Long-Duration Energy Storage: Insurance for a 100% Renewable Grid

The severe consequences of climate change are becoming more apparent day by day, and transitioning our electricity systems to being lower impact and using affordable resources remains essential to help limit human impact. 

Canada’s electricity grid is ranked as one of the greenest in the world, with more than 70% of electricity generation provided by nuclear and renewables including hydroelectric power and increasingly, wind and solar. 

But with provinces across the country facing an increasing demand for electricity ranging from electric car use to manufacturing, our ability to generate the remaining 30% from cleaner resources and achieve 100% decarbonization before the consequences of climate change impact daily life is becoming compromised.

Long-Duration Energy Storage Provides Reliability 

Renewable energy sources are clean, abundant, and cost-effective, becoming the choice energy source in many parts of the world. However, transitioning to wind and solar generation alone is not enough, given the inherent intermittency when the wind and sun are not abundant. 

“Transitioning to wind and solar generation alone is not enough, given the inherent intermittency when the wind and sun are not abundant.”

Picture a world where every time the wind stops blowing or the sun goes down, the power grid is plunged into darkness. That’s the reality we would face if we didn’t have a way to store surplus energy generated by renewable sources and shift them to periods of high demand but low supply. Enter long-duration energy storage or LDES, an insurance for a net-zero energy future. 

“The objective and advantage of LDES systems is to cost-effectively store excess energy generated during times of high production but low demand, releasing it back into the grid when demand is high but renewable energy production is low.”

LDES technologies store large amounts of electricity for extended periods of time, typically ranging from 8 hours to multiple days or even weeks. Not to be confused with lithium-ion batteries, which are constrained to less than 8 hours duration, LDES technologies include a variety of systems such as flow batteries, advanced compressed air, and pumped hydro energy storage (PHES).

The objective and advantage of LDES systems is to cost-effectively store excess energy generated during times of high production but low demand, releasing it back into the grid when demand is high but renewable energy production is low. 

Canada is Well-Suited to Take Advantage of Multiple LDES Technologies 

With Ontario’s Independent Electricity System Operator expecting electricity demand to double by mid-century, the Ministry of Energy recently announced Powering Ontario’s Growth Plan, which commits to securing quickly growing electricity needs with emission-free sources between 2030-2050. 

Although encouraging, provinces like Ontario need to consider clear standalone pathways for new large-scale grid assets that are available today, including LDES. Fortunately, Canada’s landscape has available to it multiple LDES technologies – like that of Hydrostor – which can position Canada at the forefront of the energy transition, developing solutions needed to achieve deep decarbonization. 

“Compressed air energy storage uses compressed air and water to store electricity and allows grid operators to draw on renewables, even when there is no sun or wind.”

Diversifying With Advanced Compressed Air Energy Storage

One of the leading large-scale LDES technologies globally is advanced compressed air energy storage (A-CAES), a proven and established technology that Canadian company Hydrostor is developing across the world.   

Compressed air energy storage uses compressed air and water to store electricity and allows grid operators to draw on renewables, even when there is no sun or wind. A-CAES integrates with existing grid infrastructure, enabling communities and industries to embrace it with little disruption and without relying upon hard-to-recover sources.

Think of A-CAES as a significantly less constrained version of pumped hydro energy storage (PHES), capable of shifting equal amounts of renewable energy (hundreds of megawatts) during low consumer demand and discharging for equal amounts of time (8 hours or more) during high consumer demand. 

Ensuring an Affordable, Low-Impact, and Reliable Energy Transition

Importantly, Hydrostor’s solution uses up to 20x less water and land compared to equivalent-sized closed loop PHES solutions, and facilities can be located close to where the demand is while still maintaining the same economic stimulation, 50+ year lifetime, and zero degradation. 

Just as critically, this is not an early-stage technology – A-CAES is commercially proven and is being deployed today around the world. Hydrostor recently signed a 200 MW 25-year power purchase agreement in California, worth nearly $1 billion, with a similar advanced project in Australia. Hydrostor also has a 5,000 MW project pipeline covering jurisdictions around the world – which includes the earlier stage Quinte Energy Storage Centre, a 500 MW project located in Ontario. 

Supporting a Just Transition From Carbon-Emitting to Carbon-Free Energy

In 2021, the energy sector employed over 257,000 Canadians, the majority of whom work in fossil fuels. As the country shifts away from emission-creating energy-generating methods, it is critical to retrain and support workers in the industry to develop skills in the renewable sector. 

The experience and expertise gained from the oil and gas sector, such as engineering, project management, construction, and environmental assessment, can be invaluable in the development of A-CAES and other renewable energy projects. 

Through training and education programs, Canada can ensure that existing fossil fuel industry workers and the potential of millions more have the skills to succeed in the renewable energy industry.

Ensuring Timely Construction and Integration of Vital Energy Storage Solutions 

Complementing Powering Ontario’s Growth Plan, Canada recently introduced an investment tax credit as part of the 2023 federal budget. The budget includes a 30% investment tax credit for energy storage technologies and renewable energy technologies. 

This tax credit will promote a significant uptake of renewable energy across Canada, but this alone will not be enough for us to achieve net zero. The federal and provincial governments must create clear contracting pathways and supportive regulatory environments, streamlining permitting processes and providing incentives for LDES deployment. 

By establishing contracting pathways that prioritize the development of essential LDES facilities, the transition to a resilient and sustainable energy landscape can be accelerated, ensuring timely construction and integration of vital storage solutions. 

“Either there is no specific policy in place to enable LDES or such action is being targeted to specific projects at the exclusion of potentially lower-cost, lower-risk solutions.”

It is imperative that provinces act today on their longer-term LDES needs if we’re realistically going to be able to achieve our collective decarbonization objectives. Specifically, this requires a broad inclusion of all LDES technologies in procurement processes to ensure the best outcomes for all Canadians.  

To date, this action has been inconsistent at best: Either there is no specific policy in place to enable LDES or such action is being targeted to specific projects at the exclusion of potentially lower-cost, lower-risk solutions.  

We recommend coordinated efforts to immediately define clear and technology-neutral targets for LDES – even if needs are anticipated in the 2030s, action is required today to enable the development of longer lead-time resources. Provinces should then establish procurement programs in short order to enable contracting pathways for these resources. 

Canada risks being left behind in the global race for decarbonization technologies if this last jigsaw piece on contracting pathways isn’t addressed in the very near term. 

Leading the Way to a Sustainable Clean Energy Future

The need for long-duration energy storage solutions has never been greater. Failure to support LDES technologies will have irreversible consequences for both our economy and the environment. 

I am optimistic about our prospects if Canada and the provinces prioritize pathways for solutions like Advance Compressed Air Energy Storage and lead the way toward a sustainable clean energy future.