Thermal Storage Can Expand Long-Duration Energy Storage to 8 TW by 2040
Thermal Energy Storage could help save $540 billion annually in system costs
Thermal energy storage (TES), as a form of long-duration energy storage (LDES), can help decarbonize roughly 45% of all energy-related emissions by ensuring that industrial operations requiring heat are optimized affordably, said a report by Long Duration Energy Storage Council and McKinsey.
Heat storage technologies can offer a variety of storage durations (from intraday to seasonal) and temperatures (from subzero to 2,400°C) and integrate intermittent renewable energy into a firm supply of heat energy.
For instance, TES can firm the variable offshore wind supply into a more stable supply of clean heat for industrial heating, including high-temperature heating. This can completely change the energy-usage pattern of a typical industrial hub.
Further, the report said, “According to the 2022 LDES benchmark results, TES enables cost-efficient electrification and decarbonization of the most widely used heat applications, namely steam and hot air,” the report said
TES can help double the overall installed capacity of LDES to 2 TW-8 TW by 2040. While this will require capital expenditure of $1.6 trillion-$2.5 trillion, it could lead to savings on system costs by up to $540 billion per year.
The findings establish the need for thermal storage to be part of an integrated energy system that includes electrical and molecular storage to accelerate a decarbonized energy system further.
“More LDES enables an accelerated build-out of renewables and greater optimization of grid utilization. When thermal energy storage is part of the mix of diverse LDES technologies, then the results are clear – long-duration energy storage continues to be a cost-effective, reliable, sustainable, and secure component of our net-zero future,” LDES Council Executive Director Julia Souder said.
LDES costs are declining
The report said that TES solutions have an internal rate of return of 6% to 28% for chemical plants, 22% for off-grid greenhouses, up to 16% for district heating peaker plants, and 16% for alumina refineries.
It is predicted that LDES costs will decline in the following years, suggesting a 25% to 50% overall capital expenditure (CAPEX) reduction of power LDES technologies by 2040. TES capital expenditure is expected to decline by 5% to 30% for power CAPEX and 15% to 70% for energy storage CAPEX.
Incorporating various storage technologies creates an opportunity to optimize the current utilization and future development of fixed infrastructure assets.
The reports suggest that LDES can enable more efficient grid utilization through supply-and-demand management and storage as a transmission asset, thereby reducing costs related to such expansions. This could prove especially beneficial over the next five to ten years, when the bulk of grids will need to be re-designed, given the typical ten-year development timeline of major grid expansions.
Better grid utilization may, in turn, allow the integration of more renewable generation capacity into the system.
The Biden government announced a $350 million fund for LDES demonstration projects. These storage projects will be built to deliver electricity for up to 10 to 24 hours or even longer to support a low-cost, reliable, and carbon-free electric grid.
Earlier in August, it had launched two new program offices – the Grid Deployment Office and the Office of State and Community Energy Programs – to drive more than $23 billion in investments to expand the power grid capacity and deploy cheaper, cheaper, cleaner energy.