Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNAF podcast. Today's show is about long duration energy storage,
Speaker 1: a potential answer to the intermittency for renewable energy, given
Speaker 1: how fickle, whether it can be at times when you
Speaker 1: need it for solar or wind power. How close are
Speaker 1: we getting to that answer?
Speaker 2: Well?
Speaker 1: Today I am joined by analysts Yee Zoo, a clean
Speaker 1: power specialist at BNAF, alongside Evelina Stoiku, who's from our
Speaker 1: energy storage team. From electrochemical to thermal to mechanical. What
Speaker 1: are the long duration energy storage technologies that are out
Speaker 1: there and how mature are they? They draw upon notes
Speaker 1: from the inaugural Long Duration Energy Storage Cost Survey. This
Speaker 1: can be found at bn EF once logged into the
Speaker 1: Bloomberg terminal, or at BNAF dot com. But right now,
Speaker 1: let's jump into our conversation with Yee and Evelina about
Speaker 1: some of the possible opportunities for long duration energy storage. Evelina,
Speaker 1: thank you for joining today.
Speaker 3: Hi Dana, nice to be here, and Yee.
Speaker 1: Thank you for joining on the show.
Speaker 2: Thanks for having Austin.
Speaker 1: So we're going to talk about long duration energy storage
Speaker 1: and the first question has to be what do we
Speaker 1: mean by long What is the time frame that makes
Speaker 1: it long duration versus just energy storage.
Speaker 3: Well, that is a very good question, and the reality
Speaker 3: is that there's no consensus on the definition of long
Speaker 3: duration energy storage. BENIF defines it as a storage technology
Speaker 3: that can offer disurgeration of at least six hours. However,
Speaker 3: different sources define it in different ways. For example, the
Speaker 3: US Department of Energy classifies long drage and energy storage
Speaker 3: with duration of at least ten hours, while Chinese agencies
Speaker 3: define it as four. So it really varies.
Speaker 1: So the companies that are creating the technology for long
Speaker 1: duration energy storage would not then classify themselves as long
Speaker 1: duration energy storage providers necessarily because in many res they
Speaker 1: may just be making batteries at how different applicability and
Speaker 1: so is this is this an industry that I guess
Speaker 1: largely look at each other as competitors and as technologies
Speaker 1: that can be swapped out for each other or do
Speaker 1: they have quite different use cases?
Speaker 3: Well, they can have very different use cases. And again,
Speaker 3: because we're talking about technologies that can offer anywhere between
Speaker 3: six to twenty four to one hundred hours, they're really
Speaker 3: very different applications that are fit for for these durations.
Speaker 3: So many of these companies or technologies cannot be swapped
Speaker 3: out directly and their success might be dependent on different parameters.
Speaker 1: So we can talk about those different use cases as
Speaker 1: we get into the technologies. And I think then the
Speaker 1: question is, because there's no strict definition of what this
Speaker 1: industry is, you had to make some choices regarding which
Speaker 1: technologies you were going to look at, and you know
Speaker 1: what those use cases were. So which technologies did you
Speaker 1: decide to focus on and why did you pick them?
Speaker 3: Well, in our work we covered of our of different technologies. Specifically,
Speaker 3: we covered seven broad long duration energy storage technology groups
Speaker 3: and twenty technology types under each of these, but broadly
Speaker 3: you can think of lds based on major classifications such
Speaker 3: as electrochemical, mechanical, or thermal. Electrochemical storage technologies basically store
Speaker 3: energy through reversible chemical reactions. They're also typically referred to
Speaker 3: as batteries, and the most widely widely known type of
Speaker 3: battery that's electrochemicals lithium ion, but others include flow batteries.
Speaker 3: Now with mechanical energy is stored through utilizing the physical
Speaker 3: movement of materials to store and release energy, and examples
Speaker 3: of these technologies include compressed air and liquid air energy storage,
Speaker 3: gravity energy storage, compressed gas energy storage, and novel pumped
Speaker 3: hydro at last pog least with thermal we have energy
Speaker 3: stored through heat, so energy can be used for heating
Speaker 3: or cooling and power generation later. And there are multiple
Speaker 3: subcategories under thermal energy storage.
Speaker 1: So oftentimes when we end up talking about on the
Speaker 1: show or lithium ion batteries because invariably they're a source
Speaker 1: of storage for the energy system, but also very much
Speaker 1: in vehicles, which is another space that we cover. And
Speaker 1: you know, we've just gone through a series of different
Speaker 1: technologies that you looked at within these electrochemical, mechanical, and
Speaker 1: thermal categories. Of those three categories, or if you want
Speaker 1: to name a specific technology that works too, which ones
Speaker 1: are most cost competitive with lithium ion batteries.
Speaker 3: So when we're thinking about the cost competitiveness of long
Speaker 3: duration energy storage technologies against lithium ion, there are multiple
Speaker 3: ways to think about it. The costs really vary by
Speaker 3: dissart duration, and it also really varies by by region.
Speaker 3: While the typical storage duration for lithiumon batteries is two
Speaker 3: to four hours, long duration energy storage technologies tend to
Speaker 3: be more cost competitive over longer durations. So if we're
Speaker 3: to look at that specific duration of two to four hours,
Speaker 3: actually none of these long duration energy storage technologies is
Speaker 3: really competitive. However, one of the very unique characteristics of
Speaker 3: long duration energy storage is that the costs, specifically capital
Speaker 3: costs drop at higher durations. That happens because the energy
Speaker 3: and the power related components of these systems tend to
Speaker 3: be decoupled versus this is not the case for lifiumion.
Speaker 3: If we take an example of flow batteries, you can
Speaker 3: increase the dis sharg duration of a system by adding
Speaker 3: bigger tanks to store the liquid electrolyte versus in the
Speaker 3: case of liftumine batteries, you would need to add more
Speaker 3: battery cells. So for lds, this means that capital costs
Speaker 3: drop for higher durations and they become more cost competitive
Speaker 3: for these higher durations. The technologies that we've seen as
Speaker 3: the most cost competitive for these higher durations tend to
Speaker 3: be compressed air and thermal energy storage, and many of
Speaker 3: these others might become cost competitive for longer durations.
Speaker 1: Now in the storage market, specifically, the THEAMYA and you've
Speaker 1: seen China be a really dominant force in terms of
Speaker 1: really driving cost declines and producing its scale. And is
Speaker 1: China also involved in some of these other technologies and
Speaker 1: which ones are they most interested in?
Speaker 2: Yeah, well, China has been leading the Lisima batteries because
Speaker 2: of this massive adoption of lisa my batteries in both
Speaker 2: electrical vehicle industry and also stationary energy storage markets. For
Speaker 2: launderation storage, actually, China is also leading on that front
Speaker 2: as well. So the technology deployment in China for launderation
Speaker 2: storage is that generally cheaper compared to the rest of boards.
Speaker 2: This is especially true for technologies such as compressed aian
Speaker 2: gies storage and flow batteries, which China has considered them
Speaker 2: as the major focus for now for the nature, so
Speaker 2: most of those technologies actually at least fifteen percent cheaper
Speaker 2: compared to those deployed in other markets. This is mainly
Speaker 2: due to the more advanced commercial status of those technology
Speaker 2: deployment in China compared to the rest of boards. So
Speaker 2: while other nations are still trying to understand the value
Speaker 2: of different launderation storages and also developing piloting projects, China
Speaker 2: is starting to deploy those massive projects. We're seeing some
Speaker 2: records setting large scale projects that has been developed in China.
Speaker 2: Some of those are with gig wle hours scaled well,
Speaker 2: but most of those projects deployed in the rest of
Speaker 2: WOARLD is actually less than five macworld or less than
Speaker 2: ten awards, so those are mainly those piloting projects. So
Speaker 2: this massive adoption of laundrosan storage deployed in China has
Speaker 2: been one of the major driver in driving down the
Speaker 2: course of laundrotion storage in China currently.
Speaker 1: And is it a fragmented market or are there a
Speaker 1: few suppliers that are actually really heavily involved in some
Speaker 1: of these specific technologies, because the parallel I think about
Speaker 1: is the gigafactories that have risen in the luthium ion space,
Speaker 1: and those are certainly very big projects focused on you know,
Speaker 1: specific companies that you're doing them. So how fragmented or
Speaker 1: consolidated is this market in China?
Speaker 2: So lntruition storage is you're an emergent technology, so there
Speaker 2: are some emergent companies entering into this market. For instance,
Speaker 2: for flow batteries, we are seeing over thirty energy storage
Speaker 2: system greater in this market, so this is quite a
Speaker 2: large number. And this number is continuously increasing over time
Speaker 2: as well. So I would say this is a quite
Speaker 2: fragmented market for now, but over time on when the
Speaker 2: market is mature, we're likely to see some consolidation or
Speaker 2: some markets some companies may need to acceed markets ultimately
Speaker 2: because of the fist competition and limited market size.
Speaker 1: And how supportive is the policy environment in China towards
Speaker 1: these technologies, because they've certainly been very supportive of lithiumyon
Speaker 1: and of solar. Is this very much in the government sites.
Speaker 2: As well, definitely, So the Chinese government has released multiple
Speaker 2: policies driving the adoption of laundrousian storage since twenty twenty two.
Speaker 2: So it has identified laundursion storage as one of the
Speaker 2: key abler for its energy in netz zero transition by
Speaker 2: twenty sixty. And also it has set its target to
Speaker 2: reach early stage commercialization of nondrousion storage by twenty twenty
Speaker 2: five and full commercialization by twenty thirty. So we are
Speaker 2: seeing a large number of I think utility scale companies
Speaker 2: and also great companies or provincial governments that's starting to
Speaker 2: enter into this market and start to build those large
Speaker 2: scale demonstration projects to get first move. And this has
Speaker 2: been one of the major driver dropping the adoption of
Speaker 2: laundrotion storage in China currently. In addition, China mandates a
Speaker 2: certain amount of energy storage to be paired with new
Speaker 2: build wind and solar projects, So this has been one
Speaker 2: of the major driver of energy storage adoption in China currently,
Speaker 2: and this applies to both short duration storage and laundurition storage.
Speaker 2: So this has been meaningful I think policy in driving
Speaker 2: the adoption of those laundroation storage in China.
Speaker 1: Yeah, we really robust domestic market because the renewables industry
Speaker 1: is taking off, so then this follows and complements it. Yeah,
Speaker 1: which then leads me to are there other countries that
Speaker 1: are also really keeping a close eye on this? And
Speaker 1: I'm thinking about perhaps the US. We have the Inflation
Speaker 1: Reduction Act that has put renewables on the map in
Speaker 1: the US. Has that then also created a market for
Speaker 1: long duration energy storage? And is there really anywhere in
Speaker 1: the world that's looking like China.
Speaker 3: At the moment?
Speaker 2: So I think in nan Chinese markets, there's a growing
Speaker 2: consensus in terms of the importance of laundrosians over time,
Speaker 2: So many countries are calling for need of launchurition storage
Speaker 2: as one of the key able for its energy transition
Speaker 2: over time. But I would say most of the policies
Speaker 2: support for from non Chinese markets are quite limited to date.
Speaker 2: One of the major reasons is that most of the
Speaker 2: projects in other markets are economic driven rather than policy driven.
Speaker 2: So we needs strong financial incentives to drive those adoptions
Speaker 2: of those projects in non Chinese markets. But I think
Speaker 2: the financial incentives are quite limited to date, which is
Speaker 2: not sufficient to drive the economic buildouts of laundrous storage
Speaker 2: to date.
Speaker 1: So you've already established that these are capital intensive projects
Speaker 1: and in some cases very much right now. They are
Speaker 1: not compelling from a cost standpoint in that they don't
Speaker 1: pay for themselves. So we are certainly looking in an
Speaker 1: industry that needs to be experiencing pretty dramatic cost declines
Speaker 1: to have much wider deployment in the future without policy support.
Speaker 1: Outside of China, though, where a lot of the support
Speaker 1: for clean tech is often coming from the companies themselves
Speaker 1: and they're looking for independent backing. You know, what is
Speaker 1: the real driving force for long duration energy storage? Is
Speaker 1: it actually policy in Europe or North America or is
Speaker 1: it really coming from private industry and investors.
Speaker 2: I think there are two types of revenue resource or
Speaker 2: investment resources for launduration storage currently, so partially they come
Speaker 2: from the government, So the Department of Energy of the
Speaker 2: US is actually selecting a few technologies and provide funding
Speaker 2: for those technologies to establish their demonstration projects. And on
Speaker 2: the other hand, I think a lot of high profile
Speaker 2: companies are receiving a lot of fundings from PBC firms.
Speaker 2: We are interesting in developing the next twenty four to
Speaker 2: seven clean firm technologies which can enable the future Nazero transition.
Speaker 2: So actually we're seeing a surge of investment in laundering
Speaker 2: storage since the past three years.
Speaker 1: One of the things that Clerk Curry, who a lot
Speaker 1: of the work that we have on the innovation side
Speaker 1: of things, she pointed out that actually a quarter of
Speaker 1: VC financing at this point in time is actually going
Speaker 1: into clean technologies, and so this very much echoes the
Speaker 1: fact that a lot of vcs have their strategy to
Speaker 1: see some of these technologies where there is so much need,
Speaker 1: hoping that in the future they will actually end up
Speaker 1: getting much bigger and growing at scale.
Speaker 2: And I think in addition, there are some corporate firms,
Speaker 2: technology firms, big technology firms in US are highly interesting
Speaker 2: in those technologies is one way to enable your twenty
Speaker 2: four seven energies supply for their data centers such as Microsoft,
Speaker 2: such as Google, all of those are actually looking to
Speaker 2: developing those new technologies at their data center as well.
Speaker 1: So companies that are actually really interested in decarbonizing are
Speaker 1: leading the way and actually driving technology deployment.
Speaker 2: Yes, it's currently I think those corporate firms investing significantly
Speaker 2: in those new technologies, and they appear to be the
Speaker 2: frame runner of this technology sector.
Speaker 1: So at the beginning of the show, we talked about
Speaker 1: how this really isn't a cohesive space, lots of different
Speaker 1: definitions regarding what constitutes longeration energy storage to begin with,
Speaker 1: and this is emerging tech. Well, there are some incumbent
Speaker 1: technologies and we'll get to that because some of those
Speaker 1: are becoming popular again. But in this world of emerging tech,
Speaker 1: and we can continue to use China as the framework
Speaker 1: to discuss this to begin with, But which technologies are
Speaker 1: most cost competitive in China and perhaps some of the
Speaker 1: ones that maybe are more cost competitive in other parts
Speaker 1: of the world. Let's pick a couple sample technologies and
Speaker 1: talk about them, and also talk about kind of the
Speaker 1: mechanics we'll get into some of the mechanics of how
Speaker 1: they work, because I think it would be nice for
Speaker 1: us to have some sort of picture in our mind
Speaker 1: of what some of this technology actually looks like in
Speaker 1: the amount of space it takes up. So when we
Speaker 1: first start thinking about this, I mean one of the
Speaker 1: ones that I'm aware of is compressed gas. Can you
Speaker 1: talk a little bit about compressed gas as a technology.
Speaker 2: So in general of China is cheap of foremost relatively
Speaker 2: too launche usion storage technologies, including compressed there and in
Speaker 2: the flow batteries, which has been deployed since ninety seventies.
Speaker 2: So it has been a long history of those technologies
Speaker 2: and this is the major focus of China's currently. So
Speaker 2: I would say most of those technology relatively material. Launduction
Speaker 2: storage technologies are cheaper in China, are way more cost
Speaker 2: competitive in China compared to the rest of awards. But
Speaker 2: there are more laundrotion storage technology that are being developed
Speaker 2: outside of China. Infecting our costs survey, we have received
Speaker 2: cost data for over twenty different laundation storage technologies globally
Speaker 2: and twenty yeah twenty, So most of those technologies that
Speaker 2: developed outside of China including technologies that compressed gas or
Speaker 2: other technologies which are just the emergent and their adoption
Speaker 2: of those technologies in China are quite limited to date.
Speaker 1: And what is the split between technologies that existed from
Speaker 1: a while ago, so the nineteen seventies, like pumped hydro
Speaker 1: or compressed gas versus new and like really properly new
Speaker 1: technology that's emerged in let's say the last five to
Speaker 1: ten years.
Speaker 2: Yeah, I think among all a different launchrution stores technologists
Speaker 2: compressed the guests and uncompressed area and the flow batteries
Speaker 2: are too, Matio technologists. Other technologists are just emerging in
Speaker 2: most of them are as piloting phase or on the face.
Speaker 1: So many of them are actually in this piloting phase
Speaker 1: of that twenty. Yes, I suppose there's something to be
Speaker 1: said for with the older existing technologies, they've had some
Speaker 1: time to ramp up, and then that would be the
Speaker 1: reason that we're actually looking for some additional solutions that
Speaker 1: can be used in a way that perhaps the existing
Speaker 1: technologies can't. Okay, So Evelina, I did ask for some
Speaker 1: sort of technical picture in my mind of a technology,
Speaker 1: and there's one in particular that I would like to
Speaker 1: know more about because I think the title of it
Speaker 1: actually is really compelling. It's called supercritical CO two energy storage.
Speaker 1: What is it and what does it look like?
Speaker 3: Yeah, well maybe we need to go back to physics class,
Speaker 3: and please no, So if we go back to our
Speaker 3: physics class, the phase of materials depends on pressure and temperature,
Speaker 3: and basically, with supercritical CO two, it's a fluid state
Speaker 3: of carbon dioxide where it's held above its critical temperature
Speaker 3: and critical pressure. So if you, for example, lower the pressure,
Speaker 3: it becomes a gas, or if you lower the temperature,
Speaker 3: it becomes a liquid. So the phase of material depends
Speaker 3: ultimately on pressure and temperature, and for supercritical carbon dioxide
Speaker 3: CO two, it's just a state where that material, or
Speaker 3: that a substance, it's held at a temperature and pressure
Speaker 3: above that critical point where distinct liquid and gas phases
Speaker 3: do not exist.
Speaker 1: So when I started working in this industry, renewables were
Speaker 1: ninety percent hydro power, and as such, as someone who
Speaker 1: perhaps wasn't very creative when approaching their master's thesis, I
Speaker 1: decided to write my master's thesis about hydropower. So invariably
Speaker 1: I have a personal interest in this, but additionally we
Speaker 1: have a lot of aging infrastructure in that space, and
Speaker 1: it has historically served as a source of kind of
Speaker 1: a great source of flexibility and energy storage. And as
Speaker 1: we are trying to increase the amount of renewables on
Speaker 1: the grid and we are looking to new and old technologies,
Speaker 1: I want to know a little bit about what potential
Speaker 1: pump tydro has in the future of the storage space
Speaker 1: and whether or not it will be a comeback story.
Speaker 2: So I think palm tydro is indeed a very well
Speaker 2: established technology and the destorage industry, and in fact, palm
Speaker 2: hydro is the dominant technology besides lisima batdteries today. But
Speaker 2: as we all know that developing pump tido could be
Speaker 2: quite challenging both from the I think capital requirement perspective
Speaker 2: and also the environmental impact perspective. In the addition, it
Speaker 2: requires a very long time to get those projects developed.
Speaker 2: But as we are seeing higher renewbal penetration growthing, there's
Speaker 2: some renewed interest in palm taijo in markets such as China,
Speaker 2: such as India, such as Europe such as Australia and others.
Speaker 2: So there's indeed a comeback story of pump tijo but
Speaker 2: there are some challenges associated with developing those green field
Speaker 2: projects globally. To date, most of those activities actually in China.
Speaker 1: Again, so there's the new projects, but then there's the
Speaker 1: aging infrastructure. Is that something that people are looking at
Speaker 1: in close detail and when we're then repairing and retrofitting
Speaker 1: existing pump hydro projects, is there new technology within that
Speaker 1: like best available technology that's moving in or is that
Speaker 1: space not really changed a lot in the last several decades.
Speaker 2: In fact, we are seeing some new pump tido technologies
Speaker 2: or we called novel pump tydo technologies, so we have
Speaker 2: actually collected some cost data for those projects as well.
Speaker 2: So one of the I think high profile technology is
Speaker 2: called high density pump tijo. So instead of using water
Speaker 2: as a storage medium, this type of new technology used
Speaker 2: flud with higher density than water, so this allows a
Speaker 2: lower elevation and smaller footprints required to deliver a similar
Speaker 2: amount of energy compared to those conventional ones. However, most
Speaker 2: of those novel pump ygo technologists, as you, very early
Speaker 2: stage of developments and most of those technology will be
Speaker 2: developed by twenty thirty, so it's not a neutron story.
Speaker 1: So let's jump in on another technology that is of
Speaker 1: interest at the moment, So gravity energy storage. I like
Speaker 1: the name of this one too, just because it has
Speaker 1: gravity in the name. Talk to me about gravity energy storage.
Speaker 1: What is it and kind of what is the potential?
Speaker 3: Well. Gravity energy storage is another technology that is gaining
Speaker 3: a lot of attention in use and media, primarily also
Speaker 3: because it's very different from a lot of the electrochemical
Speaker 3: solutions that were used to and seen in the past.
Speaker 3: The way it works is by using energy to raise mass,
Speaker 3: storing energy and potential energy by maintaining it elevated, and
Speaker 3: then dropping it and releasing that energy when they want
Speaker 3: to release the energy back to the grid. So it
Speaker 3: basically uses electricity or energy to lift these masses when
Speaker 3: prices are low, and then lower it when prices are
Speaker 3: are high or where energy is needed to discharge it
Speaker 3: in the grid. There are many advantages to gravity energy storage,
Speaker 3: but also quite a lot of drawbacks. One of the
Speaker 3: advantages is that the design is relatively simple. It's mechanical,
Speaker 3: so it also has a long lifetime. These systems tend
Speaker 3: to have a long lifetime because their life depends on
Speaker 3: the lifetime of mechanical components. Which are generally pretty advanced.
Speaker 3: They don't degrade, and we were quite familiar with it
Speaker 3: because they're also used in other industries. However, drawbacks include
Speaker 3: low round trip efficiency and very significant physical footprints, so
Speaker 3: you needed a lot of space for such systems, so
Speaker 3: it makes citing them and finding appropriate locations for them
Speaker 3: quite difficult.
Speaker 1: So another issue with land use. But what does low
Speaker 1: round trip efficiency mean?
Speaker 3: Basically means that you need to put more energy into
Speaker 3: charging it and you get less energy out of it,
Speaker 3: so you have a lot of energy losses while charging
Speaker 3: and discharging.
Speaker 1: Yeah, it's for fear of stating the obvious batteries in
Speaker 1: many respects and well hydrogen actually being one of those
Speaker 1: things where there are use cases for it, but it
Speaker 1: takes energy to make energy is energy storage invariably, there's
Speaker 1: so much that we have to put into it in
Speaker 1: order for it to be effective. And then it's that
Speaker 1: ratio right on what it is that you actually get
Speaker 1: out of it when you need it and for how long.
Speaker 1: So nothing is a perfect solution. Everything fits to a
Speaker 1: specific use case and in this case enabling renewables. So
Speaker 1: I want to circle back on cost because cost is
Speaker 1: an important part of deployment of any technology. And if
Speaker 1: we think about China where they are actively supporting long
Speaker 1: duration energy storage co located with renewables, and you're seeing
Speaker 1: this roll out happening, what kind of percentage or even
Speaker 1: in absolute terms, what are we seeing in terms of
Speaker 1: cost for this overall project. Is it a really big
Speaker 1: financial part of it or is it something that's sort
Speaker 1: of a no brainer and it's pretty obvious that you
Speaker 1: would want to include it because building over capacity is
Speaker 1: going to be so much more expensive.
Speaker 2: I think it's how to get and some projects, but
Speaker 2: I think in general it would be most of the
Speaker 2: developers in channel will struggle to collect sufficient revenue streams
Speaker 2: for laundursion storage to cover your initial costs. So most
Speaker 2: of those projects are not actually economically stupn or not
Speaker 2: economically viable in China.
Speaker 1: Over a long period of time, Like the payback on
Speaker 1: the capital expenditure will not come back on this specific
Speaker 1: part of it.
Speaker 2: It's hard to say for now because most of those
Speaker 2: Laundusian storage startups or companies that claim me very ambitious
Speaker 2: cost reduction targets. It's applicable to anyone in the industry,
Speaker 2: but I think it's remains to be seen how cost
Speaker 2: effectively der technology can ultimately become and.
Speaker 3: If I can add something. There may be two ways
Speaker 3: to think of costs. The way that we looked at
Speaker 3: it for this work that we put out was in
Speaker 3: terms of capital costs, but another way to look at
Speaker 3: it is in terms of level life's cost of electricity.
Speaker 3: So what we focus on this report is capital costs,
Speaker 3: so basically the cost of a fully installed system. That's
Speaker 3: the first step into making analysis. That's a major input
Speaker 3: into levelized costs of electricity, which we're going to be
Speaker 3: doing as well for these technologies, so we'lltch out for that.
Speaker 3: But generally, while levelized costs of electricity might make some
Speaker 3: of these technologies look more cost competitive, many investors might
Speaker 3: hesitate to use it as a metric because the lifetimes
Speaker 3: of these projects are very, very long, and we're talking
Speaker 3: about long payback periods. So capital cost remains a very
Speaker 3: important metric. But it's important to mention that they're both
Speaker 3: and different companies and different agencies might be using both,
Speaker 3: and they're both helpful in making decisions and evaluating these technologies.
Speaker 1: So, because this is certainly an emerging technology space, if
Speaker 1: we look away from the established technologies that have a
Speaker 1: new life potentially in front of them, and we look
Speaker 1: at some of the more emerging technologies. You have choices
Speaker 1: to make regarding your time. I used to ask this
Speaker 1: question actually quite frequently on the show. So I'm going
Speaker 1: to bring back a favorite question type of mind, which
Speaker 1: is use the export. What are you watching and what
Speaker 1: are you ignoring? At least for right now. You can
Speaker 1: always change your mind next time you come on the show.
Speaker 1: Are you watching or ignoring sodium sulfur batteries?
Speaker 3: Yes, it's definitely one of the technologies that we're looking at.
Speaker 3: And a good way maybe to frame it is that
Speaker 3: we keep an eye on all of these long duration
Speaker 3: and restorage technologies, and there are many that maybe we
Speaker 3: didn't have the chance to talk about today. These include
Speaker 3: sodium sulfur like you mentioned, and because they make a
Speaker 3: smaller share in terms of deployments, maybe they're not the
Speaker 3: center focus of attention. So I wouldn't want to count
Speaker 3: any of them out, or just maybe paying less attention
Speaker 3: and focusing on the metric of deployment in terms of
Speaker 3: how we would split our time.
Speaker 1: So you're not ignoring them, but they don't get their
Speaker 1: own research note, yet it's the right way to put it.
Speaker 3: Not yet. Okay, we look forward and we're excited to
Speaker 3: see new technologies gaining traction so that we can write
Speaker 3: reports about all of them.
Speaker 1: So how about liquid metal batteries another name that I
Speaker 1: just love. This is the show of favorite names for
Speaker 1: me for some reason. But liquid metal batteries, you know,
Speaker 1: how close are they to getting their own research note?
Speaker 3: Again, they're probably in that category that they can't get
Speaker 3: their own research note yet. If we're to define them,
Speaker 3: they operate using liquid electrolytes, with a defining characteristic being
Speaker 3: a molten salt electrolyte. But again, maybe they don't have
Speaker 3: a note on them yet.
Speaker 1: And then another one that is an emerging technology. Tell
Speaker 1: me a little bit about sodium iron chloride batteries.
Speaker 3: So it's another type of high temperature rechargeable battery. Again
Speaker 3: it's grouped in one of these other technologies that we
Speaker 3: didn't have enough data points to get their own section.
Speaker 3: But another technology that we look out for.
Speaker 1: Not enough data points then means the world is not
Speaker 1: yet putting it all together. That we may see as
Speaker 1: more projects come to light and ability to analyze it further.
Speaker 1: I want to know on this spectrum of how long
Speaker 1: that energy can be stored for which one has the
Speaker 1: longest duration energy storage? And then within this definition of
Speaker 1: just you know China, in some cases saying only four
Speaker 1: hours is necessary to be classified as long duration energy storage,
Speaker 1: what is the least long duration and what is the
Speaker 1: most long duration technology?
Speaker 3: Yeah, maybe we can give some context in terms of
Speaker 3: the data points that we're received to give you a
Speaker 3: sense of where we see the most need in terms
Speaker 3: of durations. So about forty percent of the data points
Speaker 3: that we collected were actually four dishort durations of one
Speaker 3: to four hours, and then forty two percent was for
Speaker 3: a dishort duration between five and ten hours. So we
Speaker 3: have a majority of the data representing technologies and projects
Speaker 3: that are between one and ten hours. This means that
Speaker 3: the industry is still moving and around that duration phase
Speaker 3: just because one many of them are early stage, so
Speaker 3: it makes more sense to do a smaller project for
Speaker 3: a shorter duration to prove it as a concept. And
Speaker 3: another key reason that we're seeing shorter durations is because
Speaker 3: that's the need we're currently seeing. So as Ye previously mentioned,
Speaker 3: there's not a lot of policy supporting long duration in
Speaker 3: many markets beyond these that we're seeing that I previously mentioned,
Speaker 3: and there's not a way that these storing energy for
Speaker 3: long durations is compensated in energy systems such as in
Speaker 3: the US. That's one of the reasons that we're seeing
Speaker 3: a shorter duration. And within each of these durations, there
Speaker 3: are different technologies that might be competing. For example, thermal
Speaker 3: energy storage typically makes sense for higher durations, so you
Speaker 3: might see more thermo energy storage projects for higher durations.
Speaker 1: What's the maximum number of hours a thermal energy storage
Speaker 1: project could do.
Speaker 3: So it really varies. We can see durations up to
Speaker 3: twenty four hours, so from the data point that we collected,
Speaker 3: in addition to costs, we ask people about different performance
Speaker 3: metrics including duration and thermal energy storage could really vary
Speaker 3: between two to four hours up to twenty.
Speaker 1: Four So some of these technologies, if I really put
Speaker 1: it simply, are being used as speakers. Meanwhile, others are
Speaker 1: actually being used for let's say, night time energy for
Speaker 1: solar or for changes to weather patterns. When we're thinking
Speaker 1: about other parts the renewables as opposed to being plugged
Speaker 1: in for peak demand. Yes, but both use cases are
Speaker 1: valid within this launderation.
Speaker 3: Energy storage.
Speaker 2: It highly depends, so we are seeing companies developing for
Speaker 2: hours up to one hundred hours more launderation storage, so.
Speaker 1: What can do one hundred hours.
Speaker 2: Some companies, I think one of the I think most
Speaker 2: high profile companies called form Energy, which is a startup
Speaker 2: in the US, is actually developing the iron air technology
Speaker 2: that can serve duration over one hundred hours. And I
Speaker 2: think one of the major use case of those technologies
Speaker 2: are actually pelling with renewable projects to turn the renewables
Speaker 2: into the round the clock electricity supply and they can
Speaker 2: display the core and gas pop plants, and also they
Speaker 2: can also defer the great investments in some markets or
Speaker 2: some region. Actually, we're seeing quite some projects that are
Speaker 2: being developed by this company in the US. Actually, some
Speaker 2: utilities are very interesting in such kind of technologies as
Speaker 2: one of the I think promising options to displace those
Speaker 2: Asian core and the guess power plants. So this is
Speaker 2: one of the I think major use case we are
Speaker 2: seeing for those and new storage. But oftentimes we are
Speaker 2: seeing a lot lot of intro day and new storage,
Speaker 2: so duration with six up to twelve hours, so they're
Speaker 2: actually paired with solar assets to generate elegacy during the
Speaker 2: evening peak and also over the nighttime, So this is
Speaker 2: another dominating usage of I think lun duration storage use
Speaker 2: case currently we are seeing.
Speaker 1: I mean, I know you've both said that the majority
Speaker 1: of the market is at these kind of single digit
Speaker 1: to kind of low double digit numbers of hours, but
Speaker 1: I find the one hundred hour use case to be
Speaker 1: incredibly interesting and will be watching that so closely because
Speaker 1: to your point, it's not about these technologies competing with
Speaker 1: one another for market share. It's actually about how they
Speaker 1: can displace existing legacy energy like gues so ye ye. Evelina,
Speaker 1: thank you so much for joining today and talking about
Speaker 1: this really rapidly evolving space with so much potential and
Speaker 1: necessity for the rollout of renewables deployment.
Speaker 2: Thank you Dana for having us.
Speaker 3: Thank you, Dania.
Speaker 1: Today's episode of Switched On was produced by Cam Gray
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