Explainer: Long-duration energy storage (LDES) — a practical primer for teams that need to ship

By 2030, the European Union will require an estimated 200 GW of energy storage capacity to meet its renewable integration targets—yet as of late 2024, less than 60 GW of storage exists across the continent, with the vast majority being short-duration lithium-ion systems. This gap represents both an existential challenge for grid operators and a trillion-euro opportunity for teams building long-duration energy storage (LDES) solutions. Unlike conventional batteries that discharge in 2-4 hours, LDES technologies store energy for 8 hours to multiple weeks, enabling grids to weather extended periods of low renewable generation—the so-called "dunkelflaute" events that increasingly threaten European energy security.

Why It Matters

The urgency surrounding LDES deployment stems from a fundamental mismatch in Europe's energy transition: while renewable generation capacity has grown by 15% annually since 2020, the ability to store and dispatch that energy during demand peaks or renewable droughts has lagged dramatically. According to the European Association for Storage of Energy (EASE), the continent experienced 47 grid stress events in 2024 where renewable curtailment exceeded 8 GW—effectively wasting clean energy that could have powered 6 million homes.

The European Commission's REPowerEU plan explicitly identifies LDES as a "strategic enabling technology," projecting that 30-40% of the EU's 2030 storage target must come from systems capable of discharging for 8+ hours. This policy signal has catalyzed significant investment: LDES-focused funding in Europe reached €4.2 billion in 2024, a 67% increase from 2023 levels. The UK's Department for Energy Security and Net Zero allocated £500 million specifically for LDES demonstration projects, while Germany's Hydrogen Core Network plan integrates salt cavern storage as critical infrastructure.

From a grid integration perspective, LDES addresses three structural challenges that short-duration batteries cannot solve. First, seasonal balancing: Nordic countries experience 40% less solar generation in winter months, requiring storage durations measured in days rather than hours. Second, transmission congestion: Southern European grids frequently cannot export excess solar to northern demand centers, making localized LDES essential. Third, capacity adequacy: as coal and nuclear plants retire across Europe (with 45 GW of closures scheduled by 2028), LDES provides dispatchable capacity without fossil fuel lock-in.

The economic case compounds these technical drivers. Wholesale electricity price volatility in European markets reached unprecedented levels in 2024, with day-ahead spreads between peak and off-peak exceeding €200/MWh on 23 separate occasions in Germany alone. LDES assets can arbitrage these spreads while simultaneously earning revenue from frequency response, capacity mechanisms, and renewable energy certificates—a practice known as revenue stacking that fundamentally transforms project economics.

Key Concepts

Long-Duration Storage (LDS/LDES): Systems designed to store electrical energy and discharge it over periods ranging from 8 hours to multiple weeks. The International Energy Agency defines LDES as storage with discharge duration >4 hours at rated power, though most European policy frameworks now use >8 hours as the threshold for dedicated support mechanisms. Technologies include flow batteries, compressed air energy storage (CAES), liquid air energy storage (LAES), thermal storage, gravity-based systems, and hydrogen electrolysis paired with fuel cells or turbines.

Measurement, Reporting, and Verification (MRV): The systematic process of quantifying storage asset performance, greenhouse gas displacement, and grid service delivery. European LDES projects increasingly require third-party MRV to access green financing and comply with the EU Taxonomy for Sustainable Activities. Key metrics include round-trip efficiency, self-discharge rates, cycle degradation, and carbon intensity of charging sources.

Life Cycle Assessment (LCA): A comprehensive methodology for evaluating the environmental impact of LDES technologies across their entire lifespan—from raw material extraction through manufacturing, operation, and end-of-life disposal. The EU Battery Regulation (effective February 2024) mandates carbon footprint declarations for energy storage systems, making rigorous LCA essential for market access. Notably, some LDES technologies like iron-air batteries demonstrate significantly lower embodied carbon than lithium-ion alternatives.

Operational Expenditure (OPEX): The ongoing costs of operating an LDES facility, distinct from upfront capital expenditure (CAPEX). LDES economics differ markedly from lithium-ion: while many LDES technologies have higher CAPEX per kWh, they typically exhibit lower OPEX due to reduced degradation, longer operational lifetimes (25-40 years versus 10-15 years for lithium-ion), and cheaper storage media. For projects targeting 10+ hour duration, OPEX advantages often make LDES the lower levelized-cost option.

Revenue Stacking: The practice of deriving income from multiple grid services simultaneously or sequentially using a single storage asset. European LDES projects commonly stack energy arbitrage, frequency containment reserve (FCR), automatic frequency restoration reserve (aFRR), capacity market payments, and renewable energy guarantees of origin. Sophisticated control systems and market access frameworks are prerequisites for effective revenue stacking, which can increase project returns by 40-60% compared to single-service operation.

Traceability: The ability to track and verify the provenance of materials, manufacturing processes, and charging sources throughout the LDES value chain. With the EU's Critical Raw Materials Act and Corporate Sustainability Due Diligence Directive, traceability has become a compliance imperative. Leading LDES developers now implement blockchain-based tracking for battery materials and time-stamped verification of renewable charging to meet institutional investor requirements.

What's Working and What Isn't

What's Working

Pumped hydro modernization programs are delivering at scale. Despite being a century-old technology, pumped hydro storage accounts for 94% of Europe's installed storage capacity. New projects like Austria's 360 MW Obervermuntwerk II (commissioned in 2024) and Switzerland's Nant de Drance (900 MW, operational since 2022) demonstrate that modern pumped hydro can achieve 82% round-trip efficiency with response times under 90 seconds. The EU's revised Renewable Energy Directive explicitly supports pumped hydro refurbishment, enabling existing facilities to expand capacity without new environmental permitting—a pathway that Portugal and Spain are actively exploiting.

Flow battery deployments are proving commercial viability. Vanadium redox flow batteries (VRFBs) have emerged as the leading non-pumped-hydro LDES technology in European markets. Invinity Energy Systems installed a 7.5 MWh system at the UK's Energy Superhub Oxford in 2024, demonstrating stable performance across 15,000+ cycles with negligible capacity fade. CellCube deployed multiple systems exceeding 10 MWh capacity across Germany and Austria, with long-term service agreements that guarantee 25-year operational lifetimes. The technology's ability to decouple power (MW) and energy (MWh) sizing offers project developers unprecedented flexibility.

Compressed air energy storage is scaling through strategic infrastructure reuse. Hydrostor's A-CAES (Advanced Compressed Air Energy Storage) technology has secured development agreements in multiple European jurisdictions by repurposing underground caverns and depleted mines. The company's 500 MW Rosamond project design, while located in California, has informed European feasibility studies for similar-scale deployments in Germany's former salt mines and the UK's abandoned coal infrastructure. Unlike traditional CAES, adiabatic variants eliminate natural gas requirements, achieving round-trip efficiencies approaching 70%.

What Isn't Working

Permitting timelines remain prohibitively long for novel technologies. While the EU's revised TEN-E Regulation designates certain LDES projects as Projects of Common Interest (PCIs), actual permitting processes still average 4-7 years for technologies requiring new site development. Developers of liquid air energy storage and gravity-based systems report that environmental impact assessments often lack established precedents, forcing authorities to develop evaluation frameworks from scratch. This regulatory uncertainty has driven multiple LDES startups to prioritize North American markets despite Europe's more favorable policy rhetoric.

Grid connection queues are creating multi-year delays. Transmission system operators across Europe face unprecedented backlogs: Germany's grid connection queue exceeded 150 GW by late 2024, with LDES projects competing against solar, wind, and electrolysis facilities for limited capacity. The Netherlands reported average wait times of 6-8 years for new grid connections, effectively making greenfield LDES deployment economically unviable in many regions. Co-location with existing generation assets or demand centers offers a partial workaround, but this constraint limits site selection and scale.

Revenue stacking complexity deters non-specialist investors. While revenue stacking dramatically improves LDES economics, the operational sophistication required—including real-time market access, multi-market registration, and dynamic dispatch optimization—presents barriers for institutional investors accustomed to simpler contracted revenue structures. The fragmentation of European balancing markets (with different rules across 35+ bidding zones) compounds this challenge. Several LDES projects have struggled to attract debt financing because lenders cannot model revenue streams with sufficient certainty.

Key Players

Established Leaders

Fluence (Siemens and AES joint venture): The world's largest grid-scale energy storage provider by deployed capacity, Fluence has delivered over 17 GWh globally with significant European installations including projects in Ireland, Germany, and the UK. Their Gridstack platform integrates hardware, software, and services for LDES applications.

Wärtsilä: The Finnish technology company has deployed over 110 GW of power plant capacity worldwide and is aggressively pivoting toward energy storage, with particular expertise in grid-forming inverters and hybrid renewable-storage systems across Nordic markets.

Siemens Energy: Beyond the Fluence partnership, Siemens Energy is developing hydrogen-based LDES solutions and has installed multiple large-scale compressed air systems. Their grid integration expertise positions them as critical infrastructure partners for European TSOs.

Enel X: The energy services arm of Italian utility Enel operates one of Europe's largest virtual power plant networks and has deployed significant battery storage across Southern European markets, with increasing focus on longer-duration applications.

RWE: Germany's largest electricity producer has committed €15 billion to clean energy investments through 2030, including major LDES development through their Supply & Trading division and partnerships with technology providers.

Emerging Startups

Invinity Energy Systems (UK): A publicly-traded pure-play vanadium flow battery manufacturer with manufacturing facilities in the UK and Canada. Their VS3 product line targets 4-10 hour discharge applications with 25-year warranties.

Highview Power (UK): Developer of liquid air energy storage (LAES) technology with a 50 MW demonstration plant in Manchester. The company has announced 2 GW of projects in development across Europe and North America.

Energy Dome (Italy): Creator of CO2-based long-duration storage using a closed-loop thermodynamic cycle. Their first commercial-scale facility in Sardinia demonstrates 75% round-trip efficiency with 10+ hour discharge capability.

Photon Vault (Netherlands): Develops silicon-based thermal energy storage for industrial and grid applications, offering discharge durations from 8 hours to 5 days using abundant, non-toxic materials.

Form Energy (US, with European expansion): Though US-headquartered, Form Energy's iron-air battery technology—offering 100-hour discharge duration at claimed costs below €20/kWh—has attracted significant European utility interest and partnership discussions.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-founded climate investment fund with significant LDES portfolio companies including Form Energy, Antora Energy, and Malta Inc. Active in supporting European market entry for portfolio companies.

European Investment Bank (EIB): The EU's climate bank has provided over €2 billion in financing for energy storage projects since 2020, with dedicated LDES evaluation frameworks and favorable terms for technologies demonstrating low lifecycle emissions.

SWEN Capital Partners: French impact investor managing over €7 billion with specific energy storage allocation through their Transition Evergreen and Energy Transition funds. Multiple European LDES investments across flow batteries and thermal storage.

Energize Ventures: US-based climate tech investor with growing European presence, having led funding rounds for multiple LDES software and hardware companies targeting grid integration applications.

UK Infrastructure Bank: Established in 2021 specifically to support clean infrastructure, with LDES designated as a priority investment area and £500 million earmarked for storage project financing.

Examples

1. Cruachan Power Station Expansion, Scotland (Drax Group)

The existing 440 MW pumped hydro facility at Cruachan, operational since 1965, is undergoing a £500 million expansion to add 600 MW of new capacity using additional underground caverns within Ben Cruachan. The project, approved in 2024, will increase storage duration from 22 to approximately 40 hours and provide critical capacity for Scottish renewable integration. The expansion demonstrates how modernizing existing pumped hydro assets can deliver LDES capacity faster than greenfield development, with construction timelines of 6-7 years versus 10+ years for new-build sites. The project will support 1,500 construction jobs and is expected to displace 3.2 million tonnes of CO2 equivalent over its 75-year operational lifetime.

2. Energy Superhub Oxford, United Kingdom (Pivot Power/EDF)

This multi-technology installation combines a 50 MW/65 MWh lithium-ion battery with Invinity's 2 MW/5 MWh vanadium flow battery—one of Europe's first hybrid storage deployments explicitly designed for revenue stacking across multiple duration requirements. The facility provides frequency response services during normal operation while the flow battery component handles longer-duration arbitrage during grid stress events. First-year operational data (2024) showed combined revenue of £12.4 million against £8.1 million in operating costs, validating the economic case for technology hybridization. The project includes a 10 MW public EV charging hub, demonstrating LDES co-location synergies.

3. Bornholm Energy Island, Denmark (Energinet/50Hertz)

The Danish-German Bornholm Energy Island project, with final investment decision expected in 2025, will integrate 3 GW of offshore wind with an estimated 1 GW of LDES capacity using hydrogen electrolysis and compressed air storage in the island's geological formations. The €30 billion project represents Europe's most ambitious attempt to solve inter-seasonal renewable balancing, with hydrogen storage enabling energy discharge across weeks rather than hours. Preliminary engineering identifies 15 TWh of annual renewable generation potential, with LDES providing 40% capacity factor improvement versus curtailment scenarios. The project has secured €900 million in EU Connecting Europe Facility grants.

Action Checklist

FAQ

Q: What discharge duration qualifies as "long-duration" storage in European policy frameworks? A: While definitions vary, the emerging consensus in European policy designates storage systems with rated discharge duration >8 hours as LDES for the purposes of dedicated support mechanisms. The UK's LDES competition uses >8 hours, while the European Commission's LDES working groups have proposed >6 hours for some applications. However, the functional definition matters more than regulatory thresholds: true LDES addresses multi-day to seasonal balancing challenges that 4-hour lithium-ion systems cannot solve. Projects should be designed around grid service requirements rather than minimum qualification criteria, as the highest-value applications typically require 12-24+ hour discharge capability.

Q: How do LDES project economics compare to lithium-ion for 8+ hour applications? A: At discharge durations exceeding 8 hours, most LDES technologies achieve lower levelized cost of storage (LCOS) than lithium-ion batteries. This crossover occurs because LDES technologies (flow batteries, CAES, thermal storage) separate power and energy costs—adding storage duration requires only additional storage medium, not additional power conversion equipment. For a 100 MW system, extending lithium-ion from 4 to 12 hours roughly triples total system cost, while equivalent duration extension for vanadium flow batteries increases cost by approximately 60%. Additionally, LDES technologies typically offer 25-40 year operational lifetimes with minimal degradation, compared to 10-15 years for lithium-ion, further improving lifetime economics.

Q: What are the primary degradation mechanisms affecting LDES performance over time? A: Degradation patterns differ fundamentally across LDES technology classes. Flow batteries experience electrolyte imbalance and membrane degradation, typically losing 0.1-0.3% capacity annually—far less than lithium-ion's 2-3% annual fade. Pumped hydro facilities show virtually no capacity degradation, with 50+ year operational histories common, though mechanical components require periodic refurbishment. Compressed air systems face cavern stability and compressor wear as primary concerns. Thermal storage materials (molite, sand, silicon) demonstrate exceptional cycling stability but may experience some thermal losses from insulation degradation. For all technologies, operational strategies significantly impact degradation: depth of discharge, thermal management, and cycling frequency should be optimized during project design to maximize asset lifetime.

Q: How should developers approach revenue stacking across fragmented European markets? A: Revenue stacking in Europe requires both technical capability and market access strategy. Technically, assets must meet pre-qualification requirements for each target market—frequency response services often require faster response times and different metering than wholesale arbitrage. Strategically, developers should prioritize markets with transparent rules and established LDES participation: Germany's balancing markets, UK's Dynamic Containment, and Nordic frequency reserves all accommodate storage assets. Partnering with established aggregators or trading desks can provide market access while developers build internal capabilities. Software platforms from companies like Modo Energy, Aurora Energy Research, and Fluence's Mosaic IQ offer optimization algorithms specifically designed for multi-market European storage dispatch. Finally, Power Purchase Agreements (PPAs) or tolling arrangements with creditworthy counterparties can provide baseload revenue certainty while preserving upside from ancillary services.

Q: What EU regulations most significantly impact LDES project development in 2025? A: Four regulatory frameworks demand particular attention. First, the EU Battery Regulation (effective February 2024) mandates carbon footprint declarations, recycled content thresholds, and due diligence requirements that affect LDES technologies using lithium, cobalt, or nickel. Second, the revised Renewable Energy Directive (RED III) establishes criteria for storage to qualify for renewable accounting benefits and guarantees of origin. Third, the EU Taxonomy Delegated Acts define technical screening criteria for sustainable energy storage, directly impacting access to green financing and ESG-mandated investment. Fourth, the revised TEN-E Regulation enables certain LDES projects to obtain Project of Common Interest status, streamlining permitting and unlocking CEF grant eligibility. Beyond EU-level rules, national implementations vary significantly—the UK's Revenue Support Agreement mechanism, Germany's grid fee exemptions, and Spain's storage-specific auction frameworks all create jurisdiction-specific opportunities and requirements.

Sources

European Association for Storage of Energy (EASE). "Energy Storage Targets 2030: European Vision and Policy Requirements." Brussels, 2024.
International Energy Agency (IEA). "Energy Storage Tracking Report 2024." Paris: IEA Publications, 2024.
BloombergNEF. "Long-Duration Energy Storage Cost Outlook 2024-2035." London, 2024.
European Commission, Directorate-General for Energy. "REPowerEU: Strategic Framework for Energy Storage." Official Journal of the European Union, 2023.
UK Department for Energy Security and Net Zero. "Long Duration Energy Storage: Government Response and Funding Allocation." London, 2024.
Aurora Energy Research. "The Role of Long-Duration Storage in European Power Markets: 2025-2040 Outlook." Oxford, 2024.
LDES Council. "Net-Zero Power: Long Duration Energy Storage for a Renewable Grid." McKinsey & Company Partnership Report, 2024.
Fraunhofer Institute for Solar Energy Systems. "Levelized Cost of Storage Analysis for European Grid Applications." Freiburg, 2024.