This week, the Department of Energy (DOE) announced the Long Duration Storage Shot, the latest under the organization’s umbrella of Energy Earthshot Initiatives. Long Duration Storage Shot aims to accelerate technology and commercialization to to reduce the cost of grid-scale energy storage that can deliver 10+ hours of duration by 90%. At its core, this program recognizes that greater penetrations of variable renewable energy will require increasing durations of storage to balance load and supply, and that through scale, significant cost reductions can be achieved.

The long duration energy storage market today

Today, the vast majority of grid-scale energy storage installed in the US can be classified as long duration energy storage (LDES). So why would LDES need support from the Long Duration Storage Shot to deploy at scale throughout the country?

Currently, most long duration energy storage comes from one technology type: pumped hydro storage (PHS), which accounts for over 90% of the installed storage capacity in the nation. PHS is a crucial LDES resource, which requires specific geographic conditions to be successful (large canyons with reservoirs of water, abundant water supply). With the growing need for LDES in diverse geographies nationwide, there is a demand and opportunity for a variety of storage technologies that can be easily sited and deployed anywhere that the grid requires support.

The Long Duration Storage Shot addresses this by considering all types of technologies for development of a diverse national portfolio – whether electrochemical, mechanical, thermal, chemical carriers, or any combination that has the potential to meet the necessary duration and cost targets for grid flexibility. This momentous opportunity highlights the key role energy storage will play in our nation’s path to a carbon-free future.

California: A step ahead in the LDES market

As a global leader in the energy transition, California has already taken substantial steps to develop and diversify its storage portfolio. California is home to over 3 GW of PHS, a figure that includes Los Angeles Department of Water and Power’s (LADWP) Castaic Power Plant. These resources, paired with the growing deployment of battery energy storage, have propelled California to the leading position on storage capacity within the US. By 2020, California counted 4.2 GW of energy storage capacity in total, according to the DOE’s Global Energy Storage Database. For reference, the other leading energy storage states, New York, Hawaii, and Texas, collectively have 1.98 GW of storage.

California leads in long duration energy storage according to a variety of other indicators:

• At the transmission level, the California Independent System Operator (CAISO) estimates that over 1.4 GW of incremental battery storage will be operational by September 2021, relative to June 2020.

• California Community Choice Aggregators (CCAs) led a first-ever RFP solicitation in 2020 for 500 MW of 8-hour energy storage, set to be online by 2026.

• Finally, as a result of CESA’s advocacy, the California Public Utilities Commission recently set a historic procurement target for 1 GW LDES by 2026 – the largest procurement directive of its kind to date in the United States.

But the work is far from over. Given recent planning models, the state will need 92.5 GW of additional solar PV and wind generation and significantly more energy storage to reach 100% decarbonized electric sales by 2045.

CESA’s data-backed advocacy is achieving LDES momentum in California

As the definitive voice of storage in California, CESA plays a leading role by modeling and determining how much storage the State will need to achieve its ambitious climate goals and evaluating the optimal operational characteristics of that storage portfolio.

In 2020, CESA partnered with Strategen Consulting to conduct analysis on the future need for LDES given California’s ambitious climate goals and resource mix. This study, Long Duration Energy Storage for California’s Clean, Reliable Grid (2020), leveraged first-class capacity expansion modeling capable of identifying the value of inter-day energy shifting. The study concludes that California will need between 45 and 55 GW of LDES by 2045 to achieve its decarbonization goals while retaining reliability.

CESA effectively leveraged these findings in its regulatory activities, contributing significantly to the successful and historic CPUC procurement directive and CCA RFPs mentioned above. California’s first-mover approach is already having an accelerating effect on the development of these resources throughout the nation. In Texas, CPS Energy has commenced procurement for 500 MW of firming capacity, seeking storage with durations of 4, 6, and over 12 hours. In Virginia, Dominion Energy initiated a request for proposals (RFP) seeking up to 100 MW of storage with 4- and 10-hour durations. These economies of scale will contribute significantly to the DOE’s effort to bring down the costs of LDES.

Additionally, CESA’s advocacy efforts are setting out a roadmap of best practices that will help guide market development in other states. These contributions include:

• Advocating for better capacity counting methodologies

• Providing technical input at the energy commission and public utilities commission on how to model emerging technologies

• Advocating for expedited approvals of LDES projects with de minimis environmental impacts to ensure reliability

• Promoting durable compliance frameworks that work within a decarbonized future

Thanks to the diligent work of state regulators, advocacy groups, and the storage industry, California is already ahead on the curve of LDES, and it is well-positioned to contribute to these federal targets. CESA celebrates the DOE’s investment in LDES, showing the nation that energy storage is an essential component of our collective decarbonized energy future.