increasing over time
as well. So I would say this is a quite
fragmented market for now, but over time on when the
(08:00):
market is mature, we're likely to see some consolidation or
some markets some companies may need to acceed markets ultimately
because of the fist competition and limited market size.
Speaker 1 (08:11):
And how supportive is the policy environment in China towards
these technologies, because they've certainly been very supportive of lithiumyon
and of solar. Is this very much in the government sites.
Speaker 2 (08:22):
As well, definitely, So the Chinese government has released multiple
policies driving the adoption of laundrousian storage since twenty twenty two.
So it has identified laundursion storage as one of the
key abler for its energy in netz zero transition by
twenty sixty. And also it has set its target to
reach early stage commercialization of nondrousion storage by twenty twenty
(08:44):
five and full commercialization by twenty thirty. So we are
seeing a large number of I think utility scale companies
and also great companies or provincial governments that's starting to
enter into this market and start to build those large
scale demonstration projects to get first move. And this has
been one of the major driver dropping the adoption of
laundrotion storage in China currently. In addition, China mandates a
(09:08):
certain amount of energy storage to be paired with new
build wind and solar projects, So this has been one
of the major driver of energy storage adoption in China currently,
and this applies to both short duration storage and laundurition storage.
So this has been meaningful I think policy in driving
the adoption of those laundroation storage in China.
Speaker 1 (09:26):
Yeah, we really robust domestic market because the renewables industry
is taking off, so then this follows and complements it. Yeah,
which then leads me to are there other countries that
are also really keeping a close eye on this? And
I'm thinking about perhaps the US. We have the Inflation
Reduction Act that has put renewables on the map in
the US. Has that then also created a market for
(09:48):
long duration energy storage? And is there really anywhere in
the world that's looking like China.
Speaker 3 (09:53):
At the moment?
Speaker 2 (09:54):
So I think in nan Chinese markets, there's a growing
consensus in terms of the importance of laundrosians over time,
So many countries are calling for need of launchurition storage
as one of the key able for its energy transition
over time. But I would say most of the policies
support for from non Chinese markets are quite limited to date.
One of the major reasons is that most of the
(10:16):
projects in other markets are economic driven rather than policy driven.
So we needs strong financial incentives to drive those adoptions
of those projects in non Chinese markets. But I think
the financial incentives are quite limited to date, which is
not sufficient to drive the economic buildouts of laundrous storage
(10:37):
to date.
Speaker 1 (10:38):
So you've already established that these are capital intensive projects
and in some cases very much right now. They are
not compelling from a cost standpoint in that they don't
pay for themselves. So we are certainly looking in an
industry that needs to be experiencing pretty dramatic cost declines
to have much wider deployment in the future without policy support.
(11:01):
Outside of China, though, where a lot of the support
for clean tech is often coming from the companies themselves
and they're looking for independent backing. You know, what is
the real driving force for long duration energy storage? Is
it actually policy in Europe or North America or is
it really coming from private industry and investors.
Speaker 2 (11:21):
I think there are two types of revenue resource or
investment resources for launduration storage currently, so partially they come
from the government, So the Department of Energy of the
US is actually selecting a few technologies and provide funding
for those technologies to establish their demonstration projects. And on
the other hand, I think a lot of high profile
(11:42):
companies are receiving a lot of fundings from PBC firms.
We are interesting in developing the next twenty four to
seven clean firm technologies which can enable the future Nazero transition.
So actually we're seeing a surge of investment in laundering
storage since the past three years.
Speaker 1 (11:58):
One of the things that Clerk Curry, who a lot
of the work that we have on the innovation side
of things, she pointed out that actually a quarter of
VC financing at this point in time is actually going
into clean technologies, and so this very much echoes the
fact that a lot of vcs have their strategy to
see some of these technologies where there is so much need,
hoping that in the future they will actually end up
(12:19):
getting much bigger and growing at scale.
Speaker 2 (12:22):
And I think in addition, there are some corporate firms,
technology firms, big technology firms in US are highly interesting
in those technologies is one way to enable your twenty
four seven energies supply for their data centers such as Microsoft,
such as Google, all of those are actually looking to
developing those new technologies at their data center as well.
Speaker 1 (12:43):
So companies that are actually really interested in decarbonizing are
leading the way and actually driving technology deployment.
Speaker 2 (12:50):
Yes, it's currently I think those corporate firms investing significantly
in those new technologies, and they appear to be the
frame runner of this technology sector.
Speaker 1 (13:01):
So at the beginning of the show, we talked about
how this really isn't a cohesive space, lots of different
definitions regarding what constitutes longeration energy storage to begin with,
and this is emerging tech. Well, there are some incumbent
technologies and we'll get to that because some of those
are becoming popular again. But in this world of emerging tech,
and we can continue to use China as the framework
(13:21):
to discuss this to begin with, But which technologies are
most cost competitive in China and perhaps some of the
ones that maybe are more cost competitive in other parts
of the world. Let's pick a couple sample technologies and
talk about them, and also talk about kind of the
mechanics we'll get into some of the mechanics of how
they work, because I think it would be nice for
us to have some sort of picture in our mind
(13:43):
of what some of this technology actually looks like in
the amount of space it takes up. So when we
first start thinking about this, I mean one of the
ones that I'm aware of is compressed gas. Can you
talk a little bit about compressed gas as a technology.
Speaker 2 (13:56):
So in general of China is cheap of foremost relatively
too launche usion storage technologies, including compressed there and in
the flow batteries, which has been deployed since ninety seventies.
So it has been a long history of those technologies
and this is the major focus of China's currently. So
I would say most of those technology relatively material. Launduction
storage technologies are cheaper in China, are way more cost
(14:18):
competitive in China compared to the rest of awards. But
there are more laundrotion storage technology that are being developed
outside of China. Infecting our costs survey, we have received
cost data for over twenty different laundation storage technologies globally
and twenty yeah twenty, So most of those technologies that
developed outside of China including technologies that compressed gas or
(14:39):
other technologies which are just the emergent and their adoption
of those technologies in China are quite limited to date.
Speaker 1 (14:46):
And what is the split between technologies that existed from
a while ago, so the nineteen seventies, like pumped hydro
or compressed gas versus new and like really properly new
technology that's emerged in let's say the last five to
ten years.
Speaker 2 (14:58):
Yeah, I think among all a different launchrution stores technologists
compressed the guests and uncompressed area and the flow batteries
are too, Matio technologists. Other technologists are just emerging in
most of them are as piloting phase or on the face.
Speaker 1 (15:12):
So many of them are actually in this piloting phase
of that twenty. Yes, I suppose there's something to be
said for with the older existing technologies, they've had some
time to ramp up, and then that would be the
reason that we're actually looking for some additional solutions that
can be used in a way that perhaps the existing
technologies can't. Okay, So Evelina, I did ask for some
(15:32):
sort of technical picture in my mind of a technology,
and there's one in particular that I would like to
know more about because I think the title of it
actually is really compelling. It's called supercritical CO two energy storage.
What is it and what does it look like?
Speaker 3 (15:49):
Yeah, well maybe we need to go back to physics class,
and please no, So if we go back to our
physics class, the phase of materials depends on pressure and temperature,
and basically, with supercritical CO two, it's a fluid state
of carbon dioxide where it's held above its critical temperature
(16:10):
and critical pressure. So if you, for example, lower the pressure,
it becomes a gas, or if you lower the temperature,
it becomes a liquid. So the phase of material depends
ultimately on pressure and temperature, and for supercritical carbon dioxide
CO two, it's just a state where that material, or
that a substance, it's held at a temperature and pressure
(16:32):
above that critical point where distinct liquid and gas phases
do not exist.
Speaker 1 (16:38):
So when I started working in this industry, renewables were
ninety percent hydro power, and as such, as someone who
perhaps wasn't very creative when approaching their master's thesis, I
decided to write my master's thesis about hydropower. So invariably
I have a personal interest in this, but additionally we
have a lot of aging infrastructure in that space, and
(16:58):
it has historically served as a source of kind of
a great source of flexibility and energy storage. And as
we are trying to increase the amount of renewables on
the grid and we are looking to new and old technologies,
I want to know a little bit about what potential
pump tydro has in the future of the storage space
and whether or not it will be a comeback story.
Speaker 2 (17:21):
So I think palm tydro is indeed a very well
established technology and the destorage industry, and in fact, palm
hydro is the dominant technology besides lisima batdteries today. But
as we all know that developing pump tido could be
quite challenging both from the I think capital requirement perspective
and also the environmental impact perspective. In the addition, it
(17:42):
requires a very long time to get those projects developed.
But as we are seeing higher renewbal penetration growthing, there's
some renewed interest in palm taijo in markets such as China,
such as India, such as Europe such as Australia and others.
So there's indeed a comeback story of pump tijo but
there are some challenges associated with developing those green field
(18:05):
projects globally. To date, most of those activities actually in China.
Speaker 1 (18:09):
Again, so there's the new projects, but then there's the
aging infrastructure. Is that something that people are looking at
in close detail and when we're then repairing and retrofitting
existing pump hydro projects, is there new technology within that
like best available technology that's moving in or is that
space not really changed a lot in the last several decades.
Speaker 2 (18:27):
In fact, we are seeing some new pump tido technologies
or we called novel pump tydo technologies, so we have
actually collected some cost data for those projects as well.
So one of the I think high profile technology is
called high density pump tijo. So instead of using water
as a storage medium, this type of new technology used
flud with higher density than water, so this allows a
(18:49):
lower elevation and smaller footprints required to deliver a similar
amount of energy compared to those conventional ones. However, most
of those novel pump ygo technologists, as you, very early
stage of developments and most of those technology will be
developed by twenty thirty, so it's not a neutron story.
Speaker 1 (19:07):
So let's jump in on another technology that is of
interest at the moment, So gravity energy storage. I like
the name of this one too, just because it has
gravity in the name. Talk to me about gravity energy storage.
What is it and kind of what is the potential?
Speaker 3 (19:21):
Well. Gravity energy storage is another technology that is gaining
a lot of attention in use and media, primarily also
because it's very different from a lot of the electrochemical
solutions that were used to and seen in the past.
The way it works is by using energy to raise mass,
storing energy and potential energy by maintaining it elevated, and
(19:44):
then dropping it and releasing that energy when they want
to release the energy back to the grid. So it
basically uses electricity or energy to lift these masses when
prices are low, and then lower it when prices are
are high or where energy is needed to discharge it
in the grid. There are many advantages to gravity energy storage,
(20:06):
but also quite a lot of drawbacks. One of the
advantages is that the design is relatively simple. It's mechanical,
so it also has a long lifetime. These systems tend
to have a long lifetime because their life depends on
the lifetime of mechanical components. Which are generally pretty advanced.
They don't degrade, and we were quite familiar with it
because they're also used in other industries. However, drawbacks include
(20:30):
low round trip efficiency and very significant physical footprints, so
you needed a lot of space for such systems, so
it makes citing them and finding appropriate locations for them
quite difficult.
Speaker 1 (20:42):
So another issue with land use. But what does low
round trip efficiency mean?
Speaker 3 (20:46):
Basically means that you need to put more energy into
charging it and you get less energy out of it,
so you have a lot of energy losses while charging
and discharging.
Speaker 1 (20:56):
Yeah, it's for fear of stating the obvious batteries in
many respects and well hydrogen actually being one of those
things where there are use cases for it, but it
takes energy to make energy is energy storage invariably, there's
so much that we have to put into it in
order for it to be effective. And then it's that
ratio right on what it is that you actually get
out of it when you need it and for how long.
So nothing is a perfect solution. Everything fits to a
(21:20):
specific use case and in this case enabling renewables. So
I want to circle back on cost because cost is
an important part of deployment of any technology. And if
we think about China where they are actively supporting long
duration energy storage co located with renewables, and you're seeing
this roll out happening, what kind of percentage or even
(21:42):
in absolute terms, what are we seeing in terms of
cost for this overall project. Is it a really big
financial part of it or is it something that's sort
of a no brainer and it's pretty obvious that you
would want to include it because building over capacity is
going to be so much more expensive.
Speaker 2 (21:58):
I think it's how to get and some projects, but
I think in general it would be most of the
developers in channel will struggle to collect sufficient revenue streams
for laundursion storage to cover your initial costs. So most
of those projects are not actually economically stupn or not
economically viable in China.
Speaker 1 (22:18):
Over a long period of time, Like the payback on
the capital expenditure will not come back on this specific
part of it.
Speaker 2 (22:24):
It's hard to say for now because most of those
Laundusian storage startups or companies that claim me very ambitious
cost reduction targets. It's applicable to anyone in the industry,
but I think it's remains to be seen how cost
effectively der technology can ultimately become and.
Speaker 3 (22:42):
If I can add something. There may be two ways
to think of costs. The way that we looked at
it for this work that we put out was in
terms of capital costs, but another way to look at
it is in terms of level life's cost of electricity.
So what we focus on this report is capital costs,
so basically the cost of a fully installed system. That's
the first step into making analysis. That's a major input
(23:03):
into levelized costs of electricity, which we're going to be
doing as well for these technologies, so we'lltch out for that.
But generally, while levelized costs of electricity might make some
of these technologies look more cost competitive, many investors might
hesitate to use it as a metric because the lifetimes
of these projects are very, very long, and we're talking
(23:23):
about long payback periods. So capital cost remains a very
important metric. But it's important to mention that they're both
and different companies and different agencies might be using both,
and they're both helpful in making decisions and evaluating these technologies.
Speaker 1 (23:38):
So, because this is certainly an emerging technology space, if
we look away from the established technologies that have a
new life potentially in front of them, and we look
at some of the more emerging technologies. You have choices
to make regarding your time. I used to ask this
question actually quite frequently on the show. So I'm going
to bring back a favorite question type of mind, which
is use the export. What are you watching and what
(23:59):
are you ignoring? At least for right now. You can
always change your mind next time you come on the show.
Are you watching or ignoring sodium sulfur batteries?
Speaker 3 (24:08):
Yes, it's definitely one of the technologies that we're looking at.
And a good way maybe to frame it is that
we keep an eye on all of these long duration
and restorage technologies, and there are many that maybe we
didn't have the chance to talk about today. These include
sodium sulfur like you mentioned, and because they make a
smaller share in terms of deployments, maybe they're not the
center focus of attention. So I wouldn't want to count
(24:30):
any of them out, or just maybe paying less attention
and focusing on the metric of deployment in terms of
how we would split our time.
Speaker 1 (24:38):
So you're not ignoring them, but they don't get their
own research note, yet it's the right way to put it.
Speaker 3 (24:41):
Not yet. Okay, we look forward and we're excited to
see new technologies gaining traction so that we can write
reports about all of them.
Speaker 1 (24:49):
So how about liquid metal batteries another name that I
just love. This is the show of favorite names for
me for some reason. But liquid metal batteries, you know,
how close are they to getting their own research note?
Speaker 3 (25:00):
Again, they're probably in that category that they can't get
their own research note yet. If we're to define them,
they operate using liquid electrolytes, with a defining characteristic being
a molten salt electrolyte. But again, maybe they don't have
a note on them yet.
Speaker 1 (25:13):
And then another one that is an emerging technology. Tell
me a little bit about sodium iron chloride batteries.
Speaker 3 (25:20):
So it's another type of high temperature rechargeable battery. Again
it's grouped in one of these other technologies that we
didn't have enough data points to get their own section.
But another technology that we look out for.
Speaker 1 (25:34):
Not enough data points then means the world is not
yet putting it all together. That we may see as
more projects come to light and ability to analyze it further.
I want to know on this spectrum of how long
that energy can be stored for which one has the
longest duration energy storage? And then within this definition of
just you know China, in some cases saying only four
(25:55):
hours is necessary to be classified as long duration energy storage,
what is the least long duration and what is the
most long duration technology?
Speaker 3 (26:03):
Yeah, maybe we can give some context in terms of
the data points that we're received to give you a
sense of where we see the most need in terms
of durations. So about forty percent of the data points
that we collected were actually four dishort durations of one
to four hours, and then forty two percent was for
a dishort duration between five and ten hours. So we
(26:24):
have a majority of the data representing technologies and projects
that are between one and ten hours. This means that
the industry is still moving and around that duration phase
just because one many of them are early stage, so
it makes more sense to do a smaller project for
a shorter duration to prove it as a concept. And
(26:45):
another key reason that we're seeing shorter durations is because
that's the need we're currently seeing. So as Ye previously mentioned,
there's not a lot of policy supporting long duration in
many markets beyond these that we're seeing that I previously mentioned,
and there's not a way that these storing energy for
(27:06):
long durations is compensated in energy systems such as in
the US. That's one of the reasons that we're seeing
a shorter duration. And within each of these durations, there
are different technologies that might be competing. For example, thermal
energy storage typically makes sense for higher durations, so you
might see more thermo energy storage projects for higher durations.
Speaker 1 (27:26):
What's the maximum number of hours a thermal energy storage
project could do.
Speaker 3 (27:30):
So it really varies. We can see durations up to
twenty four hours, so from the data point that we collected,
in addition to costs, we ask people about different performance
metrics including duration and thermal energy storage could really vary
between two to four hours up to twenty.
Speaker 1 (27:47):
Four So some of these technologies, if I really put
it simply, are being used as speakers. Meanwhile, others are
actually being used for let's say, night time energy for
solar or for changes to weather patterns. When we're thinking
about other parts the renewables as opposed to being plugged
in for peak demand. Yes, but both use cases are
valid within this launderation.
Speaker 3 (28:08):
Energy storage.
Speaker 2 (28:09):
It highly depends, so we are seeing companies developing for
hours up to one hundred hours more launderation storage, so.
Speaker 1 (28:15):
What can do one hundred hours.
Speaker 2 (28:17):
Some companies, I think one of the I think most
high profile companies called form Energy, which is a startup
in the US, is actually developing the iron air technology
that can serve duration over one hundred hours. And I
think one of the major use case of those technologies
are actually pelling with renewable projects to turn the renewables
into the round the clock electricity supply and they can
(28:39):
display the core and gas pop plants, and also they
can also defer the great investments in some markets or
some region. Actually, we're seeing quite some projects that are
being developed by this company in the US. Actually, some
utilities are very interesting in such kind of technologies as
one of the I think promising options to displace those
Asian core and the guess power plants. So this is
(29:01):
one of the I think major use case we are
seeing for those and new storage. But oftentimes we are
seeing a lot lot of intro day and new storage,
so duration with six up to twelve hours, so they're
actually paired with solar assets to generate elegacy during the
evening peak and also over the nighttime, So this is
another dominating usage of I think lun duration storage use
(29:23):
case currently we are seeing.
Speaker 1 (29:25):
I mean, I know you've both said that the majority
of the market is at these kind of single digit
to kind of low double digit numbers of hours, but
I find the one hundred hour use case to be
incredibly interesting and will be watching that so closely because
to your point, it's not about these technologies competing with
one another for market share. It's actually about how they
(29:46):
can displace existing legacy energy like gues so ye ye. Evelina,
thank you so much for joining today and talking about
this really rapidly evolving space with so much potential and
necessity for the rollout of renewables deployment.
Speaker 2 (30:02):
Thank you Dana for having us.
Speaker 3 (30:04):
Thank you, Dania.
Speaker 1 (30:13):
Today's episode of Switched On was produced by Cam Gray
with production assistance from Kamala Shelling. Bloomberg NIF is a
service provided by Bloomberg Finance LP and its affiliates. This
recording does not constitute, nor should it be construed as
investment advice, investment recommendations, or a recommendation as to an
investment or other strategy. Bloomberg ANIF should not be considered
(30:34):
as information sufficient upon which to base an investment decision.
Neither Bloomberg Finance LP nor any of its affiliates makes
any representation or warranty as to the accuracy or completeness
of the information contained in this recording, and any liability
as a result of this recording is expressly disclaimed
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