Latest research: By 2035, long-term energy storage and large-scale V2G will be on par with fixed energy storage

A battery energy storage system deployed by Fluence, a leading company in the field of long-duration energy storage. Image: Leonardo Moreno

According to the Energy Transition Outlook released by DNV (DET NORSKE VERITAS), long-term energy storage technologies such as flow batteries, compressed air or gravity-based solutions are expected to enter the market on a large scale in the second half of the 1930s.

The global risk management service's annual flagship report on the global energy transition predicts that variable renewable energy capacity will grow 16-fold over the next 30 years. This will increase the need for flexibility by two to four times, a demand that can be met with energy storage .

DNV also expects that solar power will account for 38% of all electricity generation by 2050, of which a third will come from solar power plants with combined energy storage facilities. By 2038, the price advantage of co-sited projects compared with stand-alone PV projects will exceed the deployment cost difference between the two, which will help achieve this goal.

Part of the reason is cost reductions on the battery side: The report estimates that the current supply chain shock has only delayed the time for lithium-ion battery costs to fall below $100/KWh by one year, but in the long term, they could fall 80% by 2050.

Solid-state batteries offer the best potential for the next wave of performance and cost improvements, it said, adding that new battery materials have the potential to increase the speed at which batteries can be used for energy storage. But DNV argued these were not far off the company's long-term "learning rate" of an average cost reduction of 19% per year.

In terms of discharge duration, the report provides insights into the relationship between deployment level and duration in the global energy storage market. When storage capacity exceeds 0.5% of grid capacity, BESS units tend to shift to providing capacity (mainly through price arbitrage) rather than just providing frequency response services.

As this trend continues, longer-lasting energy storage technologies such as flow batteries, zinc-based batteries, compressed air batteries and liquid air batteries or gravity-based solutions will become more valuable. DNV expects these products to enter the market on a large scale in the second half of the 2030s.

The report discusses hydrogen storage when discussing the need for seasonal storage that lasts days or months. It cites the ACES Delta Green Hydrogen Project in Utah as a good example of a large-scale project being developed.

While DNV acknowledges this is the least cost-effective use of the technology, it expects green hydrogen for electricity storage to start being used in North America from the 2040s and become more widely available by the middle of the century.

The report is also bullish on the role of V2G technology, saying that from 2040 onwards its impact will be almost as large as that of stationary lithium-ion battery energy storage systems (BESS) and pumped hydro, reaching 220TWh per year.

(Source: DET NORSKE VERITAS Global Energy Storage Network, New Energy Network Comprehensive)