Sustainability Atlas
Clean Energy·14 min read··...

Case study: Long-duration energy storage (LDES) — a startup-to-enterprise scale story

A concrete implementation with numbers, lessons learned, and what to copy/avoid. Focus on duration, degradation, revenue stacking, and grid integration.

In 2024, the global long-duration energy storage market reached $4.84 billion with a projected compound annual growth rate of 13.6%, yet the LDES Council warns that deployment must accelerate 50 times faster to meet net-zero targets by 2040 (MarketsandMarkets, 2025). The United States alone deployed over 12.3 GW of energy storage capacity in 2024, representing a 33% increase over the previous year, with Form Energy breaking ground on what will become the world's largest battery facility—an 85 MW/8,500 MWh iron-air system in Maine (U.S. DOE, 2024). This case study examines how LDES technologies have scaled from venture-backed startups to utility-scale deployments, revealing critical lessons for project developers, investors, and policymakers navigating the clean energy transition.

Why It Matters

The intermittency challenge of renewable energy sources presents an existential barrier to decarbonization. While lithium-ion batteries excel at short-duration applications of two to four hours, they become economically prohibitive for the eight to one hundred-hour storage durations required to stabilize grids with high renewable penetration. According to McKinsey's net-zero power analysis, renewable energy grids require 85 to 140 terawatt-hours of long-duration storage by 2040 to achieve full decarbonization—a scale that necessitates approximately 8 TW of installed LDES capacity (McKinsey, 2024).

Current projections reveal a troubling gap. As of 2024, the world has deployed approximately 2.4 GW of non-pumped hydro LDES technologies, with projections showing only 18.5 GW by 2030 and 222 GW by 2035. This trajectory falls dramatically short of the 1.5 TW required by 2030 for net-zero alignment. The LDES Council estimates that closing this gap would require $4 trillion in cumulative investment by 2040 but would generate $540 billion in annual system savings through reduced curtailment, avoided transmission buildout, and displaced peaker plant capacity (LDES Council, 2024).

For utilities struggling with rising interconnection queue delays—now averaging four to five years in the United States—and transmission constraints that strand renewable generation, LDES offers a pathway to maximize existing infrastructure while deferring capital-intensive grid upgrades. The technology directly addresses demand charge management, capacity market participation, and the emerging 24/7 clean energy procurement requirements from hyperscale data centers operated by Amazon, Microsoft, and Google.

Key Concepts

Understanding LDES requires familiarity with several foundational concepts that distinguish it from conventional battery storage.

Duration categories define LDES as storage systems capable of discharging at rated power for eight hours or longer. The U.S. Department of Energy's Long Duration Storage Shot initiative specifically targets systems with 10 to 100+ hours of capacity, recognizing that multi-day storage becomes essential when renewable penetration exceeds 80% of grid supply.

Technology pathways span four primary categories: mechanical systems (pumped hydro, compressed air, gravity), electrochemical systems (flow batteries, metal-air batteries), thermal systems (molten salt, hot rock, cryogenic), and chemical systems (hydrogen, ammonia). Each pathway presents distinct trade-offs between capital cost, round-trip efficiency, geographic constraints, and degradation characteristics.

Levelized cost of storage (LCOS) serves as the primary economic benchmark, measuring total lifecycle costs divided by energy throughput. The DOE's 2024 LDES viability survey established targets of $20/kWh for energy capacity costs—a threshold that iron-air and flow battery technologies are approaching at scale (DOE, 2024).

Revenue stacking describes the practice of aggregating multiple value streams from a single storage asset. LDES projects typically combine energy arbitrage, capacity market revenues, ancillary services (frequency regulation, spinning reserves), transmission and distribution deferral payments, and resource adequacy credits to achieve bankable project economics.

Degradation profiles differ markedly from lithium-ion chemistry. Iron-air and flow battery systems demonstrate minimal capacity fade over 20 to 25-year operational lifetimes, with some manufacturers guaranteeing zero degradation through electrolyte replacement and maintenance protocols.

What's Working

Mechanical and Gravity Storage at Commercial Scale

Energy Vault's EVx gravity storage system achieved a major milestone in May 2024 with the commissioning of its first commercial-scale 25 MW/100 MWh facility in Rudong, Jiangsu Province, China. The system lifts and lowers 35-ton composite blocks to store and release energy, achieving greater than 80% round-trip efficiency with a 35-year operational lifespan and zero capacity degradation (Energy Vault, 2024). The company has since broken ground on three additional projects totaling 468 MWh across China and announced a partnership with Enel Green Power for an 18 MW/36 MWh facility in Texas—the first large-scale gravity storage system in a Western country.

Iron-Air Battery Breakthrough

Form Energy's iron-air technology has emerged as the frontrunner in multi-day storage, with costs approaching $20/kWh—approximately one-tenth the cost of lithium-ion at equivalent duration. In August 2024, the company broke ground on its first commercial deployment: a 1.5 MW/150 MWh system with Great River Energy in Cambridge, Minnesota, designed to operate for 100 continuous hours (Form Energy, 2024). The project benefits from Form Factory 1 in Weirton, West Virginia, where the company has scaled manufacturing capacity to 500,000 square feet with plans for 850,000 square feet by late 2025. In December 2024, Form Energy's batteries passed UL9540A safety testing with zero thermal runaway risk, addressing a critical bankability concern for utility offtakers.

Flow Battery Deployments

ESS Inc. has secured deployments across multiple utility partners, including a 5 MW/50 MWh pilot with Salt River Project in Arizona (announced October 2025), a 3.6 MW system with Sacramento Municipal Utility District funded by a $10 million California Energy Commission grant, and commercial Energy Center units with Tampa Electric and Portland General Electric. The company's iron flow battery chemistry uses earth-abundant materials—iron, salt, and water—enabling 25-year lifespans with flexible 8 to 12-hour discharge durations (ESS Inc., 2024).

What's Not Working

Project Financing Challenges

Despite technological progress, LDES projects face persistent financing barriers. Traditional project finance models built around lithium-ion's four-hour duration and well-characterized degradation curves struggle to underwrite 100-hour iron-air or 10-hour flow battery systems. Lenders require extensive performance guarantees, independent engineering assessments, and insurance products that remain nascent for newer technologies. ESS Inc.'s 2024 financial struggles—with Q2 2024 revenues of just $300,000 despite contracted backlogs—illustrate the "valley of death" between technology validation and commercial-scale deployment.

Revenue Certainty Gaps

Current wholesale market structures inadequately compensate LDES for its full value stack. Capacity markets in most ISO regions pay identical rates for four-hour and 100-hour resources, despite the latter providing far greater reliability value during extended weather events. California's Independent System Operator has begun differentiating payment tiers for 8+ hour resources, but similar reforms remain pending in ERCOT, PJM, and other major markets.

Interconnection Queue Delays

The U.S. interconnection queue contained over 2,600 GW of proposed projects in 2024, with average wait times of 4.5 years. LDES projects face additional challenges because many grid operators lack established modeling protocols for multi-day storage, creating uncertainty in interconnection studies and potential restudies as queue positions shift.

Manufacturing Scale-Up

While iron-air and flow battery technologies have proven technical viability, manufacturing capacity remains constrained. Form Energy's Weirton facility represents the largest dedicated iron-air production line globally, yet its targeted annual capacity of 500 MW/50 GWh by 2028 represents a fraction of the 3 GW annual deployment needed by 2030 to meet climate targets.

Key Players

Established Leaders

Form Energy (Somerville, MA): Iron-air battery pioneer with $850+ million in venture funding, 500,000 sq ft manufacturing facility, and contracted projects with Xcel Energy (10 MW), Georgia Power (15 MW), and the 85 MW Maine mega-project. October 2024 Series F of $405 million included T. Rowe Price and GE Vernova.

Energy Vault (Lugano, Switzerland): Gravity storage technology developer with EVx systems deployed in China (3.7+ GWh pipeline) and Texas. Listed on NYSE (NRGV). Named TIME Best Invention 2024 in Green Energy category.

ESS Inc. (Wilsonville, OR): Iron flow battery manufacturer with deployments across Arizona, California, Australia, and Netherlands. Export-Import Bank financing of up to $50 million secured in 2024. Greater than 90% domestic U.S. content enables IRA tax credit qualification.

Emerging Startups

Ambri (Marlborough, MA): Liquid metal battery technology using calcium and antimony chemistry, targeting industrial and utility applications with 20+ year lifespans.

Malta Inc. (Cambridge, MA): Pumped thermal electricity storage (PTES) using molten salt, spun out from Alphabet's X moonshot lab.

Noon Energy (Alameda, CA): Carbon-oxygen battery technology pursuing 100+ hour duration at sub-$10/kWh costs.

Key Investors and Funders

Breakthrough Energy Ventures (Kirkland, WA): Bill Gates-backed climate fund with investments in Form Energy, Malta, and other LDES ventures.

U.S. Department of Energy: $349+ million committed to LDES demonstrations through OCED and ARPA-E programs, including $147 million GRIP grant to Form Energy's Maine project.

California Energy Commission: $380 million Long Duration Energy Storage Program funding LDES pilots with SMUD, Pacific Gas & Electric, and other state utilities.

Sector-Specific KPI Table

MetricIron-AirFlow BatteryGravity StorageBenchmark Target
Duration (hours)100+8-124-18>8 for LDES classification
Capital Cost ($/kWh)~$20$150-300$150-200<$50 by 2030
Round-Trip Efficiency45-50%70-80%>80%>70% preferred
Cycle Life10,000+20,000+Unlimited>5,000 for bankability
Degradation (%/year)<0.5%~0%0%<2% required
Footprint (sq ft/MWh)~2,000~1,500~5,000Site-specific
Lifespan (years)20-252535>15 for project finance

Examples

1. Form Energy and Great River Energy (Minnesota)

Great River Energy, a wholesale power cooperative serving 28 member cooperatives across Minnesota, partnered with Form Energy on a 1.5 MW/150 MWh iron-air battery pilot in Cambridge, Minnesota. Breaking ground in August 2024, the project will demonstrate 100-hour continuous discharge capability—sufficient to power through multi-day polar vortex events that stressed Midwestern grids during Winter Storm Uri. The deployment benefits from $147 million in DOE GRIP funding committed to Form Energy's broader New England initiatives. Great River Energy views the pilot as foundational for up to 710 MW of additional solar capacity that LDES will help integrate by eliminating curtailment during low-demand periods.

2. Energy Vault and Enel Green Power (Texas)

In May 2024, Enel Green Power announced a partnership with Energy Vault to develop an 18 MW/36 MWh gravity storage facility in Texas—the first commercial-scale gravity storage project in the Western Hemisphere. The project leverages Energy Vault's EVx technology, which achieved commercial validation at the 25 MW/100 MWh Rudong facility in China earlier that year. The Texas deployment targets ERCOT's capacity-constrained market, where extreme weather events have caused widespread outages, including the February 2021 crisis that left 4.5 million customers without power. Energy Vault's composite blocks can incorporate recycled materials including decommissioned wind turbine blades, addressing emerging circular economy requirements.

3. ESS Inc. and Salt River Project (Arizona)

Salt River Project, one of Arizona's largest utilities serving over one million customers, selected ESS Inc. in October 2025 for a 5 MW/50 MWh iron flow battery pilot at its Copper Crossing Energy and Research Center. The 10-hour discharge system will support SRP's integration of 2,000+ MW of contracted solar capacity while demonstrating non-lithium LDES performance in extreme desert heat conditions. Google is co-funding the pilot as part of its 24/7 carbon-free energy initiative, with EPRI providing independent performance monitoring. Delivery is scheduled for December 2027, with ESS manufacturing batteries at its Wilsonville, Oregon facility using greater than 90% domestic content to qualify for IRA tax incentives.

Action Checklist

  • Conduct technology screening to match LDES chemistry (iron-air, flow, gravity, thermal) with site-specific requirements including duration needs, footprint constraints, and ambient temperature ranges
  • Engage interconnection consultants early to navigate queue position, study requirements, and potential re-studies given evolving grid operator protocols for multi-day storage
  • Model revenue stacks across wholesale energy arbitrage, capacity markets, ancillary services, and bilateral offtake agreements to identify bankable project structures
  • Evaluate IRA incentives including Investment Tax Credit (up to 50% with adders), domestic content bonuses, and energy community eligibility for brownfield redevelopments
  • Secure independent engineering reports and manufacturer performance guarantees to address lender due diligence requirements for emerging technologies
  • Develop procurement timelines accounting for 18-24 month manufacturing lead times at current LDES production capacity levels
  • Engage offtakers—utilities, corporate PPAs, or community choice aggregators—on 24/7 clean energy value propositions that differentiate LDES from short-duration batteries

FAQ

Q: How does LDES differ from lithium-ion batteries for grid applications?

A: LDES systems are designed for eight to one hundred hours of continuous discharge, compared to lithium-ion's typical two to four-hour duration. This extended duration enables LDES to address multi-day weather events (polar vortices, wind droughts, cloudy weeks), provide seasonal load balancing, and defer transmission infrastructure investments. LDES technologies including iron-air and flow batteries also avoid critical mineral supply chain risks associated with lithium, cobalt, and nickel, using abundant materials like iron, salt, and water. However, LDES systems typically have lower round-trip efficiency (45-80% versus 85-95% for lithium-ion) and are less suited for short-duration applications requiring rapid charge/discharge cycles.

Q: What revenue streams support LDES project economics?

A: Successful LDES projects stack multiple value streams: (1) energy arbitrage purchasing low-cost renewable generation during peak production and selling during high-price periods; (2) capacity market revenues from resource adequacy contributions; (3) ancillary services including frequency regulation, spinning reserves, and black start capability; (4) transmission and distribution deferral payments where storage delays infrastructure upgrades; (5) bilateral offtake agreements with utilities or corporations pursuing 24/7 carbon-free energy; and (6) IRA tax incentives providing 30-50% investment tax credits. Projects in California, ERCOT, and ISO-New England currently offer the most favorable revenue stacking opportunities.

Q: What are the main barriers to scaling LDES deployment?

A: Three primary barriers constrain LDES growth. First, project financing remains challenging because lenders lack historical performance data to underwrite newer technologies, requiring extensive warranties, third-party engineering assessments, and insurance products still in development. Second, market structures inadequately compensate LDES value—capacity markets typically pay identical rates for four-hour and 100-hour resources despite vastly different reliability contributions. Third, manufacturing capacity is constrained: Form Energy's 500 MW annual production target represents a fraction of the 3 GW/year deployment needed by 2030, and supply chains for specialized components remain nascent.

Q: Which LDES technology is most commercially mature?

A: Pumped hydro storage remains the most mature LDES technology, representing approximately 95% of global installed storage capacity at over 170 GW. However, pumped hydro requires specific topography (elevation differentials, water access) that limits new project siting. Among emerging technologies, iron flow batteries (ESS Inc.) and gravity storage (Energy Vault) have reached commercial deployment with utility-scale operating projects. Iron-air batteries (Form Energy) achieved first commercial groundbreaking in August 2024 with systems expected online in late 2025. Flow batteries and gravity systems currently offer the clearest near-term pathways to multi-GW deployment.

Q: How do LDES projects qualify for IRA incentives?

A: LDES projects can qualify for Investment Tax Credits under IRA Section 48E, with base credits of 30% and potential adders reaching 50% or higher. Key qualification criteria include: domestic content requirements (greater than 40% U.S.-manufactured components for full bonus); prevailing wage and registered apprenticeship compliance; energy community siting on brownfields, former fossil fuel facilities, or high-unemployment areas; and low-income community benefits. Standalone storage became eligible under IRA starting January 2023, eliminating previous requirements for co-location with generation assets. Iron flow battery manufacturers like ESS Inc. specifically designed production for greater than 90% domestic content qualification.

Sources

Topics

longdurationPPAdemand chargescritical mineralsadditionalitybenchmark KPIs

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