Data story: Key signals in Long-duration energy storage (LDES)

Global investment in long-duration energy storage (LDES) reached $6.2 billion in 2025, a 240% increase from 2022 levels, as grid operators, utilities, and governments recognized that batteries alone cannot solve the intermittency challenge beyond four hours. With over 45 GWh of LDES capacity now in various stages of deployment worldwide, the sector has moved from laboratory curiosity to infrastructure buildout. Yet the signals separating technologies that will scale from those that will stall are hiding in the data most observers overlook.

Quick Answer

The key quantitative signals in LDES fall into five categories: cost trajectory curves by technology type, deployment pipeline conversion rates, round-trip efficiency improvements, duration-to-cost ratios, and policy-driven procurement mandates. Technologies demonstrating learning rates above 15% per doubling of capacity, pipeline-to-commissioning conversion rates above 40%, and round-trip efficiencies approaching 70% are the ones attracting the bulk of commercial commitments. As of early 2026, iron-air, flow batteries, and compressed air energy storage lead on these metrics, while liquid air and gravity-based systems show slower progress on cost reduction curves.

Why It Matters

Electricity grids worldwide are adding renewable generation at record pace: over 500 GW of new solar and wind capacity was installed globally in 2025 alone. But renewables create a duration mismatch. Lithium-ion batteries economically serve the zero-to-four-hour storage window, covering daily peak shifting and frequency regulation. Beyond four hours, their costs scale linearly with duration, making eight-hour, twelve-hour, or multi-day storage economically prohibitive with current chemistries.

LDES technologies target storage durations from eight hours to multiple weeks. The US Department of Energy's Long Duration Storage Shot initiative set a target of $0.05/kWh for systems delivering 10+ hours. Achieving this target would unlock roughly 80-140 GW of LDES demand in the US alone by 2035, according to LDES Council projections. The market implications are substantial: McKinsey estimates the global LDES market could reach $1.5-3 trillion in cumulative investment by 2040.

Tracking the right signals now determines which technologies will capture that investment and which will remain stranded at pilot scale.

Signal 1: Cost Trajectory by Technology Type

The Data:

• Iron-air batteries: levelized cost of storage (LCOS) declined from $180/kWh in 2022 to $95/kWh in 2025, a 47% reduction
• Vanadium redox flow batteries: LCOS dropped from $320/kWh to $195/kWh over the same period, a 39% decline
• Compressed air energy storage (CAES): new adiabatic designs achieved $120/kWh LCOS in 2025, down from $175/kWh in 2022
• Zinc-based batteries: LCOS reached $140/kWh in 2025, from $210/kWh in 2023
• Gravity-based storage: costs remained relatively flat at $220-260/kWh with limited deployment data
• Liquid air energy storage (LAES): LCOS at $170/kWh, down modestly from $200/kWh in 2022

Why It Matters:

Cost trajectory reveals learning rate, which determines commercial viability at scale. Technologies with learning rates above 15% per capacity doubling are tracking toward DOE targets. Iron-air leads this race, driven by Form Energy's manufacturing scale-up and its use of abundant, low-cost iron materials. Flow batteries show strong improvement but face vanadium supply chain constraints that cap their cost floor. CAES benefits from proven subsurface engineering but requires specific geological formations, limiting geographic deployment.

Technology	2022 LCOS ($/kWh)	2025 LCOS ($/kWh)	Learning Rate	Target Duration
Iron-air	180	95	~18%	100+ hours
Flow (vanadium)	320	195	~14%	4-12 hours
CAES (adiabatic)	175	120	~16%	8-24 hours
Zinc-based	210	140	~15%	8-16 hours
Gravity-based	250	235	~5%	8-12 hours
Liquid air	200	170	~8%	4-12 hours

Real-World Example:

Form Energy announced its first commercial-scale iron-air battery system in Weirton, West Virginia, with construction beginning in 2024. The facility's battery systems target 100-hour duration at costs that would make multi-day storage economically viable for the first time. Georgia Power signed a contract for a 15 MW/1,500 MWh iron-air system, representing one of the largest duration-weighted storage contracts in US history. The project's pricing data, while not fully public, indicates LCOS below $100/kWh for 100-hour duration, a benchmark previously considered unreachable before 2030.

Signal 2: Pipeline Conversion Rates

The Data:

• Global announced LDES projects: 185 GWh of capacity as of Q4 2025
• Projects reaching final investment decision (FID): 38% of announced capacity
• Projects commissioned or under construction: 24% of announced capacity
• Average time from announcement to FID: 2.3 years for flow batteries, 3.1 years for CAES, 1.8 years for iron-air
• Project cancellation rate: 18% across all LDES technologies (compared to 8% for lithium-ion)

Why It Matters:

Pipeline conversion rate is the most reliable indicator of commercial readiness. Technologies with high announcement-to-FID conversion and short development timelines have de-risked their engineering, permitting, and financing processes. High cancellation rates signal unresolved technical or commercial challenges. Iron-air's 1.8-year average from announcement to FID reflects both simpler permitting (no geological requirements) and strong utility confidence in the technology path.

Real-World Example:

Hydrostor, a Canadian compressed air energy storage company, has maintained a pipeline of over 4 GW across multiple projects in California, Australia, and Canada. Their Willow Rock project in Kern County, California (500 MW/4,000 MWh) reached FID in 2024 after a 2.5-year development process. Their pipeline-to-FID conversion rate of 55% significantly exceeds the CAES sector average, driven by their proprietary adiabatic design that eliminates the need for natural gas fuel input. The project secured a long-term tolling agreement with a California utility, demonstrating bankable revenue structures.

Signal 3: Round-Trip Efficiency Trends

The Data:

• Flow batteries: round-trip efficiency improved from 65% to 72% between 2022 and 2025
• Iron-air: efficiency at 45% in early systems, with projected improvements to 55% by 2027
• CAES (adiabatic): achieved 68% round-trip efficiency, up from 60% in 2022
• Zinc-based: round-trip efficiency at 72%, up from 65% in 2023
• Gravity-based: theoretical 80-85%, demonstrated 75% in pilot deployments
• Liquid air: 55-60% round-trip efficiency, largely unchanged since 2022

Why It Matters:

Round-trip efficiency determines the energy cost premium of storage. At 70% efficiency, a storage system must charge with 1.43 kWh for every 1 kWh delivered. At 45% efficiency, that ratio climbs to 2.22 kWh. In grids where renewable curtailment provides near-zero marginal cost energy, low efficiency is acceptable. In grids where stored energy competes with wholesale market prices, efficiency gaps translate directly into revenue shortfalls.

The efficiency signal must be read in context: iron-air's 45% efficiency matters less when its duration advantage (100+ hours) and low capital cost create value in seasonal and multi-day applications where no alternative exists. Flow batteries' improving efficiency strengthens their position in the 4-12 hour medium-duration segment where they compete more directly with lithium-ion.

Signal 4: Policy and Procurement Mandates

The Data:

• California AB 1373 established a framework for multi-day reliability resources, with procurement targets expected by 2027
• US DOE allocated $505 million for LDES demonstration projects under the Bipartisan Infrastructure Law
• The EU's Net Zero Industry Act includes LDES among strategic net-zero technologies eligible for streamlined permitting
• Australia's Capacity Investment Scheme opened eligibility to LDES in 2025, with 2 GW of storage targets
• India's Energy Storage Obligation mandates 4% storage by 2030, including provisions for long-duration assets

Why It Matters:

Policy mandates create guaranteed demand floors that reduce investment risk. California's leadership is particularly significant: the state's grid modeling shows a need for 25-50 GW of clean firm capacity by 2045, much of which must come from LDES. Procurement mandates convert theoretical market projections into contractual revenue streams that unlock project finance.

Real-World Example:

The California Public Utilities Commission's 2024 Integrated Resource Plan modeling identified a need for 6,000 MW of long-duration and clean firm resources by 2035. Following this analysis, Southern California Edison issued an RFP specifically for storage systems with 8+ hour durations, receiving 42 proposals totaling over 15 GW. The procurement signal triggered a wave of development activity, with seven new LDES projects entering the California interconnection queue in Q1 2025 alone.

Signal 5: Duration-to-Cost Ratio Trends

The Data:

• Iron-air: marginal cost of additional duration approximately $2-5/kWh (energy capacity only)
• Flow batteries: marginal duration cost $20-40/kWh (driven by electrolyte costs)
• CAES: marginal duration cost $8-15/kWh (driven by cavern volume)
• Lithium-ion (baseline): marginal duration cost $120-180/kWh
• LDES Council target: below $20/kWh marginal duration cost for commercial viability

Why It Matters:

The duration-to-cost ratio is what fundamentally separates LDES from lithium-ion economics. Technologies where adding more hours of storage is cheap relative to base system cost have structural advantages in long-duration applications. Iron-air's extremely low marginal duration cost explains why it targets 100+ hour applications: the cost difference between 10 hours and 100 hours is minimal compared to technologies where each additional hour requires proportional capital investment.

What's Working

Convergence between technology maturation and policy support is driving measurable progress:

• Over 45 GWh of LDES capacity globally in deployment pipelines, up from 8 GWh in 2022
• Three LDES technologies have achieved LCOS below $150/kWh for 10+ hour applications
• US federal funding has de-risked first-of-a-kind projects, with 17 demonstration projects funded since 2022
• Utility procurement RFPs increasingly specify duration requirements of 8+ hours, creating dedicated demand
• Manufacturing capacity investments by Form Energy, ESS Inc., and others signal transition from bespoke to serial production

What's Not Working

Several challenges continue to constrain the sector:

• Bankability gaps: Lenders remain cautious on 20-year revenue projections for technologies with limited operational track records
• Interconnection delays: LDES projects face the same 4-5 year interconnection queues as other grid resources, eroding first-mover advantages
• Permitting complexity: CAES and hydrogen storage face geological assessment requirements that add 18-24 months to development timelines
• Round-trip efficiency penalties: Iron-air and liquid air systems lose significant energy in each cycle, limiting economic viability in high-price markets
• Supply chain immaturity: Vanadium, zinc, and specialty membrane supply chains lack the scale and diversification of lithium-ion supply networks

Key Players

Established Leaders

• Form Energy: Iron-air battery developer with a 750 MW manufacturing facility under construction in West Virginia and utility contracts across multiple US states.
• Hydrostor: Advanced compressed air energy storage developer with over 4 GW in pipeline across North America and Australia, backed by Goldman Sachs.
• ESS Inc.: Iron flow battery manufacturer with over 600 MWh shipped or contracted, targeting 4-12 hour commercial and industrial applications.
• Invinity Energy Systems: Vanadium flow battery manufacturer serving utility and C&I markets, with deployments across North America, Europe, and Asia-Pacific.

Emerging Startups

• Noon Energy: Carbon-oxygen battery technology targeting multi-day storage at sub-$10/kWh marginal duration cost.
• Antora Energy: Thermal energy storage using solid carbon blocks heated by renewable electricity, targeting industrial heat and power applications.
• Quidnet Energy: Geo-mechanical pumped storage using existing subsurface wells, achieving LDES at sites without traditional topographic requirements.
• EnerVenue: Nickel-hydrogen battery technology adapted from aerospace applications, targeting 8-12 hour duration with 30-year life cycles.

Key Investors and Funders

• Breakthrough Energy Ventures: Leading investor in LDES with positions in Form Energy, Antora Energy, and other frontier storage companies.
• US Department of Energy: Committed over $500 million to LDES demonstrations through the Long Duration Storage Shot and BIL programs.
• Goldman Sachs: Major backer of Hydrostor with direct equity investment supporting project development across multiple geographies.

Action Checklist

1. Map your grid's duration needs beyond four hours by analyzing renewable curtailment data, peak demand patterns, and reliability requirements
2. Track cost trajectory data for at least three LDES technology types and compare learning rates to DOE LCOS targets
3. Monitor pipeline conversion rates for LDES developers in your region as an indicator of permitting and financing maturity
4. Assess policy and procurement mandates in your jurisdiction and identify upcoming RFP opportunities for long-duration resources
5. Evaluate round-trip efficiency in context of your grid's energy cost profile to determine which efficiency thresholds matter for your use case
6. Engage with LDES developers early to secure position in manufacturing and deployment queues as capacity constraints emerge
7. Review interconnection queue data to understand realistic timelines for LDES project energization in your territory

FAQ

What distinguishes LDES from conventional battery storage? LDES refers to storage systems capable of delivering energy for eight hours or more, with some technologies targeting multi-day or seasonal durations. Conventional lithium-ion batteries are economically optimized for zero-to-four-hour applications. The key distinction is in the duration-to-cost ratio: LDES technologies decouple energy capacity cost from power capacity cost, making longer durations economically viable.

Which LDES technology is closest to commercial scale? Iron-air batteries (led by Form Energy) and advanced compressed air energy storage (led by Hydrostor) are furthest along in commercial deployment. Both have secured utility contracts, reached final investment decisions on large-scale projects, and are building manufacturing or project infrastructure. Flow batteries are commercially available but primarily serve the 4-12 hour segment rather than true long-duration applications.

How does LDES investment compare to lithium-ion? Lithium-ion battery investment reached approximately $50 billion globally in 2025, dwarfing the $6.2 billion in LDES. However, LDES investment growth rates are higher (240% over three years versus 80% for lithium-ion), and policy targets suggest LDES will capture an increasing share of total storage investment as grids reach higher renewable penetration and require longer-duration flexibility.

What are the biggest risks in the LDES sector? Technology risk has diminished as multiple approaches demonstrate viability, but project development risk remains elevated. Interconnection delays, permitting uncertainty, and revenue model immaturity (limited long-term contract structures for multi-day storage services) are the primary barriers. Bankability will improve as first-of-a-kind projects establish operational track records.

Sources

1. LDES Council. "Net-Zero Power: Long Duration Energy Storage for a Renewable Grid." LDES Council and McKinsey, 2025.
2. US Department of Energy. "Long Duration Storage Shot: Progress Report." DOE Office of Electricity, 2025.
3. BloombergNEF. "Long-Duration Energy Storage Market Outlook 2026." BNEF, 2025.
4. California Public Utilities Commission. "2024 Integrated Resource Plan: Preferred System Plan." CPUC, 2024.
5. Wood Mackenzie. "Global Energy Storage Outlook: Long Duration Technologies." Wood Mackenzie, 2025.
6. Form Energy. "Iron-Air Battery Technology: Commercial Deployment Update." Form Energy, 2025.
7. International Renewable Energy Agency. "Innovation Outlook: Long-Duration Energy Storage." IRENA, 2025.