Dive Brief:

• Global long-duration energy storage deployments rose 49% in 2025, exceeding 15 GWh, according to Wood Mackenzie’s latest report on the subject, released yesterday. Ninety-three percent of cumulative installations are in China, driven by its strong national and provincial government support for technologies capable of economical discharge at maximum power for longer than four hours, according to the report.
• Compressed air energy storage (45%), thermal storage (33%) and vanadium redox flow batteries (21%) accounted for the largest shares of 2025 installation by technology. But long-duration storage, or LDES, comprises only 6% of total energy storage installations, WoodMac said.
• The outlook for long-duration storage is hazy, the report concluded. “Despite impressive installation growth last year, LDES technologies are caught in a strategic squeeze,” said Jiayue Zheng, managing consultant for energy storage at WoodMac, in a statement. “Lithium-ion batteries have captured the economically critical four to eight-hour storage market through superior cost and supply chain advantages, while the LDES lacks sufficient demand and pricing mechanisms to achieve commercial viability.”

Dive Insight:

Long-duration energy storage will be critical to achieving net zero goals, the report found, adding that the global average energy storage duration must increase from 2.5 hours to around 20 hours to maintain grid reliability while increasing intermittent renewable energy resources.

Currently, lithium-ion battery projects typically average about two hours of storage, while VRFB and CAES average about four hours and thermal storage around eight, it said. 

However, falling prices and robust supply chains mean lithium-ion batteries are becoming more competitive at longer durations. 

“The dramatic cost reductions lithium-ion achieved over the past decade will be difficult for emerging LDES technologies to replicate,” Priya Shrivastava, an energy storage supply chain researcher at Wood Mackenzie, said in a statement. 

Wood Mackenzie said it expects lithium-ion batteries to hold 85% share of energy storage through 2034, with VRFB and CAES capturing just 5% and 3% respectively.

Emerging LDES technologies are “better suited for multiday, multiweek and seasonal storage applications,” the report said. However, the multiday storage market is disadvantaged by “insufficient demand and absent pricing mechanisms” that require ongoing policy support, it said.

Interest from governments and private investors, including venture capital firms, drove a wave of investment in LDES technologies earlier this decade, but that wave has crested, WoodMac said. LDES deployments jumped 806% from 2023 to 2024 before last year’s more modest rise. 

The report “attributes the difficult investment environment to several factors, including persistently high interest rates that make long-payback LDES projects less attractive, intensifying capital competition from rapidly expanding AI data centres and grid infrastructure investments,” and greater competition from lithium-ion.

The report found overall funding for LDES fell 30% globally in 2025, excluding a nearly $1.8 billion commitment by the U.S. Department of Energy to Hydrostor, a Canadian company working to commercialize advanced compressed air energy storage systems. Venture capital investment fell by 72% globally, Wood Mackenzie said.

Despite an overall drop in investor interest, a few large-scale projects are moving toward commercialization in the U.S.

Hydrostor is one of three LDES companies to raise $1 billion or more since 2021, according to Wood Mackenzie. The other two are EOS Energy, which makes zinc-bromine batteries, and Form Energy, which makes iron-air batteries.

In December, the California Energy Commission issued its final approval for Hydrostor’s 500 MW/4 GWh Willow Rock Energy Storage Center. 

Hydrostor President Jon Norman told Utility Dive that the company plans to break ground on Willow Rock later this year after securing additional approvals from the federal government. 

The facility, which Hydrostor says is expected to run for 50 years, will store compressed air in caverns until it’s ready for discharge through a power-generating turbine system. Willow Rock is designed to deliver maximum power discharge for up to eight hours. 

Last month, Google and Xcel Energy said they would deploy Form Energy’s technology to support a data center the tech giant plans to build in Minnesota and 1.6 GW of grid-tied renewable energy it plans to pay for to offset the computing facility’s energy usage. 

The 300 MW/30 GWh deployment is “the largest battery project by gigawatt-hour energy capacity announced to date in the world,” Xcel said. Form’s batteries store and discharge energy by oxidizing and de-oxidizing iron particles in a process the company calls “reversible rusting.” They can discharge at maximum power for 100 hours.

Google is also working with a Milan-based company called Energy Dome to deploy CO2 batteries for its data centers. 

Meanwhile, some states, including California, have taken steps to either directly or indirectly support long-duration energy storage. 

In 2024, the California Public Utilities Commission said it would procure 1 GW of intraday energy storage and 1 GW of multiday energy storage as part of a broader solicitation of emerging low-carbon technologies. 

State clean energy requirements are also pushing utilities to explore long-duration energy storage options. 

Kevin Coss, a spokesperson for Xcel Energy, said in an email that the utility sees LDES as key to year-round compliance with a state law mandating 100% carbon-free power generation by 2040.

“Long-duration battery storage can help us maximize how we use renewable energy when we encounter extended periods of lower solar and wind generation,” Coss said. “We evaluated long duration storage resources in our last resource plan and plan to continue including this technology in our future resource plans.”