Lithium-ion batteries beat novel long-duration tech in California contest

Community coalition opts for tried-and-true standby over flashy upstarts to provide 8 hours of energy storage.

(Hendrik Schmidt/Picture Alliance via Getty Images)
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California’s first competitive process for buying long-duration grid storage has concluded, and the winner is not a novel technology.

Back in fall 2020, a coalition of California’s community choice aggregators — locally controlled groups granted jurisdictional authority to buy clean energy for their residents — asked for bids for projects that could deliver at least 50 megawatts of power over eight hours of discharge. The winning storage facility would have to be able to begin operations by 2026, making this an early test case for the emerging long-duration storage market, which aims to turn the ups and downs of renewable electricity production into a reliable, round-the-clock power supply.

A lithium-ion battery project won the test, and the novel emerging technologies battling for dominance in the long-duration storage space came up short. 

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The lithium-ion Tumbleweed project, to be sited near the town of Rosamond in Kern County, will deliver 69 megawatts/​552 megawatt-hours of storage. Developer REV Renewables will build it with a project labor agreement in place that guarantees prevailing wages and apprenticeship programs, according to a statement.

The competitive selection process attracted interest from a gaggle of companies working on emerging technologies, including chemical flow batteries, compressed air, updated takes on pumped hydro storage, thermal storage and gravity-based storage. But in the end, the community choice aggregators picked the conventional technology that supplies almost all new grid storage being built today.

There are many interesting emerging technologies for storage,” noted Monica Padilla, director of power resources at Silicon Valley Clean Energy, one of the groups in the coalition. While lithium-ion traditionally has been viewed as a shorter-duration storage resource, the market is signaling that the same technology can be deployed at longer durations.”

Padilla declined to specify bid-pricing details, but she did note that projects were graded on factors including overall project economics, location, development risk and ability to meet compliance requirements.” 

REVved up and ready to compete

REV Renewables, an offshoot of privately held energy developer LS Power, has plenty of relevant experience to recommend its products as a low-risk option. 

The developer built what was briefly the largest battery in the world, the Gateway project in San Diego County, which came online in the summer of 2020. It has several other major battery projects operating or under contract in California. The company also owns and operates 1,642 megawatts of long-duration storage in the form of pumped hydro.

REV is working toward an initial public offering, according to paperwork filed with the U.S. Securities and Exchange Commission earlier this month. The IPO is intended to raise capital to fund further clean energy development and will coincide with a $100 million private placement sale of shares to SK E&S.

In the past, REV had shown little interest in developing long-duration storage. It first built a 40-megawatt battery to test out how to compete in California’s wholesale markets. Without a utility contract to support it, REV built that merchant plant, known as Vista, with just one hour of duration. It came online in 2018, and its performance paved the way for REV’s precipitous expansion into storage development. 

When the Gateway project started up, it also had only one hour of duration, though REV subsequently expanded that. The implication was that California’s power market offers little reward for adding multiple hours of duration. 

But when a customer demanded a longer duration, REV didn’t pass up the opportunity. 

Sobering news for novel long-duration storage startups

Other power providers in the state still need to obtain their own long-duration projects to comply with a state order. This group of community choice aggregators is just the first to complete its solicitation, so it would be hasty to extrapolate too much about broader market trends from this single data point.

Nonetheless, it looks like proponents of emerging long-duration technologies such as flow batteries, thermal technologies or gravity-based systems will have to wait a bit longer for one of their favorites to win a California contract. And while it remains the case that lithium-ion costs don’t scale favorably for projects that need to deliver many hours of electricity, REV offers a counterargument to anyone who blithely asserts that lithium-ion can’t compete for eight-hour storage. It can — and it did.


That’s an ominous sign for startups with novel technologies that are seeking to outcompete lithium-ion in the eight-hour-duration range. Iron-air battery startup Form Energy went far beyond lithium-ion’s competitive territory by designing storage for a 100-hour-plus duration. Numerous other startups call themselves long-duration storage companies but sell products in the four- to eight-hour range. Lithium-ion is edging in on that territory, bolstered by the benefit of an extensive track record and massive scale of production.

Julian Spector is senior reporter at Canary Media.