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State and federal governments are being urged to ramp up deployment of long duration energy storage (LDES) after a new report found significant capacity additions would result in 38% lower system cost than alternatives while playing a critical role in maintaining reliability as coal plants retire over the next decade.
The report by Endgame Economics, completed for a group of LDES developers including Hydrostor, says a portfolio of storage across different durations is essential to provide resilience, system benefits and lower cost compared to portfolios composed of only shorter-duration storages.
Related article: Transgrid taps Hydrostor for backup power in Broken Hill
Endgame Economics calculated the Long-Run Marginal Cost (LRMC) across four different scenarios from 2035-40, finding that a mixed portfolio of storage options was 38% cheaper than alternatives, at $90/MWh compared to $145/MWh for a system reliant on 2-hour storage.
The report comes as policymakers and industry continue to grapple with how to maintain reliability and keep costs down as coal plants retire, pointing to a clear need for long duration storage that can deliver electricity to the grid for 8+ hours.
While short (2-hour) and medium (4-hour) storage is being rapidly built across Australia, uptake of long duration storage has been slower as policy support and market incentives have been limited. With clear mechanisms in place helping to attract short duration storage projects, developers are urging policymakers to shift their attention to long duration storage.
Hydrostor senior vice-president origination and development (Australia) Martin Becker said,
“Policymakers across the country have done an excellent job of attracting intermittent renewables and short duration storage projects into our energy system, making Australia a world leader in solar and lithium battery storage.
“Now, focus needs to shift to the next frontier of the energy transition; long duration storage. This report demonstrates the clear need for long duration storage to keep costs down for households and businesses.
“Coal-fired power stations still account for a significant proportion of our energy generation, and they do most of the heavy-lifting overnight. Long duration storage offers an emission-free, like-for-like replacement that can play the same role at far lower cost than lithium BESS.
Related article: NSW at risk of ‘diluting’ long-duration energy storage plan
“Without investing in these types of projects today, there will be limited availability of deeper and cheaper storage to deliver reliable, affordable energy post-2030.”
Hydrostor has struck a deal with Transgrid through its Australian subsidiary A-CAES that will see the 200MW/1600MWh Silver City Energy Storage Project provide back-up power to Broken Hill in New South Wales as early as 2027.
