Everything Is a Battery

Imagine a battery. Maybe you envision popping one into a fading flashlight or a dead remote controller. Perhaps you consider the little icon on the top of your phone or laptop screen, precariously dipping into the red while you search for a charger. Or you might picture the powerful battery pack inside your electric vehicle, helping to make gas stations obsolete.

These minor to major electrochemical marvels are fine, but the opportunity space for energy storage is so, so much larger — and weirder. Water moving between two reservoirs is a classic un-classic battery, but compressed air stored in a cavern, raising and lowering heavy blocks, even freezing water or heating up rocks can also all be batteries. And these methods of energy storage have the potential to be enormously helpful where standard lithium-ion batteries fall short — namely for long-duration energy storage and large-scale heating and cooling applications.

Lithium-ion batteries still dominate the market, Kevin Shang, a senior research analyst at energy consultancy Wood Mackenzie, told me. But “over the next 10 years, we do see more and more long-duration energy storage coming into play.” Typical lithium-ion batteries can provide only about four hours of continual power, occasionally reaching up to eight — though that’s an economic constraint rather than a technical one. Generally speaking, it’s too pricey for lithium-ion to meet longer-duration needs in today’s market. So as states and countries get real about their clean energy targets and install more wind and solar generation, they need some way to ensure their grids’ reliability when the weather’s not cooperating or demand is peaking.

“There’s a need for something that can substitute for natural gas,” Logan Goldie-Scot, director of market research at the sustainable infrastructure investment firm Generate Capital told me. Almost no one believes lithium-ion batteries will be a viable alternative. “And so then it is an open question of whether that role will be filled by long-duration energy storage, by green hydrogen, or by clean firm power” like nuclear or geothermal, he said.

There are some novel battery chemistries and configurations out there, from Form Energy’s iron-air batteries to flow batteries that store their electrolytes in separate tanks to zinc-based batteries. But there are also numerous more creative, non-chemical, not-what-you-might-consider-a-battery batteries vying for a role in the long-duration storage market.

A battery that stores compressed air in caverns

Founded back in 2010, Toronto-based Hydrostor has been pursuing “advanced compressed air energy storage” for a while now. Essentially, the system uses off-peak, surplus, or renewable grid energy to compress air and pump it into a water-filled cavern, displacing that water to the surface. Then when energy is needed, it releases the water back into the cavern, pushing the air upward to mix with stored heat, which turns a turbine and produces electricity.

“Everybody has talked about long-duration storage for probably the past five years or so. The markets have not been there to pay for it at all. And that’s starting to change,” Jon Norman, Hydrostor’s president, told me.

Part of Hydrostor’s pitch is that its tech is a “proven pathway,” as it involves simply integrating and repurposing preexisting systems and technologies to produce energy. It’s also cheaper than lithium-ion storage, with no performance degradation over a project’s lifetime. Major investors are buying it — the company raised $250 million from Goldman Sachs in 2022, to be paid out in tranches tied to project milestones. At the time, it was one of the largest investments ever made in long-duration energy storage.

The company has operated a small 1.75 megawatt facility in Canada since 2019, but now with Goldman’s help it’s scaling significantly, developing a 500 megawatt grid-scale project in California in partnership with a community choice aggregator, as well as a 200 megawatt microgrid project in a remote town in New South Wales, Australia.

“Our bread and butter application is serving the needs of grids and utilities that are managing capacity and keeping the lights on all the time,” Norman told me. The company’s projects under development are designed to deliver eight hours of energy. “That’s what the market’s calling for right now,” Norman said, though theoretically Hydrostor could handle multi-day storage.

Standard lithium-ion batteries have shown that they can be economical in the eight-hour range too, though. Back in 2020, a coalition of community choice aggregators in California requested bids for long-duration storage projects with at least eight hours of capacity. While Hydrostor and numerous other startups threw their hats in the ring, the coalition ultimately selected a standard lithium-ion battery project for development.

While this could be viewed as a hit to more nascent technologies, Hydrostor said the process ultimately led to the company’s 25-year, 200 megawatt offtake contract with Central Coast Community Energy, which will purchase power from the company’s 500 megawatt project in California’s Central Valley, set to come online in 2030. But that long lead time could be one of the main reasons why Hydrostor didn’t win the coalition’s bid in the first place.

“When you consider the very pertinent needs for energy storage systems today in California and yesterday, a technology that is not due to come online for another six years – I don’t think you’re even yet at the cost comparison conversation,” Goldie-Scot told me, in reference to Hydrostor’s timeline. “It’s just, how soon can some of these companies deliver a project?” Generate recently acquired esVolta, a prominent developer of lithium-ion battery storage projects.

But ultimately, Norman says he doesn’t really view Hydrostor as in competition with lithium-ion. “We would even add [traditional] batteries to our system if we wanted to provide really fast response times,” he told me. He says the use cases are just different, and that he has faith that compressed air storage will eventually prove to be the superior option for grid-scale, long-duration applications.

A battery that stores kinetic energy in heavy blocks

Another company taking inspiration from pumped storage hydropower is Energy Vault. Founded in 2017, the Swiss company is pursuing a “gravity-based” system that can store up to 24 hours of energy. While the design of its system has shifted over the years, the basic concept has remained the same: Using excess grid energy to lift heavy blocks (initially via cranes, now via specialized elevators), and then lowering those blocks to spin a turbine when there’s energy demand.

The company raised $110 million from Softbank Vision Fund in 2019, but failed to find an immediate market for its tech. “When we founded the company, we started thinking long-duration was going to be required much more quickly, and hence the focus on gravity,” Rob Piconi, Energy Vault’s CEO, told me.

But instead of waiting around for the long-duration market to boom, the company went public via SPAC in early 2022 and reinvented itself. Now it makes much of its revenue selling the sort of traditional lithium-ion energy storage systems that it once sought to replace, and has made moves into the green hydrogen space, too.

“The near term difficulty for many of these long-duration storage companies is that we’re still relatively early on in the scaling of lithium-ion,” Goldie-Scot, told me, noting that prices for Chinese-made batteries have plunged in the past year. Generate usually only invests in tech that’s well-proven and ready to scale up. So while lithium-ion alternatives will look more and more attractive as the world moves toward full decarbonization, in the interim, “there’s a gap between that longer term need and where the market is today.”

Piconi agrees. “If you look at storage deployments 95% to 98% of them are all this shorter duration type of storage right now, because that’s where the market is,” he said, though he added that he’s seeing demand pick up, especially in places like California that are investing heavily in storage.

All that’s to say the company hasn’t given up on its foundational concept — its first commercial-scale gravity energy storage system was recently connected to the grid in China, and the company has broken ground on a second facility in the country as well. These facilities provide four hours of energy storage duration, which lithium-ion batteries can also easily achieve — but the selling point, Piconi says, is that unlike lithium-ion, gravity storage systems don’t catch fire, rely on critical minerals, or degrade over time. And once the market demands it, Energy Vault can provide power for much longer.

Still, the upfront costs of Energy Vault’s system can be daunting for risk-averse utilities. So in an effort to lower prices, the company recently unveiled a series of new gravity storage prototypes that leverage either existing slopes or multi-purpose skyscrapers. They were designed in partnership with the architecture and engineering firm Skidmore, Owings & Merrill, the company behind the world’s tallest building.

The market may not have been ready five years ago, Piconi told me. But “in 12 to 24 months, we’re going to start to see gravity pop up,” he projected.

A battery that stores thermal energy in ice

But wait, there’s more. Perhaps one of the best use cases for lithium-ion alternatives is in onsite, direct heating and cooling applications. That’s what the Israeli company Nostromo Energy is focused on, aiming to provide cleaner, cheaper air conditioning for large buildings like offices, school campuses, hotels, and data centers.

The company uses off-peak or surplus renewable energy to freeze water, storing it for later use in modular cells. Then, as temperatures rise and air conditioning turns on, that frozen water will cool down the building without the need for energy-intensive chillers, which commercial buildings normally rely upon. The system can be configured to discharge energy for two-and-a-half all the way up to 10 hours.

“Because air conditioning is roughly half of the electricity consumption of a building, we can provide that half from stored energy. And that’s overall a huge relief on the grid,” Nostromo’s CEO Yoram Ashery told me.

While a lot of (my) attention has been focused on how thermal batteries can help decarbonize heat-intensive industrial processes, and much has been written about the benefits of electric heat pumps over gas-powered heating, cooling is sometimes overlooked. That’s at least partially because air conditioning is already electrified.

But as more of our vehicles, appliances, and systems go electric, strain on the grid is poised to increase, especially during times of peak energy demand in the late afternoon and evening as people return home from the office before the sun goes down. Nostromo’s system can help shift that load by charging either midday (when solar is abundant) or at night (when wind is peaking), and discharging as demand for AC ramps throughout the afternoon.

Goldie-Scot said thermal storage technologies like this “offer something that some of the other technologies that are purely power-focused cannot. But they are still competing against relatively cheap natural gas.”

The upfront cost of the system, $2 to $3 million, is also nothing to sneeze at. But Ashery says it will fully pay for itself after just five years, as building owners stand to see significant savings on their electricity bills by shifting their demand to off-peak hours.

While one could theoretically power a building’s AC system using large lithium-ion-batteries, “it’s a problem to put big lithium batteries inside buildings,” Ashery told me. That’s due to the fire risk, which could impact insurance premiums for businesses, as well as space issues — these batteries would need to be container-sized to run an HVAC system. “That’s why only 1% of energy storage currently goes into commercial/industrial buildings,” Ashery wrote in a follow up email.

Shang told me that he sees so-called “behind the meter” applications like this as promising early markets for long-duration storage tech, especially given that utilities are “pretty cautious to adopt these technologies on a large scale.” But ultimately, he believes that policy is what’s really going to jumpstart this market.

“For long-duration storage, it may look years ahead, but actually the future is now,” he said. Because some of these new systems take longer to design and build, Shang told me, “you have to invest now. For the policies, you have to be ready now to support the development of these [long-duration energy storage] technologies.”

The Biden administration is certainly trying. All energy storage tech — thermal, compressed air, gravity, and lithium-ion — stands to benefit from generous IRA tax credits, which will cover 30% of a project’s cost, assuming it meets certain labor standards. Additional savings can accrue if a project meets domestic content requirements or is sited in a qualifying “energy community,” such as a low-income area that derives significant revenue from fossil fuel production.

The Department of Energy’s ultimate goal is to reduce the cost of grid-scale long-duration energy storage by 90% this decade (with “long” defined as 10-plus hours). And last year, the DOE announced $325 million in funding for 15 long-duration demonstration projects.

So while the market might not be quite ripe yet for funky, alternative approaches to long-duration storage, support like this is going to be necessary to ensure that these technologies are proven, cost-effective and available as the grid decarbonizes and the need crystallizes.

“There is not currently a system-wide way of valuing long-duration energy storage while competing against gas, but there are customers and utilities that have shown a willingness, especially with federal and state support, to invest in these technologies,” Goldie-Scot said. “That I think is giving us the first real inkling of the role that the long-duration can play in this market.”