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

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.