What is LDES? Its Importance in Climate

LDES has become a hotbed for innovation, attracting over $1.7B in funding in 2023 alone. Short for Long-Duration-Energy-Storage, LDES fills the gap where other energy storage technologies falls short, allowing energy to be stored for days or even months. As we shift from fossil fuels to renewables, LDES is critical to stabilize the grid and ensure a steady energy supply. For those late to the party, this article gives an overview of LDES and why it has become a focal point for investors. Let’s break it down.

How LDES Works

Renewable energy sources are intermittent by nature. Solar power, for example, requires daylight, and wind power depends on favorable weather conditions to generate energy. This creates a significant challenge for the grid, which requires a steady supply to meet constant demand. LDES helps to solve this by storing energy during peak generation and releasing it during periods of low.

We break LDES technologies into four core categories:

1. Thermal Energy Storage uses mediums like hot rocks and molten salts to store energy as heat which can be converted into electricity later. Irish startup Sunamp, for example, replaces hot water tanks with thermal batteries, storing up to four times more energy while taking up a fraction of the space.
2. Mechanical Storage includes technologies like pumped hydro storage and compressed air energy storage (CAES). These methods store energy by physically moving or compressing materials, and then releasing it when needed by reversing the process.
3. Chemical Storage involves storing energy in chemical compounds, such as hydrogen, which can be converted into electricity via fuel cells. Corre Energy takes the lead here with Europe’s largest hydrogen storage facility.
4. Electrical Storage is advanced batteries like flow and metal-air, developed specifically for LDES. Volt Storage’s Iron Salt Battery makes renewable energy available around the clock by storing energy from wind or sun.

The Big Opportunities

The pressure on governments to meet the Net Zero targets has translated into substantial policy support for solutions like LDES. For investors, this means less risk and favorable market conditions with tax incentives making it easier to deploy LDES at scale. These three areas of opportunities are fuelling market growth: 

1. Grid Resilience: As more renewables come online, the demand for solutions stabilizing the grid is expected to skyrocket. LDES is uniquely positioned to address this need, particularly in regions with high renewable penetration like California and parts of Europe.
2. Industrial Applications: Industries like manufacturing, mining, and heavy-duty require a constant energy supply, which makes them prime candidates for LDES. This is expected to trigger demand, as corporates strive to reduce their carbon footprints.
3. Off-Grid and Remote Energy: In remote areas where the grid doesn’t reach, LDES can provide reliable, clean energy, reducing dependence on diesel generators and other fossil-fuel-based solutions.

Hurdles & Bottlenecks

While LDES holds the key to making renewable energy work at scale, getting there doesn’t come without challenges. The costs are still high, with solutions like CAES requiring high-pressure storage tanks, which aren’t cheap to produce. What else, the units take up large amounts of space, which further brings up the costs. 

Finding the sweet spot between high efficiency and steep capital costs remains hard. To justify the hefty initial investment, energy storage systems need to cycle frequently—often every few hours. This impacts the economic viability, making it tricky to make them stand the test of time. The shift to decentralized grids adds another layer of complexity, making it harder to control the flow of electricity. For LDES technologies to be effective, they need to adapt to this new grid landscape and work seamlessly with decentralized assets.

To learn more about LDES, ask our team about the full Market Research report on the Net0 Platform.