An examination of island grid applications demonstrating the financial viability of LDES in areas with limited interconnectivity and high local fuel costs. The combination of solar, wind, and LDES emerges as the most cost-effective solution for achieving 100% renewable energy.
Combining solar energy with long duration energy storage paves the road to decarbonized industrialization for the world’s fastest growing economies. Nowhere is the dramatic potential of solar plus storage clearer than in the opportunity to decarbonize island grids and industrial applications in line with the 2050 targets for a fully fossil-fuel free energy system. However, the near-term financial viability of long duration energy storage (LDES) for integrated utilities on isolated power systems with limited interconnectivity depends on local fuel costs and renewable energy potential.
Islands around the world are struggling to reduce their dependence on coal and fuel-oil-generated power. The electricity cost for consumers on these islands are among the highest in the world. And at the same time, there is considerable potential for low-cost renewable energy generation. These conditions have already led some nations to build out solar and wind capacity, increasing the share of renewable energy in the generation mix. With the growing decarbonization of the island power systems, thermal generation will be decommissioned and stability services reduced.
To achieve full power decarbonization on such an island, the incumbent integrated utility could install a hybrid of additional solar and wind with Li-ion batteries and long duration energy storage. Detailed modeling of an isolated island system indicates that the lowest cost pathway to 100 percent fulfillment of energy demand by renewable energy employs a combination of Li-ion and LDES. The levelized cost of energy (LCOE) of this configuration is 15 percent lower than a pure Li-ion battery system—caused by the significant renewable energy overbuild—and 5 percent lower than a pure LDES system. This sort of renewable energy, lithium ion battery, and long duration energy storage system is already economic for islands around the world.
The role of long duration energy storage
Storage is maturing very quickly, and benefits are already being realized. In most jurisdictions today, the primary focus has been on traditional battery energy storage systems. These two-to-four-hour batteries are appropriate for providing grid balancing to smooth out the minute-to-minute and hour-to-hour variations of renewable energy.
Globally, solar currently only provides 4.5% of the world’s electricity mix, so short duration storage is sufficient to integrate solar and provide peaking support in most jurisdictions. Research from the International Solar Association indicates that solar and storage is already the cheapest source of supply for over 350 million consumers worldwide who currently lack energy access.
However, meeting 100% of global electricity demand at an affordable rate with solar – and other renewables – requires long duration energy storage to provide reliable power every hour of every day. This is particularly true in high-latitude countries where solar production can vary substantially not just from day-to-day but from season-to-season.
LDES can store energy in various forms, including mechanical, thermal, electrochemical, or chemical and can contribute significantly to the cost-efficient decarbonization of the energy system. Furthermore, it helps address major energy transition challenges such as solar and wind energy supply variability, grid infrastructure bottlenecks, or emissions from heat generation.
Research from the LDES Council estimates long duration energy storage (LDES) will be a USD $3.6 trillion industry with an installed capacity potential of 4-6TW by 2030. Its development will yield additional savings of up to $540 billion.
We cannot reach these goals without significant LDES deployment starting today and throughout the next decade. LDES must be scaled up dramatically and costs need to decrease by 60% over the next 20 years to build a cost-optimal net-zero energy system. Even greater cost reductions have occurred in other clean technologies like solar and wind.
LDES is an essential technology to enable renewable energy to power our grids, provide clean heat, and accelerate carbon neutrality. It enables surplus energy to be stored from wind, solar and other clean sources to be available when needed, and savings gained from minimizing curtailment. With LDES, we can transition towards renewable energy in an affordable, reliable, and sustainable way.
Wind, solar and other renewables have already become the lowest cost forms of generation but need long duration energy storage to match supply with demand. These storage technologies can de-risk the transition to renewable energy. The ISA and LDES Council are leading market changes in this pivotal moment as we move from energy systems supported by renewables to energy systems reliant on renewables.
Storage, particularly long duration energy storage, will be vital in enabling this future and creating flexible energy systems. Providing energy shifting services to ensure solar is available 24/7 is critical and the diverse LDES technologies can fill in the gaps.
LDES must be scaled at pace to capitalise on the significant progress to date, and utilise the growing levels of solar that will be installed in the coming decades. The amount of solar power capacity needed globally is at least 630 GW/year and as high as 1900 GW/year by 2030. All communities will need some solar – whether in homes, on roofs, in fields, on waterways, or on large-scale utility deployments if we are all truly going to end our reliance on fossil fuels.
LDES offers a low-cost flexibility solution to enable energy system decarbonization. LDES can be deployed to store energy for prolonged periods and can be scaled up economically to sustain energy provision for multiple hours (ten or more), days (multi-day storage), months, and seasons.
The demand for LDES coupled with renewable energy is only growing, and its central role as the best solution to the problem of how to fully decarbonize island economies is becoming clearer. There are a number of policy steps that governments can take to ensure that these pathways to a fossil fuel free future are unobstructed. To that end, we urge island nations to take the next step and draft appropriate legislation and policy that can make the promise of a net zero future a reality.
Article written by: Julia Souder, CEO, LDES Council & Dr. Ajay Mathur, Director General, International Solar Alliance