New ESS Technology Exploration：DOE Announces $100 Million Investment in Non-Lithium Long-Duration Energy Storage Projects

At the beginning of July, by following the guidance of Bipartisan Infrastructure Law, the Office of Clean Energy Demonstration (OCED) under the U.S. Department of Energy (DOE) announced a new bid & investing plan, which will offer up to 100 million US dollars for pilot-scale long-duration energy storage (LDES) projects utilising non-lithium technologies.

This plan aims to explore more innovative long-duration energy storage technologies beyond the mature ESS technologies such as lithium-ion batteries or pumped hydro. Based on the documentation requirements, the types of projects that OCED may consider include:

1. Electrochemical solutions, including flow and non-flow batteries.
2. Mechanical solutions, including both pressure and gravity based.
3. Thermal solutions, including sensible, latent and thermochemical heat storage mechanisms configured for electrical-to-electrical, electrical-to-thermal, and thermal-to-thermal input-output configurations.

In terms of project commercialization, the projects need to demonstrate their reliability and repeatability, and make clear demonstrations of the cost reduction and route after scale-up based on data. At the same time, the possible deployment in the future should focus on its commercial feasibility and supply chain reliability. OCED also raised red flags for non-lithium projects that have commercially deployed more than 100MWh, as they no longer need DOE investment.

OCED will fund 3 to 15 projects, each providing between US$5 million and US$20 million. The total funding size will not exceed US$100 million. Social investment should account for at least half of the total investment in every program. OCED project selection will be through a competitive bidding process, which is expected to start in late summer or early autumn. The main applicant must be a team including the LDES technology provider, and other investors are encouraged to participate.

SMM believes that with the current lithium prices, which will remain low for some time, battery energy storage systems (BESS) based on lithium-ion batteries can meet the needs of long-term energy storage in terms of cost. From a market perspective, due to the continuous maturity of technology and the oversupply of energy storage batteries from China, BESS prices have room to fall further. In addition, if batteries of the same size are designed with a longer discharge time, the reduced inverter capacity requirements can further reduce the unit capacity cost of the energy storage system. With the combination of these factors, related companies and capital investors are reluctant to invest in new non-lithium long-duration energy storage systems in the short term. It is significant for the government to lead some pilot investments during this time.

Author: Yaoning Liu | Analyst Associate, Lithium Battery | London Office, Shanghai Metals Market

Email: edenliu@smm.cn