The Next Big Bet in Long-Duration Energy Storage

And Why Chase a Market That Barely Exists

Betting on battery technology that fills the gap beyond four hours is hot. But how big is gap the LDES is trying to fill?

At RENERA, we spent an unreasonable amount of time obsessing over a single number: the dollar-per-kWh curve for our NMC cells, ten years out. Every strategic decision — which line to build first, which customer to prioritise, how much capacity to commit to before we had a signed contract — came back to where that curve would be relative to everyone else's. I still think in those curves. So when I look at the current wave of capital chasing long-duration energy storage — iron-air, thermal, compressed air, gravity, sodium-ion pitched as "beyond lithium" — the first question I ask isn't whether the tech works, because most of the time, it does. Instead, I look at whether the market these companies are underwriting is the size they think it is.

I don't think it is. Not yet, and maybe not for a while. But the reason is more interesting than "LDES is overhyped," and it might just say something useful about how to place a bet in this space.

Start with what lithium-ion is about to do to everyone's assumptions

Bloomberg NEF's own storage outlook has BESS deployment growing roughly fifteenfold by 2030. I'd treat that as a floor rather than a ceiling. Solar deployment forecasts have been wrong in the same direction for over a decade — every major forecaster has under-called PV growth, year after year. Storage is now riding the same curve, for the same reason: it is overwhelmingly the same manufacturing base, the same Chinese supply chain, and increasingly the same customers deciding to co-locate storage with generation as a default.

The price data already shows where this goes. China is bidding turnkey BESS systems into large auctions at $59/kWh today. By 2030, I'd expect turnkey LFP BESS pricing in China to sit at $50–60/kWh, once the current overcapacity finishes working through the system.

Western grids, meanwhile, are still absorbing batteries at $150–320/kWh — a gap that has nothing to do with cell chemistry and everything to do with balance-of-system costs, financing terms, import tariffs and restrictions, and interconnection queues.

That gap will close. It always does. And when it does, the four-to-eight-hour segment — the one that covers daily solar shifting and the evening peak — will get even more thoroughly owned by lithium-ion.

The 8-hour-plus segment is smaller than the pitch decks suggest

This is where I think the LDES narrative gets ahead of itself. The LDES Council's own numbers put cumulative global capacity at or above 8 hours at 119 GW in 2025, growing to 222 GW by 2035. McKinsey, ever the optimists, view the whole above-8-hour segment reaching 1.5–2.5 TW by 2040. Either way, you're looking at a segment that today represents well under 10% of storage demand — and one where pumped hydro already covers more than 90% of what currently exists.

Grids simply don't need multi-day discharge very often, even when they are running mostly on renewables. South Australia runs on 70% solar and wind, and doesn't require more than 8 hours of storage, all met by lithium-ion. Modelling for conservative scenarios, it puts maximum storage requirement at just over 7 GW.

The realistic call on true long-duration storage is something like ten discharge days a year — the odd wind drought, the odd extended cold snap, the days capacity markets are designed to protect against. It is not, on its own, a market that supports the number of well-funded LDES companies currently racing to serve it.

Iron-air is the most aggressive on cost — which is why it's winning capital

Pumped hydro is the only technology that has convincingly done multi-day storage at scale, and it is permanently constrained by geography and by build times measured in decades. Everything else in the 8-hour-plus category is really answering one question: can you get close enough to pumped hydro's economics without needing a mountain and a river?

Iron-air is currently pretending to be the closest. I am saying "pretending" because the technology hasn't yet proved itself at scale. The projected capex, somewhere around $20/kWh at scale, has pulled Form Energy from pilot to actual offtake commitments: 30 GWh with Google and Xcel Energy, and a further 12 GWh with the data-centre developer Crusoe. Deliveries are promised in 2027. Round-trip efficiency is estimated in the 50–70% range. Cost per kWh at 100 hours is the only number that matters, and right now iron-air is the only chemistry pricing itself below where a gas peaker plus fuel would land.

Thermal, compressed air and gravity are fighting for a shrinking window

Thermal storage could become the cheapest category on a raw kWh-thermal basis — $24–132/kWh today, heading toward $20–82/kWh by 2030. But that number is good only when the output stays as heat. The moment you round-trip thermal storage back to electricity, you reintroduce a turbine and losses, and the economics stop looking special.

Compressed and liquefied air sits in a similar place: it took the largest share of 2025's new LDES deployment, dominated by China, but round-trip efficiency of 53–72% and capex still around $158–471/kWh make it a harder sell against both lithium-ion at the short end and iron-air at the long end.

Run the numbers that matter to an investor rather than an engineer, and the picture gets tighter still. Thermal, CAES and gravity systems are currently landing around $40–50/kWh at the pack or module level — which sounds competitive, until you price in the balance-of-plant costs that push system-level pricing to $60–70/kWh. At that point, you are no longer competing against pumped hydro or a gas peaker. You are competing against LFP, which has a manufacturing base measured in hundreds of GWh, and doesn't ask a grid operator to bet on a technology with a handful of reference plants.

That is the trap in this category. Most of these technologies were conceived to beat lithium-ion at duration. Several of them are now on a cost curve where they'll arrive at scale roughly level with where lithium-ion already is. At which point duration alone won't be enough to win the contract.

What I'd underwrite

If I were sizing a bet in this space today, I would be asking three things:

1. Does the projected cost curve survive contact with a real supply chain rather than a lab demonstration;

2. Does the technology have a duty cycle where its weaknesses — low round-trip efficiency, slow response, geographic constraints — genuinely don't matter to the customer;

3. Is there a buyer, now signing multi-day offtakes that utilities never would, and they are paying for reliability rather than trying to play the energy markets for arbitrage?

Iron-air currently clears all three, but is unproven. Most of the rest of the category clears one or two.

None of this makes long-duration storage a bad category. It makes it a narrow one, with a real but bounded prize, currently being chased by more capital and more technologies than the underlying demand can support. The companies and investors who do well here will be the ones who size the market honestly before they pick a horse.

But I would still bet on a gas peaker.

If you're on the investor side of this — looking at the LDES startup deck with a $20/kWh number you can't yet independently stress-test, or trying to work out which of three competing chemistries actually survives a real procurement cycle rather than a press release — that diligence is exactly the kind of work I do with investors deciding where to place their next bet.