BloombergNEF’s latest research unveils the growing competition faced by lithium-ion batteries from emerging long duration energy storage (LDES) technologies.
Despite still being in the early stages, certain LDES options, like thermal energy and compressed air storage, are demonstrating cost advantages over lithium-ion for longer durations.
According to BNEF’s survey of seven LDES technology groups and 20 technology types, certain options already offer more cost-effective storage solutions than lithium-ion batteries for durations exceeding eight hours.
For instance, thermal energy storage and compressed air storage boast an average capital expenditure of $232 (£182) per kilowatt-hour and $293 (£230)/kWh, respectively.
In comparison, lithium-ion systems had an average capex of $304 (£238)/kWh for four-hour duration systems in 2023, making them generally more suitable for shorter-term storage needs.
However, challenges remain, particularly in non-Chinese markets where costs are notably higher.
Experts emphasise the importance of supportive policies and ongoing technological advancements to drive wider adoption of LDES and enhance their competitiveness against lithium-ion batteries.
Yiyi Zhou, BloombergNEF’s Clean Energy Specialist and co-author of the report, said: “The significant cost disparity is largely due to China’s far greater adoption of LDES technologies.
“While other nations are still in the early stages of commercializing LDES technologies, China is already developing gigawatt-hour scale projects, driven by favourable policies.”
