Evaluating the Value of Long-Duration Energy Storage in California

Energy storage will play an increasingly important role in California’s transitioning energy system. Specifically, long-duration storage (storage with a duration of eight or more hours) will be important during critical periods such as nighttime and during cloudy days, particularly in winter. This project examines various scenarios to better understand the value of long-duration energy storage in meeting California’s zero-emissions target for retail sales of electricity in 2045, while exploring duration, cost, and other attributes required for future energy storage. The need for storage depends on several factors, including the choice of generation technologies, availability of transmission, ability to shift load, and many other details of the grid. This project shows that California’s solar-driven grid will benefit from 8-hour duration storage installed with a power rating that can meet peak demand, which typically occurs just after sunset. Longer-duration storage (e.g., 100-hour) is projected to capture 10 percent of the market if the cost per kilowatt-hour ($/kW) is less than the $/kW cost of lithium-ion batteries for 40 percent efficient 100-hour storage or if the $/kW is less than twice the lithium-ion cost for 80 percent efficient 100-hour storage. As the energy transition matures in the 2045 timeframe, 100-hour storage is projected to capture an increasing fraction of the market. High round-trip efficiency is important, with lithium-ion setting the system-level efficiency target at about 85 percent. Low efficiencies are more acceptable for storage that is used infrequently, as is expected for 100-hour storage. The results are strongly dependent on the cost assumptions and on the cap that is imposed on the amount of each resource that can be adopted. The selection of more wind and geothermal could increase greatly if low-cost sites are identified for these. Thus, the report focuses on identifying trends rather than concluding on specific targets, and it cautions the reader to use the results in this context.