Core Viewpoint - The energy storage sector is likely entering an era of long-duration energy storage competition, driven by policies and market demands as renewable energy generation exceeds 20% of the energy mix, necessitating storage durations of 4 hours or more [1][2]. Policy and Market Developments - Multiple policies have been introduced to promote long-duration and new energy storage technologies, including requirements for renewable energy projects to incorporate 4-hour peak-shaving capabilities [2][3]. - The National Energy Administration's 2025 Energy Work Guidance emphasizes the innovation and strategic layout of long-duration energy storage technologies [2]. Current Market Dynamics - As of 2024, China's renewable energy generation is projected to reach 3.46 trillion kWh, accounting for approximately 35% of total generation, yet the average storage duration for new energy storage projects is only 2.3 hours [1]. - The demand for long-duration storage is expected to shift towards grid-side and user-side solutions due to ongoing issues with wind and solar energy curtailment [4]. Future Projections - By 2025, the long-duration energy storage market in China is anticipated to grow rapidly, with projections indicating that the share of storage systems lasting over 4 hours will increase to 21% by 2025 and 50% by 2030 [4]. - The cumulative installed capacity of long-duration energy storage in China is expected to reach approximately 230 million kW by 2030 [5]. Global Trends - The global consensus is shifting towards the necessity of long-duration energy storage, with examples from California demonstrating its effectiveness in managing peak demand [6][7]. - The average storage duration in the U.S. is currently 3.3 hours, while China's is 2.1 hours, indicating a need for improvement in storage capabilities [8]. Technology and Cost Analysis - Different energy storage technologies are suited for various applications, with pumped hydro storage currently dominating the market due to its maturity and cost-effectiveness [9][10]. - Initial investment costs for energy storage technologies vary significantly, with lithium-ion batteries being the most cost-effective at 500 RMB/kWh, followed by compressed air storage at 1,250 RMB/kWh, and vanadium flow batteries at 2,000 RMB/kWh [11][12]. Competitive Landscape - The competition between compressed air storage and vanadium flow batteries is intensifying, with compressed air storage currently having a lower levelized cost of electricity (LCOE) [14]. - The integration of different storage technologies, such as combining flow batteries with lithium iron phosphate batteries, is becoming more common to leverage the strengths of each technology [14]. Industry Challenges - Both compressed air storage and flow batteries face challenges in terms of efficiency and commercialization, with the need for further technological advancements to enhance system efficiency and reduce costs [16][17].