Economies of scale for Long-Duration Energy Storage (LDES) deployment can be achieved through a combination of strategic phases, market support mechanisms, and coordinated infrastructure development:
Key Approaches to Achieve Economies of Scale in LDES Deployment
1. Phased Deployment Strategy
- Demonstration Phase (2023–2025): Deploy numerous small-scale demonstration projects to create commercial-scale case studies, helping to build market visibility and confidence in technologies.
- Scaling & Selection Phase (2025–2028): Identify which LDES technologies benefit most from scaling and develop supply chains for utility-scale deployment, fostering technology maturation and cost reductions.
- Deployment Phase (2028–2030+): Implement large-scale projects to validate technology viability and reduce reliance on subsidies, enabling bankable, standalone use cases.
2. Stable and Predictable Market Compensation
- Implementing resource adequacy compensation (around $50–75 per kW per year by 2030) can improve the business case for investment, providing revenue certainty crucial to attracting capital and encouraging large-scale projects.
- Market structures need to fully recognize the dual value of LDES in generation and transmission, including dynamic capacity markets and differentiated capacity products.
3. Supportive Funding and Grants
- Historical evidence shows that funds and grants enhance economies of scale by providing financial certainty and accelerating deployment, particularly in the early stages of emerging infrastructure development.
4. Infrastructure and Supply Chain Development
- Building infrastructure that supports more interconnections and interoperability between different systems and regions can lower costs and accelerate deployment.
- Establishing international partnerships can broaden markets and share best practices, further expanding economies of scale.
5. Policy and Market Interventions
- Coordinated interventions at state, regional, and national levels can ensure LDES is properly valued for its grid benefits, such as capacity, reliability, and infrastructure utilization. This includes policies encouraging the integration of storage into energy markets and transmission planning.
6. Leveraging Competitive Advantage and Geographic Diversity
- Deploying storage technologies across various geographies and climates helps optimize scale and market penetration, leveraging competitive advantages in different regions.
By progressing through these phases, securing predictable revenue streams, fostering supply chains and infrastructure, and implementing supportive policies, economies of scale for LDES deployment can be realized, facilitating cost reductions and widespread commercial adoption.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-can-economies-of-scale-be-achieved-for-ldes-deployment/
