Long Duration Energy Storage: A Path to Energy Resilience
Julia Souder is the CEO of the LDES Council. "But what's LDES," you might be wondering? LDES stands for Long Duration Energy Storage, encompassing technologies capable of storing significant energy from 10 hours to weeks. The LDES Council, a global nonprofit membership organization, is dedicated to propelling the decarbonization of the energy system with a focus on affordability. They drive innovation, commercialization, and the implementation of long duration energy storage technologies, uniting technology and equipment providers, renewable energy firms, utilities, grid operators, investors, and end consumers. Julia's career is rooted in the crossroads of renewable energy and energy resilience. Her experience includes roles such as Director of Intergovernmental relations at NERC, the North American Energy Reliability Corporation, director of Western Renewable Grid planning at NRDC, and most recently, executive director of the Long Duration Energy Storage Association of California.
We've previously explored various long duration energy storage solutions on the show, making this conversation with Julia even more intriguing. Often we hear the phrase, "The sun doesn't always shine and the wind doesn't always blow," in the context of renewables, leading to economic fluctuations and service intermittency. This is a challenge that LDES aims to confront directly. Although many long duration energy storage solutions are currently trailing renewable energy technologies in development and deployment, Julia explains that this is expected to change significantly in the coming years.
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Episode recorded on Aug 23, 2023 (Published on Oct 2, 2023)
In this episode, we cover:
[02:51]: Julia's journey in renewable energy
[04:19]: The 2003 Blackout Investigation
[05:35]: The North American Electric Liability Corporation (NERC)
[09:38]: The emerging need for energy storage
[11:10]: Overview of the Long Duration Energy Storage (LDES) Council and their goals
[13:43]: Long duration energy storage vs. short duration energy storage
[15:51]: Overview of historical and new categories of LDES solutions
[18:23]: Deep dive into thermal solutions
[24:59]: Types of electrochemical batteries for LDES
[27:44]: Chemical solutions
[29:59]: Buyers and use cases of LDES solutions
[35:27]: How LDES projects are sold and deployed globally
[40:29]: Areas Julia is optimistic about, what needs attention, and evolution of capital for LDES
[44:18]: Julia's parting words on the importance of LDES
Resources mentioned:
Net-zero heat, LDES Council
24/7 Clean Power Purchase Agreements, LDES Council
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Cody Simms (00:00):
On today's episode of My Climate Journey, we're joined by Julia Souder, the CEO of the LDES Council. "But what's LDES," you might be wondering? LDES stands for Long Duration Energy Storage, encompassing technologies capable of storing significant energy for periods ranging from 10 hours to several days, or even weeks. The LDES Council, a global nonprofit membership organization, is dedicated to propelling the decarbonization of the energy system with a focus on affordability. They drive innovation, commercialization, and the implementation of long duration energy storage technologies, uniting technology and equipment providers, renewable energy firms, utilities, grid operators, investors, and end consumers. Julia's career is rooted in the crossroads of renewable energy and energy resilience. Her experience includes roles such as Director of Intergovernmental relations at NERC, the North American Energy Reliability Corporation, director of Western Renewable Grid planning at NRDC, and most recently, executive director of the Long Duration Energy Storage Association of California.
(01:17):
We've previously explored various long duration energy storage solutions on the show, making this conversation with Julia even more intriguing. Often we hear the phrase, "The sun doesn't always shine and the wind doesn't always blow," in the context of renewables, leading to economic fluctuations and service intermittency. This is a challenge that LDES aims to confront directly. Although many long duration energy storage solutions are currently trailing renewable energy technologies in terms of development and deployment, Julia explains that this is expected to change significantly in the coming years. But before we jump in, I'm Cody Simms.
Yin Lu (01:59):
I'm Yin Lu.
Jason Jacobs (02:01):
And I'm Jason Jacobs, and welcome to My Climate Journey.
Yin Lu (02:07):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (02:12):
In this podcast, we traverse disciplines, industries, and opinions, to better understand and make sense of the formidable problem of climate change, and all the ways people like you and I can help. And with that, Julia, welcome to the show.
Julia Souder (02:28):
Thanks, Cody. It's great to be here. Really appreciate the invitation.
Cody Simms (02:31):
I'm so excited to talk with you. And you were introduced to me by Eliza Nemser, my co-founder at Climate Changemakers, and one of my favorite people in the world. And so when Eliza says, "You got to talk to Julia," clearly, I got to talk to Julia.
Julia Souder (02:45):
Eliza's a rockstar, so I'm just honored to be in fellow company and yes, it's a great connection, great friend.
Cody Simms (02:51):
Well, fantastic. Looking at your background, you have been working in and around the renewable energy space for basically your entire career, and now you are wholly focused on long duration energy storage. We're going to dive all into that topic today. Before we do, why don't we hear from you, how this became the thing you decided to focus on, given the breadth of different topics that are available to look at in the renewable energy space, and what your path has been to get here?
Julia Souder (03:21):
It's definitely been a wild ride. I think we all set off with these goals in our life and the pathway, whether you're on a merry-go-round or roller coaster, it just all gets interconnected. And I'm really grateful for the journey I've been on. I started at US Department of Energy and got to jump in and work on the blackout investigation, and really got to see firsthand how dependable our entire economy, our livelihoods, are on electricity, power, and heat, and really got excited about solutions and how to take this amazing machine, this piece of infrastructure, and continue to modernize it and adapt it. And so got to work on some amazing projects with colleagues at the US Department of Energy. In addition to the blackout report, worked on the 360 energy corridors as west-wide corridors, and got to see the importance of working with the Department of Defense, the Department of Interior, Department of Agriculture, of how to work together to have plans to coordinate infrastructure.
Cody Simms (04:15):
What is the blackout investigation, for those of us who maybe weren't familiar?
Julia Souder (04:19):
In 2003, when there were three Canadian provinces and 11 states that were pretty much, just after 9/11, so a lot of people thought it was another attack, but it really was a blackout. Power was lost starting in Ohio, and just took down half of the country in the northeast.
Cody Simms (04:35):
I was in New York for that. It was crazy.
Julia Souder (04:38):
You were, so were you stuck in an elevator?
Cody Simms (04:39):
I was not. I was just walking around Brooklyn, but it was crazy. It was actually turned into a huge party, but it could have been really dangerous.
Julia Souder (04:47):
It was just a huge awareness and awakening that, wait a second, we need to put some standards, some accountability here, because there's just so much weighing, that lives were lost, 80 billion dollars, at that time, just diminished in the economy. It just was a turning point for the Energy Policy Act in 2005 that really set mandatory reliability standards for the industry, and also all these other pieces of work to help coordinate planning permitting, really just to try to see the whole ecosystem of moving it forward. After working at DOE, wanted to look more about implementation of the Energy Policy Act, and I got to work at the North American Electric Liability Corporation, so again, implementing those standards and putting out fires daily, working on changing culture and awareness of cybersecurity, and so many other elements to keeping the lights on.
Cody Simms (05:35):
I saw that on your background, the abbreviation, NERC, N-E-R-C, and I wondered how that is different from FERC, F-E-R-C, which I've heard a lot about, but I haven't heard as much about N-E-R-C.
Julia Souder (05:47):
NERC has been around since the sixties, but it was being quasi-regulatory group, but then Energy Policy Act really gave it teeth to be both in the quasi-regulatory of being working with industry on creating standards to be held accountable, but also having a compliance arm to really mandate $1,000,000 per day per fine in violation, and then working with FERC overseeing everything. It's not just investor owned utilities, it's every utility that works to keep the lights on is held accountable to these reliability standards, and so this organization was working in the middle, trying to either keep everyone happy or no one happy, of trying to see how we can keep the lights on. It's a really important organization highlighting scenario planning, long-term assessments, and looking at the themes of how to keep the grid working in a unified manner.
Cody Simms (06:34):
Building on your work from having worked on investigating why the blackouts happened, you moved into a role of actually working at the government regulatory body that was managing resilience to try to avoid future blackouts.
Julia Souder (06:46):
Exactly.
Cody Simms (06:47):
Awesome.
Julia Souder (06:47):
Yeah, it was another great opportunity to work with amazing people dedicated to keeping the lights on, and just really learning different cultures of different utilities, and how to work with Canada and Mexico and the interties, and looking at the three systems in the United States that are caught, the western system, the eastern system, and how they work and have their own cultures and dynamics, but then wanted to go build something. So then I worked with Michael Skelly at Clean Line, and his amazing team, and got to work on building HVDC transmission lines, and part of that line is actually energized today in New Mexico, which is pretty exciting to see transmission can get built. You've just got to keep pushing policies forward, and keep motivated, and get all the figures in play with financing and all the stakeholders, but it definitely was a game changer.
(07:28):
And then because of all the work educating governors, mayors, community leaders on the importance of infrastructure for clean energy transition, I moved over to Natural Resources Defense Council, and became an advocate working with different coalitions of the importance of regulatory matters, but also how do you balance grid operations and transmission planning, and really seeing, again, the entire ecosystem. And then moved into starting my own company, and working on strategy and transmission planning, citing equity, really talking about affordability and this just and equitable transition, working with First Nations Native American tribes. Because previous systems were just very exclusionary, and if you really want to make this an inclusive equitable transition going forward, we have to change how we do things, and this was a big part of the transition I was playing in.
Cody Simms (08:14):
During that time, at least while you were at NRDC, I guess, so a little earlier maybe, you were also on the board of the League of Conservation Voters in the San Francisco Bay Area, too. Is that correct?
Julia Souder (08:25):
Here in San Francisco, very different than the state of California, but yes, I got to really work with local politics, and really help on the importance of solar and wind, and really understanding hydropower and looking at who powers our homes and our communities, and what kind of benefits we can tie back to the community.
Cody Simms (08:42):
And so recognizing in all of your time, both understanding grid resiliency and then building out transmission lines, recognizing that oftentimes, it was local policy as much as it was financing dollar availability and whatnot, that was causing things to not get done as fast as you were hoping, I'm guessing.
Julia Souder (09:01):
Very true, but you have to have some patience, and just keep some optimism alive to keep going. Because I think the urgency just continues to build, and I think the awareness has grown not just here in the United States, but globally, about how critical it is to make this transition happen. And that's why I wanted to really move into this global role as CEO of the Long Duration Energy Storage Council, because storage is such a critical component to the entire network. Whether you are a remote system or a utility scale and city center, or whether you are an island nation, you're going to need long duration energy stores to meet your net-zero targets, or your decarbonization goals.
Cody Simms (09:38):
When I think of the big problems in the renewable space, I think of deployment. How do we create more generation? How do we actually get more renewable energy created? I think of transmission, which we talked about, which is how do you move energy around? And then storage is really a relatively new problem. We've had storage for a long time, but with renewables, it introduces this incredible need for storage, I think, at a higher level than we have had previously. Am I totally off base in how I think about that?
Julia Souder (10:11):
You're right, Cody. We've had storage in a variety of ways. We store things in our homes, in our garages, and in our communities. We use storage to really help us give that flexibility, and now we need to make it work for our energy system and our grid infrastructures, and we are now making this transition happen that, to your point on this, flexibility is critical, and we're seeing weekly, it's no longer monthly or yearly, but weekly climate disasters that are happening around the world that we can't always depend on traditional sources. For using wind and solar, we need to capture that when they're available and use it later when we need it, and that's what long duration can do. It gives you that flexibility to store the renewable energy. You save money because you're not curtailing it. You can also use storage as a transmission asset or a congestion management reduction. And so, as you move forward in this, you just really see that there's enormous value to long duration storage for hours, days, months and years.
Cody Simms (11:00):
Oh, interesting. Using it as a transmission aspect, I suppose we'll get into topics like hydrogen and whatnot when we get there, but let's park that and come back to that, because I hadn't really fully thought about that. Talk about the role you then took at LDES. What is LDES Council?
Julia Souder (11:14):
The LDES Council is a global secretariat based in Brussels, and we bring together the entire ecosystem. We have the four families of long duration storage and our technology members. We have mechanical, thermal, electrochemical, and chemical, so we look at all the types of batteries that are on the periodic table that are not lithium ion, and power and heat, thermal energy storage. There's diverse companies that give, whether it's salts, or aluminum, or concrete, or metals, volcanic rocks. We also look at chemical, which is hydrogen, look at green hydrogen, because it's that power heat, hydrogen nexus that we're literally honing in on of the value out of LDES. And the mechanical, the tradition of pumped hydro is great LDES, and then there's all these new innovations happening with pumped hydro, but also new technologies. And so, really coming together as the technology members, sharing insights, really creating this marketplace, and then also having the equipment manufacturers, the customers, the financiers, the developers, the utilities, all validating the need for LDES.
(12:11):
And so, we as a council produce reports, and work on education advocacy, and really trying to provide facts and data for decision makers around the world to really change the marketplace. It is a 4 trillion marketplace for LDES. This is a huge opportunity, and that's even a conservative number, and looking at what we need to do. If we're going to scale to this tripling renewables that so many organizations are talking about, which is 11 terawatts by 2030, we're looking at eight terawatts by 2040 for long duration energy storage, and so that really means four terawatts by 2030, so we have a long ways to go.
Cody Simms (12:46):
Where are we today? Where are we now?
Julia Souder (12:47):
By the end of the 2024, we'll be lucky to be at 175 gigawatts.
Cody Simms (12:51):
Okay. Wow. I can't do the quick math, but-
Julia Souder (12:55):
We have a huge scaling problem.
Cody Simms (12:57):
A significant order of magnitude larger.
Julia Souder (12:58):
It's a huge order of magnitude, and what's exciting is that there's one terawatt of wind, there's one terawatt of solar, but we need to still get to those 11 terawatts, and we still need to get LDES up there so we can utilize the efficiency and the benefits of wind and solar decreasing emissions, and providing lower costs.
Cody Simms (13:16):
For listeners, we've had a few different long duration energy storage solution providers on the show you can go back into the archives and listen to. One of the reasons I'm excited to have you here is because we can set the table with the history of the space, and then moving into what are the different solution types that are being worked on today, which you talked about some of the broad categories there, but before we do, just for my own education personally, can you describe how you think of, or what the industry thinks of as long duration energy storage relative to short duration energy storage?
Julia Souder (13:51):
Sure. Short duration, which is really important, it's four hours or less, and that's really supported by the marketplace today in various areas around the world. There is this bridge of six to eight hours, where both short and long duration can play, and that's also due to market elements and design today. As we move into long duration, you're looking at 10 hours plus, the multiple days, the months, and the seasons, and that's why the diversity of long duration stores can play in all these different areas.
Cody Simms (14:18):
Short duration, for lack of a better way of thinking about it, is I would think of it as a backup battery, or helping you deal with an immediate power outage.
Julia Souder (14:27):
Exactly.
Cody Simms (14:27):
Long duration is actually managing more the supply and demand of energy or electricity in particular, I guess, from the grid perspective, relative to what can be generated at any given moment in time.
Julia Souder (14:39):
Right, and really maximizing the renewable energy curtailment that gets wasted during the middle of the day. You can't store it for 10 hours later when you need it in the evening, or if you need to store it for three days while you're dealing with a weather event that you have no wind or no solar, but you want to make sure your electricity stays on 24/7. It gives you that availability to meet every hour of every day, of every month, of every year, with a long durationary storage filling in those gaps.
Cody Simms (15:05):
Do you see short duration, over the next decade or so, being heavily essentially covered by the growth of EVs, and potentially two-way directionality between vehicle to home and vehicle to grid?
Julia Souder (15:18):
I think it's great how two industries really helped uplift each other, and that you had the transportation EV transition pushed lithium ion, but you also had the grid push this, but since over 90% of lithium-ion goes to EVs, there is going to be this transition. A short duration is going to be really important, but how, again, do these market interfaces, and what's happening with the supply chain? And so that's another thing about LDES. A lot of the elements that we use are environmentally safe. They don't catch on fire. They're accessible in variety of countries, and a lot of them are just very prevalent around the world.
Cody Simms (15:51):
Well, let's go into some of the LDES solutions, then. Let's start with, you called it traditional, so traditional pumped hydro, which has been around for decades and decades now.
Julia Souder (16:00):
100 years.
Cody Simms (16:01):
Explain how that works, and explain, you mentioned there are some new innovations starting to also hit that space as well.
Julia Souder (16:08):
Mechanical, as you said, has been around. If you looked at pumped hydro for over 100 years, it works quite well. It's the largest long durationary storage. Pumped hydro is over 90% of renewable energy right now in the world. It's really providing such a fantastic backbone that operators are really familiar with, and they understand. And so as we transition to build on the mechanical energy, the gravity pool of pumped hydro, we're looking at what's compressed air, looking at liquid air.
Cody Simms (16:34):
Before we do that, can you describe what pumped hydro is for folks, who aren't quite familiar with it?
Julia Souder (16:38):
Sure, so picture two buckets of water, and one's higher than the other, and so you move water from the top bucket to the bottom bucket to produce electricity. And then when you don't need this, you use maybe the surplus energy, you pump it back up to the top bucket, and you keep this closed loop cycle. There's open loop and closed loop and different innovations, but just this movement of water up and down and back and forth produces electricity.
Cody Simms (17:01):
As it comes downhill, it spins turbines, essentially?
Julia Souder (17:03):
Exactly.
Cody Simms (17:03):
Okay.
Julia Souder (17:04):
Yeah, great picture. And now, there's new technologies where you're going underground and you're pushing water or air down and pulling it back up. There's above ground, below ground. We're looking at new technologies side to side that really is impressive, whether you're using-
Cody Simms (17:21):
Flywheels is another one I've heard of, which is like spinning-
Julia Souder (17:21):
Yeah, since flywheels do really well for both short and long, there's a lot of different technologies that are great. It's that diversity that's so important, because it depends on your geography, and what you have available. Do you have reservoirs that you can use for not only recreation, but pumped hydro, but also for drought saving measures? Do you have some underground caverns that you can repurpose and utilize for air, and even green hydrogen? Again, that diversity is really important. But yeah, the new innovations are using less space. New types of water-based systems are not using water. There's again, liquid air. There's liquid CO2, and there are different types of mechanical elements with the gravity push and pull. It's fantastic to see that island nations, urban centers, remote centers, transitioning from fossil fuel infrastructure into using existing jobs and infrastructure into mechanical is also we're seeing happen. Using mines, that's happening around the world, too. It's amazing just to see creativeness, but also just innovation developing to address the urgent needs we have.
Cody Simms (18:23):
And then on the next big category is thermal, that I would think of, which is how is heat used to store energy? Heat is a form of energy, obviously, and heat is one of the primary uses for energy and heavy industrial use cases is to take energy, or take electricity, and figure out how to turn it into heat. And yet, from what I understand, heat can also then be redirected back to energy, so there's a bidirectionality of that, if you can manage to keep something stored for long enough. Traditional means of doing this is some kind of molten salt solution, is that right?
Julia Souder (18:56):
Yes, and that builds from the experience in concentrating solar power, but there's a lot of different types of salts. And again, another element, a mineral that's really easy to have access to. We're also looking at other types of salts. We're looking at rocks, we're looking at volcanic rocks, we're looking at crushed aluminum, we're looking at cement. There's so many different substances that can really produce this heat at wide range of temperatures.
(19:20):
We have a report posted on our website called Net-Zero Heat, where we go into the three different types of thermal energy storage, whether it's sensible heat, which is a majority of the thermo energy technologies today, latent heat, and thermochemical, which is probably one of the hardest. But it's looking at solids to liquids, just looking at solids, and looking at salt. Having this diversity, again, is really important because as you pointed out, the industrial sector is really hard to decarbonize, but it's not impossible, and LDES has a significant role to play providing that heat to [inaudible 00:19:49] sectors, agriculture, fertilized cements, steel, aluminum, and mining industry, all these groups need LDES to really help on the transition, especially because so many of these technologies are available today, they're in the marketplace.
(20:01):
We just need them to scale up. And so, that's also really exciting is that we have solutions today to start addressing the needs of tomorrow, because LDES does really does help maximize the cost savings, environmental benefits, and the reliability. One thing I want to point out, too, with thermal is that in our report, we highlight that you can save $540 billion a day with LDES in your systems, and just because of the savings you get for the low cost resources, the renewable energy curtailment savings, and so many other elements, but it's quite impressive just to see the optionality of what LDES can bring.
Cody Simms (20:35):
You mentioned that heat is used by heavy industry. We'll get into this probably in more detail, but when it comes to who is buying each of these systems, do you see certain solutions being more used by utilities to manage grid scale, energy storage long-term, and certain systems being used more by private enterprise to help them basically build their own resiliency and/or cost efficiency improvements into their operations?
Julia Souder (21:04):
What we're seeing with who's buying LDES, it's a diverse range of customers. We're seeing databases and data centers look at LDES as a solution for power and heat, to have that reliability right there, to give them that 24/7 that they need to have. We're seeing a variety of industrial customers come to LDES to produce heat for producing food in agricultural or fertilizer producing. I'm helping with desalinization. It really depends on the industry.
(21:30):
We're looking at the mine industry, not just for what they can do to boost the mines for LDES, but also the minerals, but also on-site, moving away from backup diesel generator and using longer duration storage to fill in the gaps. Having this opportunity to really pull in thermal energy storage is quite impressive. And one other element, too, is just the amount of emissions that are caused by industrial sector, over 40%, and just how important it is to have LDES really address scope one, two, and three emissions is also a huge part. One last thing on thermal energy, you mentioned district heating, just the fact that we power homes a lot with gas, and we can move into using thermal energy storage to provide heat for district heating for homes, for so many other elements.
Cody Simms (22:13):
Wait, unpack that some more. This would mean you're actually transmitting heat over distance, potentially?
Julia Souder (22:20):
There's technologies that use existing infrastructure to push heated steam.
Cody Simms (22:24):
Okay, got it. I think of geothermal, but that would be local to a building. Would that also potentially be considered an energy storage system as well?
Julia Souder (22:34):
We have synergies with geothermal and with other partners, and that's why we're also part of the Global Renewables Alliance. And yes, geothermal has base capacity, but LDES can also do dispatchable elements and also looking at what kind of creative batteries or LDES can be onsite, too. So yes, the amount of investment that's happening for LDES technology, and these partnerships that are occurring, I think there was, what, 29 billion since 2019, and it's growing. You see announcements every week now for gigawatt factories, and hundreds of millions of dollars being invested, because I think the write-ins on the wall, traditional banks, VC firms, many other groups are making the capital work for LDES, because they see the market potential.
Cody Simms (23:12):
If you think about it, traditional power plants is often converting energy into steam, and using that steam to spin a turbine. And so, if you can just pull the steam straight out of the ground, not only can you heat something with it, but you could presumably create electricity out of it.
Julia Souder (23:27):
Yeah, LDES, and especially thermo energy storage, can replace gas plants, and we can help that with off green greenhouses, pica plants, aluminum refineries, chemical plants. You can really put an electric boiler with thermal energy storage, or a heat pump with thermal energy storage right there, and get cost savings and environmental benefits, and you can find a lot more of this about it in our reports. We're also producing a new report coming out in October on industry decarbonization LDES, and how there are certain solutions that can happen today that can really help address many of the questions and concerns industry has.
Yin Lu (23:59):
Hey everyone, I'm Yin, a partner at MCJ Collective, here to take a quick minute to tell you about our MCJ membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to thousands of members globally. Each week, we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn, and a bias to action around ways to accelerate solutions to climate change.
(24:26):
Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done. Many early stage investments have been made, as well as ongoing events and programming, like monthly women and climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more. Whether you've been in the climate space for a while, or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to MCJcollective.com, and click on the members tab at the top. Thanks, and enjoy the rest of the show.
Cody Simms (24:59):
Continuing our tour through the categories, the next one is, when I think of storage, obviously, I think of batteries, but when it comes to the types of batteries used for long duration energy storage, these are batteries I'm much less familiar with. Flow batteries.
Julia Souder (25:12):
You're not alone.
Cody Simms (25:13):
Static batteries, metal, iron, air batteries. I don't actually know what any of this stuff is, so maybe, let's spend a little bit of time here unpacking all of this.
Julia Souder (25:22):
It's really phenomenal to see the diversity of electrochemical types of batteries for long duration storage, and you mentioned it, the static batteries, the flow batteries, the metal iron batteries, the air batteries, and other battery chemistries, the aqueous sodium, magnesium, calcium. It's phenomenal. Depends on the technology, but looking at the two different setups of one tank to the other tank, and just moving ions back and forth, and the charge and discharge, whether you're using metal or different anode to charge and discharge, how long you can hold it for. And so what's great about so many of these technologies that they can hold it for 8, 10, 12, even hundreds of hours, so there's not a lot of loss of efficiency. They have long cycle lives, there's like 20-year assets, the safety aspects, the ambient temperatures. A lot of these can be, you don't have a huge rise in temperatures. They're very self-contained. They have the load falling, the ramp falling. A lot of these ancillary services that you need for the market and grid services, you can get with LDES.
Cody Simms (26:20):
And so, is the goal here, a few fold, one, try to utilize materials that are not as supply chain constrained as we know the typical lithium ion chemistries are? And two, it's just a very different utilization model than an EV is, for example, where you're having to charge and discharge it frequently, and you're having to use it to essentially power a vehicle on and off, on and off, on and off?
Julia Souder (26:46):
Much more efficient and effective. And just, because you have that longevity of just the duration, which is so critical, and it gives you that flexibility. Let's say you need that eight hours to cover from 2:00 PM onward, just to see what kind of ramp you have, and that curve was talked about in California. There's a camel curve, there's a dragon curve. It depends which country you're in. But this is a huge need, that LDES can really give you the opportunity to have that energy shifting so you can really have that flexibility need for your climate-dependent generation.
Cody Simms (27:15):
Can you explain what some of these batteries look like, or are?
Julia Souder (27:18):
Sure. Many of them look just like a container like you see it everywhere else. Just set up the containers, stack the containers. Some use proprietary pieces within each one, but yeah, no, I think they look like a very traditional battery in many ways, and it's like just building on existing knowledge of why this is so important.
Cody Simms (27:35):
Just experimentation with different chemistries, essentially?
Julia Souder (27:37):
Yeah, it's pretty amazing that it's not something scary. It's more that, wow, this makes so much sense. This is going on basic chemistry.
Cody Simms (27:44):
The last category that I guess would get thrown around is chemical, which I think of as mostly hydrogen or ammonia, so basically other forms of chemicals that themselves have either combustibility or usability as an energy source.
Julia Souder (28:00):
And looking at, again, the 100 plus, really looking at seasonality that you can get from a variety of LDES, but just moving into using the existing infrastructure, looking at what you can do with electrolysis, and then taking it to the next level. There's a big debate over using hydrogen for storage, and depends on geographies, and also using hydrogen as a fuel. We've looked at just looking at different ports around the world, and looking again at the partnership of what types of LDES technologies can work in harmony with hydrogen at ports, and how to look at the green hydrogen economy, and what does this do? We've also looked at island nations where there's existing pumped hydro, and how can you bring in hydrogen as a hybrid nature? So again, looking at the way that the four families of LDES can really work together, but the power heat hydrogen element is so critical in that diversity is also something that's a necessity.
Cody Simms (28:51):
And so, in many cases I would think of hydrogen as being, to some extent, an alternative to natural gas? Is that a right way to think about it, or is that totally off?
Julia Souder (29:01):
I would say LDES is an alternative to natural gas.
Cody Simms (29:04):
LDES in general, okay.
Julia Souder (29:05):
Yes, because we really can replace natural gas backup diesel generators, so many of these fossil fuels that are out there. This is possible with LDES, with renewable energy.
Cody Simms (29:13):
And you talked about LDES as a transmission mechanism. That's where the hydrogen use case really comes to mind for me, because it's a thing that you can move from place to place. Is that correct?
Julia Souder (29:23):
It's an interesting element, which [inaudible 00:29:26] a perspective, because it's one way. I think another way is to look at having an LDES technology right there at a congestion area can really help store any congestion at the moment, and then help the grid really push power around, and then bring it back on when there's any gaps or need. You can defer transmission development and it takes so long anyways, again, while you're waiting, put LDES in to help you manage your system. There's a variety of ways to really bring in the grid attributes of LDES to really help maximize existing infrastructure.
Cody Simms (29:59):
Who's buying LDES solutions today? How are you seeing the purchasing of these solutions evolve from grid-based purchasers or utility-based purchasers to also industrial and commercial-based use cases?
Julia Souder (30:15):
One of the four reports on our website focuses on the 24/7 clean power purchase agreement. Take an existing tool that's very familiar to diverse customers, a power purchase agreement that utilities, industry, many different types of traditional and innovative customers are using, and building it into it this metric of, well, if you really want to have 24/7 renewable energy, then you need long duration to do this. And if you change the criteria in your power purchase agreement, then you can get the benefits of this agreement, but make sure that you're getting 24/7 clean energy because of the way that LDES will work for you. And so, it's becoming a very successful tool around the world of being able to adapt the value of LDES into 24/7 clean purchase agreement. There's one way the bilateral contracts that's working.
(31:00):
The ancillary service market, is it growing and adopting? There's a way that LDES gets payments today for charge and discharge, but now that there's the reality of the other benefits of load following frequency response, inertia, black start, there's all these other aspects that LDES does not get credit for, but when it does, there's a whole nother avenue to really bring in revenue and additional benefits. In the Philippines, for example, they have four different markets, so they have those two, but also, they have an ancillary service market. They have the bilateral, they have 24/7, they're able to bring in LDES into real time, and really maximize the benefits.
(31:35):
And there's other markets around the world where they might have a cap in floor, and how LDES can play there. It really depends on what's available, and how we can advance the marketplace to really bring in more of the attributes. There are additional contracts by industrial customers who want LDES to start powering their, whether it's the heat, like mine industry or refinery, and so, they're signing contracts to start build on-site.
(32:00):
And then I say there's still a lot of pilots that are growing from the one megawatt to the 50 to the 200 megawatt, that are really starting to demonstrate all this additional value add, and that's really starting to, again, open up the marketplace. There's a lot of signed MOUs with utilities that are really starting to have open dialogue and discussions about benefits. What we're seeing in Europe, too, is that there is so much need to really stave off the renewable energy curtailment that we saw in the UK, and also in Spain, and Germany, to help with congestion, that they're starting to sign contracts, too. And it doesn't take five years to build LDES. Some of these can be built within a year, some two years, and you don't have as many permitting citing issues, either. So then, you have that another expedited nature that you can bring LDES into the system.
Cody Simms (32:44):
I heard three big use cases from you. The way you said that one was a behind-the-meter use case for commercial and industrial buyers who, when they're looking at doing a power purchase agreement, also want to include LDES or long duration energy storage as part of the power purchase agreement that they're buying. It feels like that is just going to become standard. Why would you buy power without having a way to store the power?
Julia Souder (33:09):
Exactly.
Cody Simms (33:10):
We're financing a way to store the power that you're generating as part of the power you're buying.
Julia Souder (33:14):
That's what we're working towards.
Cody Simms (33:15):
And then I heard a second use case, which was also commercial and industrial buyers who, in particular, may be looking to secure an industrial benefit like heat, or something that would historically be a cost to them, and LDES is essentially a byproduct of that purchase, but also helps them then manage their power needs. The third use case is the front-of-the-meter use case with utilities and grid who are, as they're growing their capacity, are looking at ways to increase storage as part of that.
Julia Souder (33:46):
Yes, and I would just add one more to that. A lot of the existing infrastructure gas companies, fossil fuel companies, are looking at how to transition in to LDES, utilizing their existing systems, so that kind of partnership too, whether it's just in-house R&D that just evolves just because they know they need this, or signing a contract that they will build and then bring into their market of making the equipment, and then reselling it, or having a percentage of the industry, too. There's some unique partnerships that are also forming to really support and buttress the marketplace.
Cody Simms (34:15):
The heat use case that we talked about, of the four categories of LDES, the heat one seems obvious in terms of who would buy it and why they might buy it. If they need it for an industrial use case, I need heat to whatever, create cement, or to run my paper mill, or whatever it may be. Of the other categories, though, you just walked through so many solutions. How in the world does someone decide what is right for their project?
Julia Souder (34:42):
Well, we've been working with partners like the World Bank, UN, various other solar storage associations in regional areas, to look at what does that region need, what does that community need, and help on criteria and show, if you're looking for something that you need durations of 24-hour plus, and this is your geography, then here's a list of options that you can choose from. If you're looking at replacing diesel in airports, or a fuel source here, what you can use also due to size and duration, that's the diversity element that's so important, that we really want to keep promoting to the marketplace, is that we have so many choices and optionality that we need to choose from. Yes, there's not going to be 1000 companies in LDES, but it's going to funnel down, but we still need that diversity to make sure we can meet these needs each of our economies are demanding.
Cody Simms (35:27):
Typically, is this sold through a project developer? Let's take the case of the three use cases we talked about, which is, I'm a commercial industrial company of some sort. I am looking to create a new power purchase agreement, and as part of that, I want as much renewable energy coming into my facility as possible. Maybe I'm trying to hit 24/7. Even if I'm not, I still care about hitting my net-zero goals as a company, and powering my facility on renewable energy. And so, I'm looking at new power purchase agreements, trying to pencil out the math of how much I'm paying, and I'm realizing that if I can layer in long duration energy storage as part of the power that I'm buying, that I can get a better return, even if I'm having to essentially finance and fund this storage project as part of the power plant that I'm helping to build out. Who's bringing me the different menu of potential projects, and how am I ultimately choosing what to finance? I know it's a very complicated question to try to create a simple answer to.
Julia Souder (36:29):
But it's a really important question, and Cody, thanks for it. I think this is the crux of it, is that some parts of the world, there's a very clear process. In Australia, they just issued, the government actually sponsored a request for setting parameters for the LDES markets, and beforehand, worked with a variety of stakeholders to fill in the criteria, and now everyone's now responding to this saying, "This makes sense, this doesn't, we need this flexibility, this is how you define it." That open forum, we're really looking forward to seeing success come out of this, really giving the opportunity to share lessons learned and setting a standard for what kind of criteria in a clear, transparent manner of how that's being communicated to customers, and having that support mechanism by the government saying they're going to step in and also help fund some of this, especially for the larger costs, because upfront, it might cost more, but the benefits within five, 10 years are going to be really accessible and known.
(37:20):
We saw this in Spain, too. We sent specific LDES targets out there to get the right message to the utilities into the marketplace saying, "We need 15 gigawatts, and we need to really make sure we're going to support this by funding to find these public-private partnerships." We're seeing the same thing in Chile, in the United States with the IRA and the help from the US Department of Energy, with not just the loan guarantee program, but different grants and different initiatives, and working with the states, New York, Texas, Minnesota, California, on taking the pilot to the scale. It's a proven technology. There's all these different things at work. It's just really trying to scale it up to get the benefits. So yes, making sure that criteria is understood, finding these partnerships to really communicate this, using groups like the Council to bring together industry voices and saying, "This is what we need, this is what we want."
(38:06):
And we have an MOU with Department of Energy, Edison Electric Institute, EPRI, other power resources, that we're all working together on addressing modeling metrics. How do we really better define LCOS, LCOC, the levelized cost of storage, heat, electricity, energy. How do we really bring this into this unified voice? I think these partnerships are key. The fact that we clarify the criteria, and we get it out there and known. Coordinated RFPs are really important, requests for proposals, and we're really starting to, again, share these lessons learned in business case studies that work. But what's thrilling is that it's happening. It's not just traditional VC funds that are investing in this. EPCs are now saying, "I validate this. Let's get this out there." You're having the traditional banks say, "I want to invest in this." You're having customers demanding it. The whole system has changed, the request for information and just addressing it.
Cody Simms (38:57):
If I am a chief sustainability officer at a Fortune 500 company, depending on where I am in the world, I am going to probably hit up a bank or a consulting firm that I know that has a specific focus on power purchase agreements. Because that's where I'm going to start, I'm probably going to start with buying power. I'm going to hit them up. I'm going to talk to them about where my project is that I need power, and how much, roughly, power I need.
(39:24):
They're going to look at different power solutions, and then as part of that, they're going to say, "Hey, and by adding storage to this solution, here's what we're going to come out in terms of your levelized cost of energy overall." And then, they probably have relationships with an organization like LDES Council or NERC or somebody like that who's going to say, "Hey, here are these other programs. Oh, by the way, did you know that in New Jersey, there's this RFP out by the local government looking for X, Y, Z types of storage projects? Let's apply for that as part of our overall PPA application." Is that how this stuff's happening today?
Julia Souder (40:01):
In many ways, yes. We have become the voice on LDES, and we have really done a ton of education outreach to diverse stakeholders, banks, they're all coming to us to really better understand this. And we help our members know about all the opportunities that are out there, and how to coordinate responses, and really puts us forward. Especially because there's so much, but we're a one-stop place to really make sure that we're feeding information in and out, and also coordinating the message among the industry to really push forward the importance of this.
Cody Simms (40:29):
You talked about the incredible growth that is going to be needed in LDES to help us meet our overall renewable energy goals. What has you optimistic at the moment, and what areas need more attention?
Julia Souder (40:43):
Optimistic, because I think just the enormous awareness in this last year of how critical LDES is to meeting our global net-zero decarbonization goals. It's a game changer. We're part of the Global Renewables Alliance with global wind, global solar, global geothermal, global hydropower, global green hydrogen, and long duration storage. The six of us in industrial sectors are working together on how to improve permitting, citing using 24/7 clean PPA. That gives me hope that we have this industrial group that is really supporting how we are going to actually implement working together to meet the tripling of renewables and the role of LDES. That's very powerful.
(41:20):
I think now, what we need to do is really have the call-out for LDES. We need more of these procurement targets that give the market signals, and give that clear message. The more that happens, we can start scaling up. The investment, the whole capital stack is debt and equity now, and it's thrilling just to see how much the last year, there's going to be some big announcements in the rest of the year about how much is coming into LDES. This is going to help us scale. We've got to scale, and then talking about the trade-offs, what's going to push and pull to really get us that next stage? It's those frank conversations, it's strengthening our partnerships, setting those targets, and then continuing to push forward.
Cody Simms (41:57):
On the capital stack, that's a good area to dive into. 10 years ago, solar was a risky capital investment. Project finance on the debt side had to take up a little bit of risk, because the cost curves weren't fully known yet. Today, it's not risky at all. It's pretty clear what your ROIs are going to be on solar. It feels like energy storage is maybe at that 10 years ago point, from where solar was 10 years ago, in terms of there's so many of these different potentials out there, and it's unclear which ones are at full technology readiness level, which ones can be deployed today at scale, et cetera. How are you seeing the capital markets evolve around this, and where is risk capital involved? Where is more traditional banking and debt capital involved? And is there an evolution you expect to see?
Julia Souder (42:47):
I love this conversation, Cody, because the 10 years, you can all see that graph of just the prices coming out with solar. Well, guess what? It's going to be five for LDES. It's already happening. The conversations about just the traditional investors, and as you mentioned, the debt, the equity, are all coming into play. And insurance companies, warranties, they're showing up and being part of the deals, part of how to make this work. It's already changing, and now, I think it really just is the scaling up. There's so much money out there, it's just focusing and really making it work for LDES that then will pay benefit towards everything else.
Cody Simms (43:18):
And is most of this capital that has been in the solar and wind arena that's moving into this area, is it capital coming from what I would call traditional? Fossil fuel infrastructure has known how to do this kind of project financing for decades. And so, is it profit seeking capital that has funded traditional energy for years and years that is now recognizing the profitability over here in the LDES land? How are you seeing who's around the table evolving?
Julia Souder (43:46):
Cody, it's all of the above, which is exciting and also scary. And I think this is just one of those frank conversations we need to have, but I think there's been a lot of conversation about impact investing and ESG, but also just the reality of what does the renewable energy market look like? And it's not trying to take away from other pieces. It's just, again, maximizing, and really pushing it forward. There's hundreds of millions of dollars that we need to invest in this sector, and it really is the new industry. And so, I think that's why there's so many traditional and new players coming to the table, because they know it's something they have to do.
Cody Simms (44:18):
Well, Julia, I really appreciate your time, and having learned from you today, what should I have asked or what should we have talked about that we haven't discussed?
Julia Souder (44:26):
Why isn't everyone talking about LDES yet? You will soon. Hashtag LDES. It really is something that I think, it's so exciting, it's such a huge piece of it. It's not the only piece, but it's a critical piece for us all working together on really having a solution. I think we all get really nervous and scared, and almost push aside climate talk because it's just so much in our face. But I think what we're realizing is that we do have solutions, and we do have urgency to act, but we can do this together, and we can continue to educate and work on really implementing some positive change that we can all have benefits from.
Cody Simms (45:01):
It feels like you all need some kind of tagline that goes along with, "The sun isn't always shining, the wind isn't always blowing, but storage is always storing," or something like that.
Julia Souder (45:09):
24/7, LDES is here for you.
Cody Simms (45:13):
Awesome. Well, I appreciate your time today. Thanks for sharing with us, and good luck in the relatively new role you're in, and what sounds like an exciting few years ahead of you.
Julia Souder (45:23):
Yes, we're really thrilled. It's all about the duration: years, months, we have a lot going on, so stay tuned.
Cody Simms (45:28):
Thanks, Julia.
Julia Souder (45:29):
Thanks, Cody.
Jason Jacobs (45:30):
Thanks again for joining us on the My Climate Journey podcast. At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. If you'd like to learn more about MCJ Collective, visit us at MCJcollective.com. And if you have a guest suggestion, let us know that via Twitter @mcjpod.
Yin Lu (45:57):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ venture funds, be sure to subscribe to our newsletter on our website.
Jason Jacobs (46:06):
Thanks, and see you next episode.
