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Countries around the world need to provide policy support for the long-term energy storage industry by 2030

Countries around the world need to provide policy support for the long-term energy storage industry by 2030


According to foreign media reports, the Global Long-term Energy Storage Committee (LDES) recently released the latest long-term energy storage committee policy toolbox report. The report points out that before the market matures from 2030 to 2035, countries around the world need to provide major policy support for the long-term energy storage industry.

The report, Titled "Journey to Net Zero: An Action Plan to Unlock Safe, Carbon-Free Power Systems," outlines key considerations and options for designing and implementing an energy transition policy and regulatory framework that facilitates long-term energy storage

The Long Time Energy Storage Committee (LDES) is an organization comprised primarily of the Chief Executive Officers (CEOs) of energy storage vendors, established at COP26 in November 2021 with leading members including 50 companies and stakeholders in the long-term energy storage industry. The committee said there is a need to signal now to spur the scaling, investment and adoption of long-term energy storage systems.

The report, released by the Long-Term Energy Storage Council (LDES), echoes similar data recently released by the European Energy Storage Association (EASE), when 60% to 70% of the power grid comes from renewable sources, the demand for long-term energy storage solutions has increased significantly, and about 85 to 140 TWh of long-term energy storage systems may need to be deployed globally by 2040.

The report notes that the main deployment barriers now include limited policy certainty for long-term energy storage, limited awareness and definition of energy storage asset classes, high initial project costs, increased investor risk awareness, lack of revenue streams and long development timelines.

The first policy considerations in this report outline that the level of policy intervention will change as the long-term energy storage market changes, and divide this change into three phases. The first is the "market creation" phase, which will require full revenue certainty and broad support from policymakers between now and 2025.

From 2025 to 2030, the "market growth" phase will dominate, during which deployment will be increased and costs will be reduced, but strong support from regulators and policymakers will still be needed.

The "market maturation" phase will occur in 2030-2035. At that time, the income stabilization mechanism will be gradually abolished, and the risk of merchants will increase.

In addition, revenue support mechanisms that should be considered to help the long-term energy storage industry evolve include upper and lower limit mechanisms, capacity markets, contracts for difference (CFDs), hourly energy attribute certificates, long-term bilateral contracts for ancillary services, node and location pricing, a regulated asset base, and round-the-clock clean electricity purchase agreements (PPAs).

Direct technical support, including grants, incentives and targeted tenders, should also be used to create an enabling environment for emerging energy storage technologies.

The report includes a policy tool evaluation framework that allows users to compare the scores of different policy options on seven indicators covering project feasibility, ease of implementation, and long-term effectiveness in providing a safe, reliable, and affordable, low-carbon energy future.

The Long-Term Energy Storage Council (LDES) shows how all of these tools can be used in practice, including a theoretical example of a 150MW, 12-hour long-term energy storage solution that will be operational in Germany in 2025, as shown in the table below.