The Department of Energy (DOE) Loan Programs Office (LPO) is working to support deployment of energy storage solutions in the United States to facilitate the transition to a clean energy economy.Accelerated by DOE initiatives, multiple tax credits under the Bipartisan Infrastructure Law andInflation Reduction Act, and decarbonization goals across the public and private sectors, energy storage will play a key role in the shift to a net-zero economy by 2050.
Energy storage serves important grid functions, including time-shifting energy across hours, days, weeks, or months; regulating grid frequency; and ensuring flexibility to balance supply and demand. Energy storage is particularly important in an increasingly electrified world where demand is rising and supply is shifting toward variable renewables, increasing the need for dispatchable energy.
Energy storage encompasses an array of technologies that enable energy produced at one time, such as during daylight or windy hours, to be stored for later use. LPO can finance commercially ready projects across storage technologies, including flywheels, mechanical technologies, electrochemical technologies, thermal storage, and chemical storage.
Residential, commercial, industrial, and utility users are beginning to install energy storage systems to fulfill their energy and reliabilityneeds, but challenges remain to deploying these systems at scale. The barriers are as varied as the technologies. Common challenges for the mature technologies LPO focuses on include insufficient supply chains, high manufacturing costs, and lack of debt financing for commercial deployment due to perceived technical risk and unpredictable cash flows in today''s power markets.
LPO can help reduce these barriers by financing early deployments of energy storage technologies and associated supply chains, proving to private lenders that energy storage systems are bankable and accelerating scale up.
To learn more about how LPO could support your critical materials project, please request a no-cost pre-application consultation. During the consultation, LPO will work with you to determine whether the project is eligible for financing.
Achieving the Biden administration''s goal of decarbonizing the power sector by 2035 will require a slew of energy storage technologies beyond just lithium-ion batteries, and multiple players are bringing new technology solutions to the market to fill that gap.
Lithium-ion batteries can provide four to eight hours of storage capabilities, but as the grid becomes more renewables-heavy it will require technologies with longer durations and different characteristics to mimic a "baseload" generation combination, experts say.
Globally, long-duration energy storage projects have pulled in more than $58 billion in private and public commitments since 2019, Wood Mackenzie reported at the end of last year. These investments reflect some 57 GW of long-duration storage. In the U.S., meanwhile, the Department of Energy has been focused on supporting the commercialization of this market.
"When we think about the path to net-zero, we''re going to need a lot of different technologies in our ecosystem to really get us to where we need to go," Marlene Motyka, Deloitte''s U.S. renewable energy leader, said.
This will include lithium-ion batteries as well as what she refers to as "mid-term" duration storage, like iron-air or zinc-based batteries. In addition, the system is going to need some very long-duration – even seasonal – energy storage, that can pitch in for months at a time, like hydrogen-based storage.
Multiple players are bringing these technologies to the market, and utility regulators are showing interest in them. In May, the California Public Utilities Commission gave the green light to Pacific Gas & Electric to move forward with an 8.5 MW microgrid, comprising a hybrid battery and hydrogen fuel cell system, developed by Energy Vault and located at a Northern California substation that experiences wildfire-related outages. The system is expected to generate up to 293 MWh over a 48-hour period, according to PG&E''s filing.
Energy Vault is also working on a gravity energy storage solution, which uses a mechanical process of lifting and lowering composite blocks made from soil and waste materials to store and dispatch energy. In August, the company announced it had executed its first license and royalty agreement for the technology with an as-yet undisclosed U.S.-based renewables developer.
And in September, Dominion Energy approached Virginia regulators for approval of a storage project that will test two new technologies – iron-air batteries developed by Form Energy, which the company says can provide 100 hours of electricity storage, and zinc-hybrid batteries from Eos Energy, which can store power for anywhere between three and 12 hours.
Looking over the next decade, the electric grid is going to need a mix of storage solutions, varying from state to state depending on their electric generation portfolio and load profiles, Motyka said. But some technologies are likely to emerge as more prominent than others — for instance, because they don''t have geographical limitations.
The long-term robustness of technologies'' supply chains will also be an important factor in whether they can scale, said Craig Rizzo, managing director with Deloitte Consulting''s Energy, Resources & Industrials practice. Other factors to look at include the environmental footprint of the technology and its supply chain, as well as the reliability of the asset itself.
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