Long Duration Energy Storage Market: Growth, Size, Share, and Trends

The increasing use of renewable energy for power generation is a major driver of the long-duration energy storage (LDES) market, supported by government policies and regulations aimed at reducing greenhouse gas emissions. Since over 40% of energy-related carbon dioxide emissions come from burning fossil fuels, many countries are turning to renewables for electricity and other applications such as heating, desalination, water purification, and clean cooking. According to the International Energy Agency (IEA), renewable energy accounted for 29.5% of global electricity generation in 2022 and is expected to reach 42% by 2028, creating a growing need for LDES to manage fluctuating renewable output. Governments worldwide are setting ambitious renewable targets to address climate change and improve energy security, with regions like the European Union aiming for 32% renewable energy by 2030 and countries such as the US and China offering strong incentives for solar and wind projects. Financial support—including tax credits, subsidies, and feed-in tariffs—is further encouraging investment in large-scale and distributed renewable energy projects, boosting the adoption of renewable technologies globally

One of the primary restraints to the growth of the LDES market is technological immaturity. Most of the newly developed technologies lack commercial readiness and economies of scale. Chemical energy storage, especially flow batteries, has been of much interest because of the involvement of high-profile companies such as Sumitomo Electric Industries, Honeywell, and Lockheed Martin. However, this technology is associated with high costs and material availability. The most mature flow battery technology, vanadium redox flow batteries (VRFBs), suffer from the high cost of vanadium pentoxide and supply security concerns. Other alternative electrolyte chemistries, such as organic electrolytes, are under development and are still far from large-scale commercialization. Metal air batteries are inefficient due to the nature of the cathode reaction rate and issues such as anode degradation from dendrite formation. These batteries are also less feasible due to the high cost of catalysts, which are made of precious metals such as platinum and gold. Though metal air batteries are capable of discharging for longer periods and can be used as backup applications for renewables, their technological barriers prevent them from achieving cost-effectiveness and scalability

The implementation of favorable government policies is helping market players to overcome the financial, regulatory, and technological hurdles, which is driving the deployment of long duration energy storage systems. Governments around the world are realizing the importance of LDES for grid stability and the integration of renewable energy. These measures include direct incentives, such as subsidies and low-interest loans, tax credits, and grants. Under its Energy Earthshots initiative, the US Department of Energy presented the Long Duration Storage Shot, which aims at reducing the cost of an LDES to USD 0.05/kWh by 2030, rendering it more affordable. China, Germany, and other countries are also making investments in research and development and pilot projects on advanced energy storage technologies with a focus on flow batteries and compressed air energy storage. Some governments consider energy storage in their long-term energy transition strategies, which encourage the large-scale adoption of energy storage through legislative mandates and market mechanisms. These government initiatives create a favorable environment for market players to further technological innovation, increase adoption, and expand the market for long duration energy storage systems

The lack of standardization has prevented the broad adoption of long duration energy storage systems. Standardization of these systems will enable interoperability, optimize cost structures, and ensure quality consistency and compliance. However, LDES is a relatively nascent market and is characterized by the adoption of various technologies, such as flow batteries, CAES, thermal energy storage, gravitational energy storage, and hydrogen-based systems. All these technologies function on different principles. This makes it difficult to have common standards and protocols. One of the major problems associated with the absence of standardization is the difficulty with which LDES technology can seamlessly be integrated into the already existing infrastructure of the grid. The lack of standardized performance metrics, safety protocols, and system design causes problems in evaluating and integrating such systems among grid operators. For instance, the technical requirements to maintain and operate VRFBs are very different from those of CAES and, thus, have been implemented in varied manners. It also creates issues related to scalability, delay in implementation, and the formation of barriers to mass acceptance across geographical areas. Reducing this gap will be crucial to fast-track global LDES system deployments