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In an interview with Zawya Projects, Alessandro Zampieri, Partner and Associate Director, Decarbonisation Solutions, BCG and Peter Ondko, Associate Director, BCG explained on how Long-Duration Energy Storage (LDES) could help GCC countries unlock the full potential of intermittent renewable energy. The rise in renewable energy adoption worldwide has increased the need for long-duration energy storage (LDES) solutions to deal with the growing challenge of intermittency. “While renewables account for nearly a third of global electricity generation, their intermittency poses challenges for grid stability,“ noted Alessandro Zampieri, Partner and Associate Director, Decarbonisation Solutions, BCG. He told Zawya Projects that as renewable energy penetration increases, storage durations of 1-8 hours will no longer suffice to address power grid intermittencies. “Longer storage solutions, including multi-day and eventually seasonal durations, will become essential,” he said. Peter Ondko, Associate Director, BCG added that LDES offers the ability to store energy for 8+ hours, facilitating renewable integration by smoothing out supply-demand imbalances, including over longer durations. The LDES Council’s 2024 Annual Report notes that LDES can deliver $540 billion in annual system savings globally by avoiding curtailments, enabling grid flexibility, and reducing dependence on fossil fuels. According to Ondko, thermal LDES can store heat at extremely high temperatures, ranging from 500 to over 1,000°C, making it a valuable tool for industrial decarbonisation. “When combined with renewable energy, it can provide the flexibility needed to integrate and optimise energy use across multiple sectors, facilitating sector coupling and advancing decarbonisation efforts,“ he observed. Zampieri emphasised that in the GCC, LDES is critical for meeting decarbonisation goals. “These technologies enable stages of deeper energy transition by ensuring that renewables can provide firm capacity without costly grid upgrades,“ he said, adding that early investment in LDES could help position the GCC as a leader in innovation and climate action. Excerpts from the interview: At what renewable energy penetration levels are LDES technologies expected to become essential in the GCC, and why? Alessandro Zampieri: This depends on the unique characteristics of individual power systems, such as the capacity and flexibility of the transmission grid. However, in general, it is expected that the need for LDES technologies becomes significant as renewable energy penetration exceeds 50-60 percent of a region’s energy mix. At this point, balancing supply and demand becomes more challenging due to the inherent intermittency of renewable energy, creating an even greater need for multiday storage solutions. This milestone is particularly relevant for the GCC, which is pursuing aggressive decarbonisation goals. Without robust storage solutions, grid instability and energy curtailment risks could complicate these ambitions. According to the LDES Council, countries with high climate goals, such as the US and the UK, are already prioritising LDES integration, setting a benchmark for the GCC to follow. For example, Californias Energy Commission is investing up to $330 million through its Long Duration Energy Storage programme to demonstrate non-lithium-ion technologies and deploy long-duration systems across the state. What are the long-term economic and strategic advantages for the GCC in investing in LDES technologies? Peter Ondko: For the GCC, the benefits of investing in LDES extend far beyond energy storage as they can help the region meet its sustainability commitments while generating significant economic value. Economically, integrating LDES can free up oil and gas for exports, driving higher GDP contributions while reducing the overall decarbonisation cost by mitigating the need for expensive grid infrastructure upgrades. Strategically, early investment allows the GCC to control the supply chain, develop local manufacturing capabilities, and create new revenue streams. Understanding the priority applications for the GCC is essential to making informed investment decisions. Given the early stages of development and the limited maturity of most LDES solutions, technological uncertainty remains high. Adopting a portfolio approach to investments is crucial for mitigating risks and achieving success. Developing a thorough understanding of the various technologies and their ability to either complement or offer distinct advantages over more established solutions like lithium-ion batteries (rather than competing with them directly) will be critical in identifying the right opportunities. In what ways can LDES technologies support industries reliant on heat energy, such as refineries and cement manufacturing? Peter Ondko: LDES technologies, particularly thermal storage systems, offer transformative potential for industries dependent on heat energy. Capable of delivering low, medium and high-grade heat, LDES solutions can significantly reduce these industries’ reliance on fossil fuels. When combined with renewable energy generation, they offer a cost-effective and reliable way to deliver 24/7 renewable heat to end-users. In the GCC, where cement manufacturing and refineries play pivotal roles, coupling renewables with thermal LDES can not only cut emissions by reducing dependency on natural gas, but also make operations more economical. This integration exemplifies how energy storage can extend beyond grid applications to revolutionise industrial processes, creating broader environmental benefits. Additionally, thermal storage offers utilities and independent power producers (IPPs) a valuable opportunity to diversify revenue streams by providing renewable heat as a service, supporting industrial customers in their efforts to decarbonise their operations. What challenges does the GCC face in integrating LDES technologies into its energy systems? Alessandro Zampieri: The GCC’s adoption of LDES is still in its early phases and the region currently faces several barriers to the integration of such technologies. Although the region has made notable progress in embracing renewable energy, comprehensive planning for LDES deployment is still underdeveloped. At present, LDES are not prominently featured in many energy planners’ portfolios, and strategic long-term initiatives for these technologies are just beginning to take shape. Furthermore, the absence of clear regulatory frameworks for energy storage systems, combined with no market power prices in single-buyer utility models and the resulting lack of price signals for storage, creates uncertainty and deters investment. Additionally (and not limited to GCC region), the continued decline in lithium-ion battery costs poses a challenge for many emerging LDES technologies, particularly those targeting similar intraday storage durations. Competing directly with the scale, maturity, and established supply chain of lithium-ion batteries can make it difficult for LDES technologies to demonstrate a clear economic advantage. As a result, many LDES projects still require government support to bridge these gaps and achieve scalability. What are the various procurement models that can encourage LDES adoption in the GCC? Peter Ondko: Innovative procurement models are key to driving LDES adoption in the GCC. Renewables-plus-storage tenders, such as Germany’s annual “innovation tenders,” have successfully encouraged integrated solutions. Similarly, centralised mandates for LDES capacity, complemented by subsidies for first-of-a-kind projects, could catalyse investment. Aligning bid selection criteria to reflect the value of stacked services offered by LDES can further incentivise adoption. However, there is still a need for rigorous testing and validation of LDES technologies in the local context to ensure they meet specific regional requirements. Early deployment should focus on scaling the technology, validating its performance, and preparing for commercial applications. And LDES should be incentivised or properly remunerated when required to complement lithium-ion batteries to meet grid flexibility needs. These measures, combined with government-backed frameworks for public-private partnerships, can address challenges and maximise the adoption and effectiveness of energy storage technologies in the GCC. |
