Cost Reducing Adiabatic Compressed Air Energy Storage for Long Duration Energy Storage Applications

TL;DR

This paper analyzes the cost reduction potential of adiabatic compressed air energy storage (CAES) for long-duration energy storage, demonstrating its economic viability for 10-100 hour durations and its role in decarbonizing energy systems.

Contribution

It provides a comprehensive cost database and lifecycle analysis showing that adiabatic CAES can be economically viable for long-duration storage, especially with capacity scaling and optimal siting.

Findings

Cost of adiabatic CAES decreases by 15% with capacity scaling from 10MW to 100MW.

Economic viability is achievable for 10-100 hour storage durations.

Optimal geological siting reduces storage costs significantly.

Abstract

Long-duration energy storage (LDES) is vital for decarbonizing the energy system but faces economic challenges, including high upfront costs, low trading frequency, and limited revenue in current electricity markets. Compressed Air Energy Storage (CAES) is a promising LDES solution, though its economic viability, especially for long storage durations beyond lithium-ion battery capabilities, remains unclear. To address this, here we compiled and analyzed a global emerging adiabatic CAES cost database, showing a continuous cost reduction with an experience rate of 15% as capacities scaled from 10MW to 100MW. Our lifecycle discounted cash flow analysis suggests that adiabatic CAES could achieve economic viability for 10-100 hour storage durations, particularly with optimal geological siting to lower storage costs. This economically viable LDES option will enable large-scale grid balancing and support renewable integration over multi-day periods, making it a valuable asset for advancing deep decarbonization of energy systems.