Studying the feasibility of long-duration energy storage in Chile

Chile’s energy storage ecosystem is growing, while much space exists to boost clean energy penetration during non-solar hours.

Opportunities seem robust, particularly given the abundant and cheap solar output available during the daytime, which storage systems can use to power up.

Today, lithium-ion battery technology dominates, and average injection duration is around four hours, while a few longer-duration projects have been proposed, the biggest being a US$1.4bn pumped storage system.

Question marks still hang over feasibility and configurations, drivers behind a long-duration energy storage research project recently launched by Universidad Adolfo Ibáñez’s (UAI) faculty of engineering and science and the higher education institution’s business school, along with technical counterpart generator EDF Chile.

To find out more, BNamericas conducted an email interview with Daniel Olivares, director of Centra, the energy transition center of UAI’s faculty of engineering and science.

BNamericas: Why was the research project launched?

Olivares: The project is part of the [knowledge-transfer] Industrial Research Chairs program (CII) of Centra-UAI, which aims to address questions from our industrial partners that require research and/or methodological innovation. This is precisely the case with the questions being asked by EDF Chile, which seeks to understand in detail the potential contribution of long-duration storage systems to the national electrical system and the barriers to their development within the current regulatory and market design of the sector.

BNamericas: What are the main objectives or goals?

Olivares: The main objective is to quantify the economic value that long-duration systems can bring to the Chilean electrical system. Next, it is important to analyze whether private investment in this type of technology can recover outlay through the existing market mechanisms in the national electrical system.

Finally, the goal is to generate a series of regulatory and/or public policy recommendations that facilitate the efficient development of such technologies for the benefit of all electricity consumers and the country’s decarbonization goals.

BNamericas: Is there a tentative schedule, that is, do you know when it will be ready? And will the results be available to the public?

Olivares: The CII projects have a minimum duration of one year, so the presentation of final results is expected in June 2025. However, our work schedule includes intermediate presentations of partial results, which should happen via a public seminar toward the end of January 2025.

BNamericas: The faculty will work with EDF Chile. What will be EDF’s role, or input?

Olivares: Our industrial partner, EDF Chile, will participate as the technical counterpart for all project activities, ensuring that modeling assumptions and decisions align with their practical understanding of the Chilean electricity market. Additionally, based on the experience of its parent company in France, EDF will provide relevant details to characterize the investment and operation of long-duration storage systems, in particular regarding pumped-storage plants, an area where they have a lot of experience.

BNamericas: We understand that the research has not yet been conducted, but are there any technologies already known to be particularly suitable for Chile, given its geography and the significant solar concentration in the north, for example?

Olivares: While it is difficult to predict specific results at this stage, Chile's potential for the development of seawater pumped storage reservoirs is already known in the electricity market, as well as the potential for thermal energy storage in molten salts, leveraging the enormous solar-thermal resource in the northern part of the country. It is expected that the greatest potential for developing such technologies will be in the central-northern and northern regions of the country, where long-duration storage systems can help modulate electricity production from solar energy, adjusting it to consumption profiles and transmission corridor availability.

BNamericas: The dominant technology in Chile today is lithium-ion batteries. Is this technology feasible, from a technical-economic perspective, for long-duration energy storage systems, or is it more suitable for ‘short’ duration solutions, like 1-5 hours, for example?

Olivares: Traditionally, battery energy storage systems, BESS, are considered for durations ranging from a fraction of an hour up to about 4-6 hours. This is not due to a technological limitation of BESS but rather because other technological alternatives, such as pumped hydro and thermal storage, start to become commercially viable for longer durations. However, given the low cost achieved in the development of BESS worldwide, with some sources indicating even US$100/kWh for a turnkey system, it is not yet possible to pinpoint the exact duration at which one technology becomes more advantageous than another.

BNamericas: Technically, could Chile have an electrical system based purely on renewables, storage, and solutions like synchronous condensers? Or will it be necessary to have some gas plants, which could later be converted to synthetic fuels, to provide stability?

Olivares: Technically, there are few doubts about the feasibility of having a system entirely based on renewable energies and storage, along with other components aimed at providing stability, such as synchronous condensers. The discussion is more about how quickly we can make this transition while ensuring an appropriate balance between the level of investment required, its impact on electricity rates, and meeting the established decarbonization goals, while also allowing sufficient time to address technical issues associated with the new mix of technologies in the system. 

It would be premature to say today whether gas plants converted for synthetic fuel use will have a role in the future electrical system. Certainly, the potential exists, but the numbers are still far from making it part of the efficient solution.