Reuters
Surging power demand
from data center developers has spurred interest in emerging long duration
energy storage (LDES) technologies that can provide reliable clean power
supplies day and night.
Long duration energy
storage can bank and dispatch more than eight hours of power, or even several
days, helping to supplement intermittent renewable energy like solar and wind
and reducing reliance on backup fossil fuel generation.
Commercial energy
storage deployment to date has been shorter duration and is dominated by
lithium-ion batteries that benefit from years of cost reductions and technology
improvements. The U.S. added a record 57.6 GWh of battery energy storage
capacity in 2025, up 30% from 2024, but the vast majority had a duration of
two to four hours, according to report published by the Solar Energy Industry
Association (SEIA) and Benchmark Mineral Intelligence in February.
AI growth and
dwindling grid capacity is now boosting the business case for alternative LDES
technologies, sparking a number of large projects that will help demonstrate
these emerging technologies.
Power utility Xcel
Energy last month announced a deal with Google to develop a multi-technology
generation stack in Pine Island, Minnesota that includes iron air battery
systems for LDES.
Uncertain U.S.
federal policy remains a concern but contracts for multi-day battery projects
announced by utilities to improve system adequacy, such as Xcel Energy's
project with Google, are “a sign that planners are beginning to treat LDES as
part of their core capacity stack,” Anna Siefken, North America Policy and
Market director for industry group Long Duration Energy Storage Council, told
Reuters Events.
In the short term, shorter-duration
lithium-ion batteries will continue to dominate, experts said.
“Under current
conditions, new LDES deployments are expected to be mostly delayed until after
2030, driven in part by supply chain
constraints associated with Foreign Entity of Concern (FEOC) provisions,”
Santos Garza Romero, a director at consultancy Guidehouse, said.
President Trump's
One Big Beautiful Bill has kept tax incentives for battery energy storage
mostly unchanged through 2033 but new stricter sourcing requirements for
equipment and materials from FEOC countries including China introduce supply
chain uncertainties and risks for the deployment of new LDES technologies.
Developers also
suffer from a lack of regulated reward mechanisms in the electricity markets
for long-duration storage attributes, limiting their expansion compared to
short duration systems, Pete Tillotson, senior analyst at Benchmark Mineral
Intelligence, said.
“The vast majority of
merchant revenues now are rewarded on intraday and 2 to 3 day-ahead trading,
which is a relatively short duration for LDES,” he told Reuters Events.
"You don't need 24 hours of storage to do that."
Tech
partners
Xcel Energy's
project with Google in Minnesota will bring 1.6 GW of clean energy to the grid,
including solar and wind, and a 300 MW/30 GWh 100-hour iron-air battery system
supplied by Form Energy.
Google will cover
the cost of new grid infrastructure and the combined power solution will
provide firm capacity and strengthen grid reliability when needed, “even over multiple
days,” the utility said in a statement.
Form Energy's LDES
multi-day technology was first deployed at Great River Energy's Cambridge
Energy Storage Project in Minnesota late last year. The battery deployment at
the Google project in Minnesota is expected to start in 2028.
“Multi-day storage
unlocks new capacity on the grid and enables the rapid buildout of AI
infrastructure,” Sarah Bray, spokesperson for Form Energy, told Reuters Events.
Google also
announced plans this month to develop a new data center in DTE Energy's service
territory in Michigan, to be served by 2.7 GW of new resources
for the grid, including solar power, advanced storage and demand flexibility.
Under the proposed agreement, 480 MW of energy storage will be developed,
including 55 MW of LDES.
The strong financial
credentials and operational urgency of data center developers improve the
bankability of LDES projects, the Long Duration Energy Storage Council said.
State and federal
governments are also pushing data center developers to bring their own power
generation to curb power price increases for the wider public and this is
encouraging talks about LDES in the context of swift deployment, resilience and
affordability, Siefken said.
Large long-duration
projects can unlock significant unit-cost reductions for emerging LDES
technologies, Jiayue Zheng, managing consultant, energy storage at Wood
Mackenzie, said.
“Google's recently
announced iron-air battery project exemplifies this," he said. "Its
unprecedented scale enables projected costs well below lithium-ion equivalents,
demonstrating how gigawatt-scale deployments can fundamentally shift the
economics."
Behind
the meter
AI growth is also
opening up opportunities in behind-the-meter LDES.
Zeo Energy, a
Florida-based provider of residential solar, distributed energy and energy
efficiency solutions, acquired long-duration storage company Heliogen in 2025,
aiming to expand
its market reach and supply solutions to power cloud computing, artificial
intelligence, and data centers.
Zeo Energy's
acquisition of Heliogen added molten salt and compressed CO2 long-duration
energy storage technologies to its portfolio of energy solutions.
“We want to get into
supplying a behind-the-meter energy solution 24/7 that these data centers need
because the grid cannot give them enough power,” CEO Tim Bridgewater told
Reuters Events.
In February, Zeo
Energy signed a non-binding MoU to develop and supply 280 MW of baseload energy
generation solution for Creekstone Energy's data center site under construction
in Utah, combining solar power and long-duration storage. The company is in
talks with
companies over other commercial LDES projects in the planning and evaluation
phase.
“What we're looking
for is providing the solutions that the data center developers need in a timely
fashion and bringing financing and an engineering team that has expertise to
design the feasibility study [and provide] the engineering around these
long-duration storage opportunities,” he said.
Lithium
leads
While large-scale
LDES projects will help establish these technologies in the commercial space,
the dominance of lithium-ion batteries will continue in the coming years, aided
by declining costs and technology advancements that are extending battery
durations to as much as eight hours, experts said.
Alternative
technologies will chip away at
the dominance of lithium-ion, reducing its share of the battery storage market
from 98% in 2025 to 90% in 2030 as new technologies such as sodium-ion,
zinc-based, metal-air and flow batteries gain momentum, according to the
SEIA/Benchmark Mineral Intelligence report.
Lithium-ion battery
costs declined by more than 90% between 2010 and 2023, according to the
International Energy Agency (IEA). Average global battery project costs were
$125/kWh in December 2025, including $75/kWh for core equipment from China and
$50/kWh for installation and connection, analysts at research group Ember said.
Even for eight hours
storage, alternative LDES technologies deployed outside of China can be over
60% more expensive than lithium-ion systems, without a significant step up in
scale, Zheng noted.
To close the cost
gap, alternative LDES technologies will require "progress on both supply
chain maturation and project scale,” he said.
CHART: US battery
storage duration on the grid
CHART: Planned
behind-the-meter power capacity - top 10 states