In Episode 20 of Power Players by Origis®, host Christine Grey, Senior Director of Business Development for Origis Energy and Jordan Cole, Chief Commercial Officer at Hydrostor discuss developing the long duration storage market. 

MEET THE PLAYERS

Jordan Cole is Chief Commercial Officer at Hydrostor where he oversees the business development and project development aspects of the business. He is a senior professional with more than 20 years of experience in the energy and infrastructure space. Through his work at Hydrostor, Jordan has been directly involved with raising multiple rounds of financing, including sizeable contributions from Goldman Sachs Asset Management and the Canada Pension Plan.

As Senior Director of Business Development and Head of Energy Storage for Origis Energy, Christine Grey has diversified business development experience in the energy industry including wind, PV, energy storage, and oil and gas. She has more than 15 years of experience building new business operations, products, and services offering.

Defining Long Duration Storage and Importance

Grey and Cole began the conversation getting a clear definition around what makes a solution long duration storage. Cole broke the solutions into three basic categories:

• Intra-day storage – 8 hours

• Inter-day storage – 8-24 hours

• Weekly storage – 100 hours or more

Cole noted his company Hydrostor would fall into the “inter-day storage” solution. The length of storage will often dictate the type of technology best suited to the project.

Regardless of the type of storage, Cole said, “there was a DOE report that came out about a year ago. They were forecasting that 350 to 450 gigawatts of long duration energy storage would be needed on the system in the U.S. alone for the U.S. to achieve their goals. That would save 20 billion dollars of capital annually versus alternative solutions.”

Target Market Conditions for Potential Storage Development

Grey and Cole discussed markets where Hydrostor currently has projects in development, and aspects of those markets contributing to their attractiveness for long duration storage development. Cole noted there is government support for storage along with an understanding different technologies and solutions have different use cases. However, the overall market still needs to be structured for long duration.

“Storage targets are nice, but you can’t have a four-hour product competing against an eight-hour product,” said Cole. “An eight-hour product, as we know, is going to cost a little bit more. It offers incremental benefits. You can’t have an eight-hour product competing with a four-hour price point.

“With that said, there also needs to be a recognition that existing markets are broken. They have difficulty incentivizing any type of new build asset on the system, let alone long duration energy storage. So what you basically need is an outside contract mechanism, which is what we’ve tapped into to be successful in New South Wales, the Australian project, and California, with our Kern County project. That effectively provides us with the financeable cash flow stream to ultimately get these assets off the ground.”

As far as markets to watch, New York state is doing interesting things, according to Cole, “They have a six-gigawatt energy storage target. When they ran their math and analysis, they’re saying they need two gigawatts of long duration energy storage. And they have a mechanism, the index storage mechanism, that we think is an attractive one. So we do think that New York could make a lot of sense.”

Lithium-Ion vs. Other technologies

Since most of the storage solutions on the market in the United States currently are lithium-ion batteries, Grey and Cole discussed the giant of the market.

“Lithium is in quite a different bucket than the long-duration storage providers,” said Grey. “Mainly on chemistry, but also on duration. What are the differences that you see between the two technologies, and how would you compare them? But maybe it’s more so how wouldn’t you compare them. Are they apples and oranges and we should stop trying to.”

Cole says it all comes down to use case. “I view lithium-ion and our technology or other long duration technologies competing in completely different sandboxes. Lithium-ion solutions are really good from a short duration, quick responding, arbitrage generating perspective. Their RTs are really high. They’re also really good in behind the meter type situations.

“We’re a real capacity resource. We’re really good at replacing fossil [resources]. As you bring more renewables on the system, you’re going to need more resources like that to make sure that the system has integrity. I also think that we’re much better from a transmission deferral perspective or reliability perspective because you need more hours there to provide that benefit to the system.”

Conclusion

Grey and Cole agreed that long duration storage is important for the energy transition and will need both state and federal mandates and incentives to ensure the benefits of long duration storage are accurately reflected in any regulations.

“It’s setting the storage targets,” said Cole. “It’s acting quickly today, recognizing that you need this stuff on the system in the 2030 timeframe. It’s providing that financeable cash flow stream that’s going to be needed for any resource.”

During their conversation, Grey and Cole discussed the development of the long duration energy storage market.

Three key takeaways: 

1. Long duration storage is key to the energy transition.

1. Different storage solutions are necessary for a variety of use cases to meet energy transition goals.

1. The United States needs clear goals and incentives that are not technology specific for the industry to mature to meet the storage capacity needs of the future.

We’d like to thank our Power Players expert guest Jordan Cole and host Christine Grey for their insightful conversation.

Resources:

Department of Energy Report: Pathways to Commercial Liftoff: Long Duration Energy Storage

Utility Dive: New York PSC adopts energy storage road map detailing path to 6 GW by 2030