Why Big Tech could give long duration storage the boost it needs

• Government efforts to provide frameworks for investment in long duration energy storage (LDES) are very slow-moving
• Now Big Tech is taking matters into its own hands as it aims to speed up LDES deployment
• Last week Google took its ‘first step’ into the LDES sector by investing in Italian CO2 battery company Energy Dome
• But this is just the start with the tech giant planning further investments in both mature and early stage LDES technologies

Getting long-duration energy storage (LDES) projects off the ground has been challenging. As the Long Duration Storage Council has highlighted, one of the key hurdles has been the absence of “clear, actionable targets” for LDES – such targets, the council says, would provide “clarity, direction and accountability” for investors. Government bodies are attempting to take steps to provide this clarity – if we take the UK as an example, energy regulator Ofgem, in an effort to instil confidence in investors when it comes to LDES, has announced a ‘cap and floor’ scheme. As Ofgem put it, the scheme “provides a minimum revenue floor for LDES operators to manage high capital costs and long build times, while the revenue cap lowers costs for consumers”.

But the implementation of such schemes can take an inordinate amount of time. For example, it is likely to be at least another 12 months before construction of new LDES projects benefitting from the UK’s ‘cap and floor’ scheme begins. However, large corporations’ need for LDES is becoming increasingly urgent and some are not prepared to wait extended periods for governments to implement policy and financing frameworks. For example, many Big Tech companies are on a mission to reduce the energy consumption of data centres, especially as statistics show that the data centre industry will consume more energy than some countries this year (see image below). Big Tech companies are coming under increasing pressure to minimise their energy use, with many admitting that their drives to deploy AI will jeopardise their own in-house net zero targets.

Source: theguardian.com/Alex de Vries

Big tech wants to scale long duration storage fast

Consequently, such companies are likely to turn to LDES as a solution to their energy-related challenges, and the indications are that they are willing to invest heavily in LDES companies in order to ensure such technology is commercialised as quickly as possible. Major tech companies have previously demonstrated they are favourably disposed towards energy storage and have used lithium-ion batteries – coupled with solar generation, for example – to power data centres. But such batteries typically dispatch power for four hours or less, and tech companies know that this is a technology that could be significantly improved upon – they see the solution as LDES. The tech industry’s belief is that shorter duration storage is sub-optimal and that, in the US for example, hundreds of millions of dollars could be saved by using LDES to reduce curtailment, lower energy wholesale prices, and defer expensive grid investments. What Big Tech wants is to scale LDES fast.

As a result, major tech companies will increasingly take the scaling up of LDES deployment into their own hands. Witness last week’s announcement from Google that it will be partnering with Italian LDES company Energy Dome, which has developed a CO2 Battery that can store clean energy and then dispatch it back to the grid for a period of eight to 24 hours. It represents Google’s first step into the LDES sector. Google said that the commercial partnership also includes an investment in Energy Dome that will “support multiple commercial projects globally to deploy their LDES technology”.

Google believes repeated deployment will bring LDES costs down

What made Google decide to back Energy Dome was its belief that the company has developed a system – which works by compressing carbon dioxide held in a dome-shaped battery – that can be scaled faster than competing LDES technologies. Google is pumping investment into Energy Dome because it feels public investments are insufficient to drive the commercialisation and deployment of LDES at the speed and scale needed. Google is also confident that Energy Dome’s technology has the potential for major cost declines through repeated deployment and therefore believes its investment will ultimately make it a more financially viable form of LDES in time. Google’s wish is to scale the technology globally in order to maximise economies of scale by deploying the projects across multiple regions.

The good news for other LDES companies is that Energy Dome is not expected to be Google’s last investment in this space. The tech giant is betting big on LDES and is lining up investments in both mature technologies and earlier-stage development. The global race to deploy LDES is underway and Big Tech will be at the forefront.