Long duration, utility-scale energy storage could grow to 125 gigawatts (GW) by 2050, a fivefold increase, according to a new report from the National Renewable Energy Laboratory (NREL).
There are currently about 23 GW of energy storage installed in the United States, almost all of which is pumped hydropower and is assumed to have a duration of up to 12 hours, NREL said.
The report, Economic Potential of Diurnal Storage in the U.S. Power Sector, found that diurnal storage, that is, storage with durations of up to 12 hours, is “extremely competitive on an economic basis.”
There is “significant market potential for diurnal energy storage across a variety of scenarios using different cost and performance assumptions for storage, wind, solar photovoltaics (PV), and natural gas,” the report’s authors wrote.
Across all scenarios, deployment for energy storage exceeds 125 GW by 2050 but, depending on cost trajectories and other variables, could go as high as 680 GW, “indicating a rapidly expanding opportunity for diurnal storage in the power sector,” the report found.
Initially, new energy storage installations will be mostly resources with shorter durations, up to four hours, but then will progress to durations of up to 12 hours as technology costs decrease and renewable resource penetration increases, the report said.
The report’s models project that annual deployment of battery storage will range from 1 GW to 30 GW by 2030 and by 2050 will range from 7 GW to 77 GW.
“These are game-changing numbers,” Will Frazier, NREL analyst and lead author of the report, said in a statement.
To assess the viability of long duration storage, the researchers added new capabilities to NREL’s Regional Energy Deployment System (ReEDS) capacity expansion model to represent the value of diurnal battery energy storage when it is allowed to provide grid services. The cost and performance metrics focused on lithium ion batteries because the technology has more market maturity than other emerging technologies.
The report found that economic storage deployment is driven primarily by the combination of capacity value and energy arbitrage, or time-shifting, value. “The combination of these value streams is needed for optimal storage deployment to be realized,” the authors said.
The report also reaffirmed the strong correlation found between solar PV penetration and energy storage market potential. More PV generation “leads to narrow net-load peaks in the evenings which increases the market potential of storage capacity value. More generation from PV also creates more volatile energy price profiles which increases the market potential of storage energy time-shifting value,” according to the report.
Across the report’s cost-driven scenarios, variable renewable energy reaches penetrations of 43 percent to 81 percent but does not achieve the deployment needed to meet deep decarbonization goals, the authors said. “Future work will consider scenarios with an accelerated transition to a clean energy grid by 2035 and the resulting impact on storage deployment,” they said.
The next report in NREL’s Storage Futures Study series will assess customer adoption potential of distributed diurnal storage for several future scenarios and look at the larger impacts of storage deployment on power system evolution and operations.