Executive Summary
Liquid air energy storage (LAES) stores energy by liquefying air at cryogenic temperatures (~−196°C), holding it in insulated tanks, and then revaporizing and expanding it through turbines when power is needed. Unlike pumped hydro and compressed air, LAES is largely geography-agnostic: it can be sited near load centers or industrial clusters. Highview Power and other developers are commercializing large-scale LAES plants targeting 6–20+ hour durations. The key question for planners is where LAES sits in the long-duration storage (LDES) cost and performance landscape relative to batteries, CAES, and thermal or hydrogen options.
- Early commercial LAES projects suggest projected LCOS in the range of 120–200 USD/MWh discharged for 8–12 hour durations in 2025–2027, with potential to fall below 100 USD/MWh as plants scale and waste-heat integration improves.
- LAES delivers site flexibility and industrial integration opportunities (use of low-grade waste heat or cold), but suffers from moderate round-trip efficiency (RTE typically 50–65% in practice) and sizable CAPEX per kW.
- Where constrained grids need long-duration capacity close to load, and where by-product heat or cold is available, LAES can be competitive with extended-duration batteries and some CAES concepts, especially when non-energy benefits (e.g., grid connection deferral, resiliency, industrial symbiosis) are valued.
- Energy Solutions scenarios to 2035 position LAES as a targeted solution in a small but important subset of markets—particularly dense urban grids and industrial clusters without geologic options for CAES or pumped hydro.
What You'll Learn
- LAES Basics: Process Overview and Key Components
- Benchmarks: Performance, Efficiency, and Cost Drivers
- Integration with Waste Heat and Cold Sources
- Economics: CAPEX, OPEX, and LCOS vs Other LDES
- Case Studies: Early LAES Plants and Industrial Hubs
- Global Perspective: Markets and Policy Drivers
- Devil's Advocate: Risks, Complexity, and Competition
- Outlook to 2030/2035 in LDES Portfolios
- Step-by-Step Guide for Developers and Offtakers
- FAQ: LAES Technology and Project Structuring
LAES Basics: Process Overview and Key Components
LAES systems use off-peak electricity to drive air liquefaction, typically via multi-stage compression, intercooling, expansion, and Joule–Thomson throttling. The resulting liquid air is stored at near-atmospheric pressure in insulated tanks. During discharge, the liquid air is pumped to higher pressure, warmed (often with ambient or waste heat), vaporized, and expanded through turbines to generate electricity. The process resembles a cryogenic peaker plant, with charge and discharge trains separated in time.
Methodology Note
Energy Solutions synthesized data from vendor disclosures, demonstration projects, and academic studies to construct performance and cost benchmarks. LCOS estimates reflect 2025–2027 technology assumptions, moderate integration with waste heat, and realistic duty cycles (100–250 full-cycle equivalents per year). All figures are indicative and should be adapted to local cost and resource conditions.
Benchmarks: Performance, Efficiency, and Cost Drivers
Representative LAES Performance Metrics (Utility-Scale)
| Metric | Typical Range | Notes |
|---|---|---|
| Rated power | 50–200 MW | Scalable via modular trains and tank capacity |
| Storage duration (full power) | 6–20 hours | Determined by liquid air tank volume and process design |
| Round-trip efficiency (AC-AC) | 50–65% | Higher with high-quality waste heat integration |
| Start time | 5–15 minutes | Comparable to conventional gas turbines |
| Expected plant life | 30–40 years | Cryogenic tanks and turbomachinery sized like LNG and peaker assets |
Indicative CAPEX Breakdown (Turnkey, 2025 USD)
| Component | CAPEX Share | Key Drivers |
|---|---|---|
| Charge train (compression & liquefaction) | 35–45% | Compressor trains, cold box, expanders, intercoolers |
| Storage tanks & insulation | 15–25% | LNG-like double-wall tanks, foundations, boil-off control |
| Discharge train (pumps, vaporizers, turbines) | 20–30% | High-pressure pumps, heat exchangers, turboexpanders |
| Balance of plant & grid connection | 15–25% | Transformers, switchgear, control system, civils |
Illustrative CAPEX Distribution for a 100 MW / 800 MWh LAES Plant
Integration with Waste Heat and Cold Sources
LAES performance improves significantly when integrated with external heat and cold sources. During discharge, liquid air must be warmed and vapourized; access to low-grade waste heat from industrial processes or power stations boosts RTE and output. Conversely, the cold from regasification can be used for refrigerated warehouses, LNG regas, or data center cooling.
Potential Integration Synergies
| Partner Asset | Role in LAES | Indicative Benefit |
|---|---|---|
| CCGT or industrial CHP | Provides low/medium-grade waste heat for revapourization | +5–10 percentage points RTE improvement |
| Cold warehouses or data centers | Utilize cold from regas; reduce mechanical cooling loads | Additional value streams; higher overall system efficiency |
| LNG terminals | Synergy between LNG regas and liquid air cycles | Mutual CAPEX and energy savings if co-located |
Economics: CAPEX, OPEX, and LCOS vs Other LDES
From an economic perspective, LAES competes with extended-duration lithium-ion, CAES, flow batteries, and pumped hydro where available. LCOS is influenced by CAPEX per kW, round-trip efficiency, utilization (cycles per year), and any additional value from heat/cold integration.
Illustrative LCOS Ranges for 8–12 Hour LAES (2025–2027, 2025 USD)
| Scenario | LAES LCOS (USD/MWh discharged) | Key Assumptions |
|---|---|---|
| Base case (no strong synergies) | 140–190 | RTE 50–55%, moderate CAPEX, 150 cycles/year |
| With waste heat integration | 120–170 | RTE 55–60%, similar CAPEX, 180–220 cycles/year |
| Future scale case (~2030, learning) | 90–140 | CAPEX reductions, higher utilization, optimized integration |
LAES vs Other LDES: Indicative LCOS Comparison
Practical Tools for Evaluating LAES Projects
You can use the following tools to compare LAES options with alternative storage and generation technologies:
- LCOE Calculator – to benchmark dispatch costs against gas peakers, batteries, and other LDES.
- LCOS Calculator – to test how CAPEX, RTE, and utilization assumptions shift LAES LCOS relative to other options.
Case Studies: Early LAES Plants and Industrial Hubs
Case Study: 50 MW / 300 MWh LAES Plant near Urban Load Center
Context
- Location: Densely populated urban grid with limited space for pumped hydro or large batteries.
- Role: Provide long-duration flexibility, peak shaving, and backup near critical substations.
Design Highlights
- Modular LAES plant sited on brownfield industrial land.
- Integration with nearby industrial waste heat source to boost RTE.
Economics (Illustrative)
- CAPEX: ~1,700–2,200 USD/kW (turnkey, including grid connection).
- LCOS: ~130–180 USD/MWh, depending on cycles per year and heat synergies.
- Value Stack: Capacity payments, energy arbitrage, network deferral, and resilience value.
Case Study: LAES Integrated with LNG Import Terminal
Context
- Location: Coastal power hub with LNG regasification facilities.
- Role: Capture synergies between LNG cold and LAES cryogenic cycle.
Design Highlights
- Shared cold box and integrated heat exchangers between LNG and liquid air loops.
- Potential reduction in overall energy consumption for regas and storage.
Economics (Conceptual)
- CAPEX: Higher absolute cost but reduced incremental cost vs stand-alone LAES + LNG plants.
- LCOS: Potentially downshifted vs standalone LAES due to shared infrastructure.
Global Perspective: Markets and Policy Drivers
LAES is particularly interesting for countries with strong decarbonization targets, land constraints, and dense urban grids—such as parts of the UK, Japan, and some European and Asian cities. Policy frameworks that value firm low-carbon capacity and grid resilience, not just kWh shifting, are essential to unlock LAES investments.
Devil's Advocate: Risks, Complexity, and Competition
Technology and Project Complexity
- LAES plants resemble a combination of LNG terminals and peaking plants, requiring expertise in cryogenics, turbomachinery, and grid integration.
- Project schedules can be longer than modular batteries due to custom engineering and site-specific integration.
Competition from Other LDES Options
- Flow batteries, CAES, hydrogen, and thermal storage are also targeting 8–20 hour durations, often with different siting constraints and cost structures.
- Extended-duration lithium-ion remains a strong competitor for durations up to 8–10 hours where siting allows and safety concerns are manageable.
Outlook to 2030/2035 in LDES Portfolios
By 2035, we expect LAES to represent a modest share of global LDES capacity, but with high strategic importance in a few key nodes—densely populated grids and industrial clusters where geographic and geologic constraints limit other options. Hybrid configurations (e.g., LAES + batteries or LAES + hydrogen) may emerge to provide multi-timescale flexibility.
Step-by-Step Guide for Developers and Offtakers
1. Define the Role of LAES in the Portfolio
- Is the focus on capacity adequacy, intraday flexibility, resilience, industrial integration, or a combination?
- Model duration and performance requirements under high-renewables and stress scenarios.
2. Screen Sites for Integration Synergies
- Identify candidate sites near waste heat producers, cold users, or LNG terminals.
- Assess grid connection capacity, land availability, and environmental constraints.
3. Compare LAES with Alternative Technologies
- Perform LCOS and system value comparisons against flow batteries, CAES, hydrogen, and extended-duration lithium-ion.
- Account for non-energy benefits: siting flexibility, resilience, industrial co-benefits.
4. Structure Contracts and Revenue Stacks
- Seek combinations of capacity payments, offtake contracts, and grid services revenues to reduce merchant risk.
- Align contract terms with asset life and financing structures.
5. Plan for Operations, Maintenance, and Upgrades
- Ensure sufficient O&M capabilities in cryogenics, turbomachinery, and digital controls.
- Plan for incremental upgrades as process components improve.
FAQ: LAES Technology and Project Structuring
Frequently Asked Questions
1. How does LAES differ from CAES in practice?
LAES stores energy in liquid air at atmospheric pressure in insulated tanks, while CAES stores compressed air in underground caverns. LAES is more flexible in siting but typically has higher round-trip losses and CAPEX per kW. CAES can be more efficient in suitable geology, but is constrained by subsurface conditions.
2. Is LAES considered a mature technology?
LAES leverages mature components from LNG, industrial gas, and peaking plant sectors, but the integrated storage application is still at an early commercial stage. Bankability improves as more plants operate and performance data accumulates.
3. Can LAES provide fast-response grid services?
LAES plants can ramp relatively quickly (minutes rather than seconds), making them suitable for capacity and some balancing products, but they do not typically offer the ultra-fast response of batteries for primary frequency response.