DOE Announces $350 Million for Long-Duration Energy Storage

By Anjali Joshi

Growing penetration of renewable energy on the U.S. grid is boosting the need for energy storage, to balance out peaks and troughs in demand and production. Currently, lithium-ion batteries are dominating the energy storage segment, but these batteries typically only have durations of up to 4 hours. We have witnessed long-duration energy storage projects involving lithium-ion batteries that can offer even 8-hour energy storage duration as per the current demand. The high cost of non-lithium-ion long-duration technologies is a big hurdle to their widespread adoption.

On 14 November 2022, the U.S. Department of Energy (DOE) announced nearly $350 million of funding for emerging long duration energy storage (LDES) demonstration projects offering energy storage for 10-24 hours or longer. Up to 11 demonstration projects will be selected based on their potential to comply with the DOE’s long-term goal of reducing LDES’ cost by 90%. Each project will receive funding equivalent to 50% of its cost. Furthermore, each selected project will be required to include a community benefits plan with the aim of creating good domestic jobs and benefits
for communities.

The DOE has been strategically working on its target of reducing LDES’ cost since the Trump Administration, when the Energy Storage Grand Challenge competitive funding opportunity was launched. Under the Biden Administration, the DOE funded a $75 million center for LDES research at Pacific Northwest National Laboratory. In July 2021, the DOE announced an initiative called the Long Duration Storage Shot, which seeks to reduce costs for LDES by 90% by 2030. In May 2022, the DOE announced the new Long Duration Energy Storage for Everyone, Everywhere (LD ESEE) Initiative, created by the Infrastructure Investment and Jobs Act of 2021 The initiative aims to advance energy storage systems toward widespread commercial deployment by lowering costs and increasing the duration of energy storage resources.

In combination with the Inflation Reduction Act, which includes federal tax credits for standalone energy storage projects, this new $350 million funding from the U.S. government will further attract companies to build and deploy advanced energy storage technologies.

States like California and New York have also supported LDES technologies. In May 2021, California regulators called for a 1 GW LDES procurement for 2026. LDES was defined as “technologies offering between 8 and 100 hours of duration”. In January 2022, the Governor of California announced $380 million in LDES funding over two years as part of the $2 billion Clean Energy Investment Plan as part of the state’s budget for 2022 – 2023. In September 2022, the Governor of New York announced $16.6 million in funding for five LDES projects in the state. In addition, $17 million were announced for market players through a competitive funding opportunity for projects advancing the development and demonstration of scalable LDES technologies.

Through increased funding for advanced LDES technologies, the U.S. government aims to integrate grid storage more effectively, while increasing grid resilience, all towards the Biden-Harris Administration’s target of a carbon-free electric grid by 2035 and a net-zero emissions economy
by 2050.

Source: Biden-Harris Administration Announces Nearly $350 Million For Long-Duration Energy Storage Demonstration Projects (U.S. Department of Energy)