The Need

The ongoing global energy transition presents a significant challenge: integrating renewable energy sources while ensuring grid reliability and stability. As the penetration of wind and solar power increases, energy systems face growing intermittency issues and seasonal variability, necessitating scalable, long-duration energy storage (LDES) solutions.

Sumitomo SHI FW (SFW), a leader in energy innovation, sought to demonstrate the feasibility of its Liquid Air Energy Storage (LAES) technology in supporting decarbonization efforts. The company needed to:

• Quantify value by establishing empirical evidence for the role of LAES in energy markets.

• Identify market Integration opportunities for LAES participation in energy and ancillary service markets.

• Analyze optimal sizing of various LAES configurations based on renewable energy availability and demand patterns to ensure efficient integration and operation within the energy system.

• Assess economic viability and revenue potential under various electricity market conditions.

• Evaluate grid stability and efficiency and how LAES can reduce renewable curtailment and reliance on fossil fuel-based generation.

The SAInt Workflow

To address these needs, SFW partnered with encoord to utilize its Scenario Analysis Interface for Energy Systems (SAInt), an advanced energy planning tool that enables integrated modeling of energy systems.

Energy Market Model-Ready Datasets

encoord’s market and data experts have developed model-ready datasets for various energy markets, offering customers like SFW a foundation from which to build their own market models based on their specific assumptions. These datasets cover markets in Europe, India, and Western Australia, providing valuable insights for LAES integration.

Scenario-Based Assessments

SAInt provides a flexible modeling environment that can optimize and simulate both current and future market and grid conditions. SFW has leveraged SAInt to develop multiple future energy scenarios across different markets, focusing on:

• Planning for long-term investments through capacity expansion modeling.

• Analyzing the effects of different levels of renewable energy penetration on market dynamics and LAES dispatch under future scenarios.

• Evaluating the impact of varying LAES fleet configurations on system performance.

• Assessing the influence of CO₂ pricing and ancillary service market regulations.

Operational and Financial Insights

The studies provided a data-driven evaluation of:

• LAES contributions to capacity reserves and ancillary services.

• Its role in replacing natural gas-fired generation during peak demand periods.

• System-wide effects on electricity costs and carbon emissions.

By leveraging SAInt’s modeling capabilities, encoord enabled SFW to assess the operational and financial benefits of LAES integration in different markets. This has supported informed decision-making for future development of LAES.

The Value

Our initial collaboration with SFW evaluated the integration of LAES in the European market. The study established a compelling case for LAES as a critical element in in the Spanish and German energy markets, providing significant potential benefits:

• Reduction in Renewable Curtailment: LAES can decrease wasted wind and solar generation by over 40%, improving grid efficiency.

• Lower Carbon Emissions: LAES can contribute to an estimated 21% reduction in CO₂ emissions, supporting decarbonization objectives.

• Decreased Dependence on Natural Gas: By providing firm capacity, LAES can reduce natural gas consumption for power generation by 25%.

• Operational Cost Savings: The use of LAES can lead to a 19% decrease in system operating costs, increasing the economic efficiency of renewable energy integration.

SAInt’s advanced modeling plays a crucial role in advancing long-duration energy storage by providing regulators with data to shape supportive policies, offering investors confidence through economic projections, and helping utilities deploy storage solutions for enhanced grid stability and renewable integration. As energy systems evolve, SAInt continues to be a key tool for guiding investment, policy, and infrastructure decisions.