Government tenders play a crucial role in the development of long-duration energy storage (LDES) by providing a framework for the industry to grow and innovate. Here are key ways government tenders contribute to LDES development:
Market Creation and Incentives
- Demand Generation: Government tenders help create demand for LDES by setting clear targets and requirements for storage capacity. This encourages companies to invest in developing LDES technologies.
- Risk Mitigation: By securing contracts through tenders, companies can better manage risks associated with long-term infrastructure investments.
Encouraging Innovation
- Technology Diversification: Tenders can specify a range of technologies (mechanical, thermal, chemical, electrochemical) to participate, promoting innovation across different LDES solutions.
- Competitive Bidding: The competitive nature of tenders drives companies to innovate more cost-efficient and effective storage solutions.
Securing Investment
- Investment Attraction: Successful tenders can attract investors by demonstrating the potential for significant returns on investment in LDES projects.
- Policy Support: Governments often accompany tenders with supportive policies and incentives, making the sector more attractive to investors.
Examples of Successful Tenders
- New South Wales, Australia: Nearly 14GWh of LDES projects were awarded in a recent tender, demonstrating the effectiveness of competitive bidding in securing large-scale energy storage commitments.
- California, USA: The state plans to solicit up to 2GW of LDES as part of a broader clean energy procurement strategy, showing how tenders are used to integrate LDES into broader energy transition plans.
In summary, government tenders are essential for driving the development of long-duration energy storage by creating demand, encouraging innovation, securing investment, and providing policy support.
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