Energy Transition

Long-duration energy storage | The hurdles ahead

byEvan MacDonald

Energy storage is gaining traction as an essential component for maintaining load-generation balance in the modern electricity market. Viewed as a promising solution to a widespread challenge, long-duration energy storage (LDES) may be the key to counteracting the pitfalls of variable renewable power generation, especially as we look toward the industry’s aspiration of a zero-emission world. However, these technologies are enduring their own challenges to mass adoption compared to some of the more traditional lithium-ion storage technologies. These include a lack of a revenue-generating framework to drive capital deployment, an undefined long-duration reserve framework forcing competition with short-duration project markets and a lack of commercial-scale development on which to lean to prove successful implementation.

If dependent on a pure energy arbitrage business model, the major needle movers on a project’s balance sheet become capital cost, average spread per cycle and the yearly cycle frequency. Assuming a $72,000/MWh capital cost for a 10 MW/1,000 MWh iron-air project, Enverus Intelligence® | Research (EIR) can derive the required breakeven arbitrage spread required for a 10% return on equity (at various cycle counts per year) and the maximum spread achievable in each market over the past five years. Figure 1 reveals that even with low capital costs, the energy arbitrage model fails to produce a financially promising project across all ISOs, irrespective of cycle count. Thus, EIR looks to a significant widening of seasonal location market pricing spreads or the addition of alternate revenue streams to justify confident investment in these 100+ hour LDES projects.

Click here to read more about how concrete could be used to store energy.

Highlights from Energy Transition Research

  1. Green hydrogen – Pathways to paradise – This report explores the key drivers behind green hydrogen production costs and demonstrates how inputs impact project returns when paired with U.S. incentives.
  2. CCUS project tracker – Make it (CO2) go away – The Energy Transition Research team illustrates the use cases of project trackers in following CCUS activity around the world.
  3. Advancing Canada’s green future – Emissions reductions, CCUS and DLE – This slide deck explores the three frontiers particularly relevant to Canada’s energy transition: the current state of GHG emissions, CCUS and direct lithium extraction.

Energy is changing. Connect weekly with the ideas that are leading the way.

About Enverus Intelligence®| Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies, and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.  Click here to learn more.

Evan MacDonald

Evan MacDonald

Evan MacDonald is a senior geology associate at Enverus, working on the Subsurface Innovation Energy Transition team. His major focus is split between developing and maintaining components of the Enverus Energy Transition geology product and producing topical research for institutional and corporate clients with his team members. Evan graduated from University of Alberta with a specialized degree in Geophysics in 2013, and returned shortly after to complete an Integrated Petroleum Geosciences masters degree in 2016 at the same institution.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Enverus Blog
Power and Renewables
ByKatherine Paton-Ilse

In an era where electricity demands continue to escalate, the importance of a reliable and efficient electrical grid cannot be overstated. Transmission lines form the backbone of the power grid, crucial for transmission and distribution of electricity from power generation...

ByAndrew Dittmar

In a year that began with lackluster minerals-focused M&A activity, there were signs of life in Q2 with the first transaction exceeding $10 million as Kimbell Royalty Partners acquired MB Minerals for $143 million. Compared to operating company M&A, even this...

Enverus Blog - Analyst takes: 6 January energy trends you need to know
ByErin Faulkner

Over the last few quarters, executives at U.S. upstream operators have grown accustomed to analysts asking about cost inflation. It’s an inevitable part of every conference call. During the late July to mid-August earnings season for Q2, the question shifted...

Enverus Blog - Energy Transition Today: EPA jumpstarts EV uptake
Energy Transition
ByKevin Kang

Behind the meter (BTM) solar is a key factor in decreasing load in CAISO, especially in California where it has the most impact on annual demand. The state’s potential for nearly 195 GW of rooftop solar capacity exists, although its...

Enverus Blog - 3 price management capabilities to offset cost inflation
Energy Transition
ByKiana Cruz

Seismic surveys are a vital tool in the oil and gas industry. Effective use of seismic surveys allows industry professionals to identify prospects, assess potential resources, reduce risk and even quantify reserves – in short, to make well-informed decisions that...

Energy Transition
ByAlex Nevokshonoff

While we are still waiting for guidelines from the IRS regarding hydrogen incentives released with the Inflation Reduction Act (IRA) last year, it is clear that supportive policy must be in place for green hydrogen to compete in existing hydrogen...

Enverus Press Release - Breaking down the CCUS basins
Energy Analytics Energy Transition

Panel discussion with CCUS experts from Enverus EVOLVE Conference Introduction CCUS offers a promising solution to curb greenhouse gas emissions by capturing CO2 from industrial sources and power plants and storing it underground. CCUS has gained significant attention in recent...

Analyst Takes
ByChris Griggs

As we usher in the month of August, it’s an ideal moment for retrospection on the past month’s shifts and trends in the energy sector. Our proficient Enverus Intelligence® | Research (EIR) team has delved into critical trends and innovations,...

Energy Transition
ByCarson Kearl

The Vogtle Unit 3 nuclear reactor began its commercial operations at the end of July. Based in Georgia, the facility will provide clean electricity to the southeast U.S. for likely longer than the next half-century. This marks the first U.S....

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Get Energy Transition Research updates straight to your inbox by filling out the form below.

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert