Long-duration energy storage is gaining significant momentum as the share of renewable energy increases and the demand for long-term regulation capabilities within the power grid rises. This shift presents challenges for the safe and stable operation of power systems, particularly during extreme weather events. Under the combined pressures of integrating new energy sources and electricity market reforms, long-duration energy storage is poised for substantial growth.
In the context of energy transition and sustainable development, long-duration energy storage technologies have become a focal point in the energy sector globally. According to data from the National Energy Administration, by the end of 2024, China is expected to have a cumulative installed capacity of new energy storage projects reaching 73.76 million kilowatts (168 million kilowatt-hours), which is approximately 20 times the capacity at the end of the 13th Five-Year Plan and represents a more than 130% increase compared to the end of 2023.
When considering storage duration, projects with a capacity of 4 hours or more are gradually increasing, accounting for 15.4% of installed capacity, which is an increase of about 3 percentage points from the end of 2023. Projects with 2 to 4 hours of storage make up 71.2%, while those under 2 hours account for 13.4%.
Long-duration energy storage is generally understood as systems capable of sustained charge and discharge cycles for more than 4 hours. This category primarily includes five types: pumped storage, compressed air energy storage, molten salt thermal storage, flow batteries, and hydrogen storage. To date, China has implemented several policies to encourage the large-scale application of high-capacity long-duration storage technologies.
In February of this year, the National Energy Administration issued the “2025 Energy Work Guidance Opinions”, emphasizing the need to strengthen core technology research and innovation, particularly in new storage technologies, including long-duration storage. Additionally, the Blue Book on the Development of New Power Systems from the National Energy Administration indicated that China aims to meet the balancing regulation needs on a daily time scale from 2030 to 2045 and to cover all types of storage systems by 2045 to 2060.
In response to policy guidance, numerous lithium battery storage companies, including Haicheng Energy, EVE Energy, and CATL, are increasingly focusing on long-duration storage. Recently, global sustainable energy infrastructure investor Quinbrook Infrastructure Partners announced a partnership with CATL to develop an 8-hour battery storage project in Australia. Quinbrook plans to provide approximately 3GW of new long-duration energy storage (LDES) technology, equivalent to 24GWh of storage capacity, distributed across various locations in Australia.
In December of last year, Haicheng Energy launched the ∞Power 6.25MWh customizable storage system, designed for large-capacity storage, featuring dedicated batteries with capacities of 587Ah and 1175Ah. The same month, EVE Energy unveiled its new generation of storage batteries, Mr. Big, in its Jingmen super factory, with a capacity of 628Ah, making it the first mass-produced battery cell exceeding 600Ah in the industry. EVE Energy anticipates that the proportion of large-capacity storage battery installations will rapidly increase, predicting a complete shift to 314Ah in domestic large storage by 2025, while the overseas market will see a coexistence of 280Ah and 314Ah products for some time.
Despite the increasing focus on long-duration storage, initial costs remain high. According to Wu Wei, an associate professor at Xiamen University’s China Energy Policy Research Institute, the major advantages of long-duration storage compared to short-duration storage are its longer time scale, larger storage capacity, and lower cost per unit. Long-duration storage can facilitate power regulation across various timeframes, from daily to seasonal cycles, significantly reducing the cost of electricity. However, some long-duration storage technologies still face challenges such as high costs, limited applications, and insufficient scale.
One industry expert noted that while the flow battery technology is diverse, the all-vanadium flow battery remains the most widely used. However, the technology is still in its early developmental stages, lacking the scale necessary to lower costs significantly. Overall, aside from pumped storage, new long-duration storage technologies are still in the early stages of commercialization and have not yet been widely adopted.
Regarding the core challenges facing the commercialization of long-duration storage, Wu Wei highlighted that the raw materials and manufacturing processes for new long-duration storage technologies have not yet achieved large-scale development, leading to high initial investment costs. Additionally, the profitability of long-duration storage relies heavily on electricity market mechanisms, yet most markets currently lack accurate pricing mechanisms to reflect the value of long-duration storage. This results in unclear lifetime profitability. Furthermore, some new long-duration storage technologies lack supporting infrastructure; for instance, hydrogen storage requires the establishment of hydrogen production, storage, and refueling networks, and certain resources (such as vanadium) are concentrated in a few countries, leading to price volatility. Current electricity markets primarily focus on energy transactions, and capacity markets and ancillary service markets have yet to fully recognize the “system insurance” value of long-duration storage.
Nonetheless, as relevant technologies mature and the demand for long-term regulation resources in energy systems grows, long-duration storage is expected to reach full commercialization potential around 2030, according to Wu Wei.
Overcoming Key Technical Challenges
Although the current construction costs of long-duration storage systems are high, resulting in lower project investment returns, the trend towards long-duration storage is undeniable. Experts believe that reducing costs will require innovations in technology, large-scale production, and optimized system design. In terms of technological innovation, there is a need to further improve the energy density and cycle life of storage batteries to lower the cost per unit of storage. Additionally, optimizing system design can enhance the overall performance and reliability of storage systems while minimizing operational and maintenance costs.
Academician Zhao Tianshou from the Chinese Academy of Sciences has pointed out that while flow battery technology faces cost challenges, improvements in key technologies such as battery current density and electrolyte utilization can significantly reduce system costs and promote industrial applications. For the future development of long-duration storage, Wu Wei suggested focusing on critical bottlenecks, including the development of low-cost electrolytes, breakthroughs in high-temperature thermal materials, and optimization of hydrogen energy materials. By optimizing processes and scaling production, system efficiency can be enhanced, leading to breakthroughs across the entire “materials-processes-systems” chain.
In terms of market mechanisms, releasing the commercial value of long-duration storage can be achieved through capacity compensation mechanisms, expanding ancillary service markets, and innovating green financial tools. Furthermore, the government can provide financial subsidies and tax incentives for initial high-cost technologies such as flow batteries and hydrogen storage. By improving electricity and carbon market mechanisms, as well as innovating business models like shared storage, the recovery of storage costs can be accelerated, expanding the profitability of long-duration storage.
Looking ahead, long-duration storage technology will rapidly transition from the technology reserve stage to large-scale application, driven by policy support, technological innovation, and market demand. Consulting firm McKinsey predicts that the potential market for long-duration storage will begin to grow significantly starting in 2025, with a projected global cumulative installed capacity reaching 30-40GW and a cumulative investment of approximately $50 billion.
