Assessing New Electricity Rate Structures to Support LDES systems that operate for 8 or 12 hours

Aspen will support the California Energy Commission in evaluating and validating new revenue pathways and financing models designed to enable the deployment of long-duration energy storage systems that provide 8 to 12 hours or more of continuous service to the state’s electrical grid. The work focuses on moving beyond the current industry standard of four-hour storage by identifying economic structures that properly value the unique grid services these longer-duration systems provide, such as extended reliability, resilience, and capacity during multi-hour peak events or prolonged renewable intermittency. This effort is foundational to creating fair and sustainable payment mechanisms that reflect the true economic value of long-duration storage, enabling broader commercial adoption and integration. The project will inform the CEC’s collaboration with the California Public Utilities Commission and the California Independent System Operator to modernize the state’s energy storage compensation frameworks, ensuring future regulatory and market rules accommodate emerging LDES technologies. The results will directly influence the design of new rate structures and incentive programs that make long-duration storage financially viable and attractive to investors and developers. The work will be conducted primarily in Sacramento, California, with primary contact from the Energy Commission’s Senior Engineer Michael Gravely and Aspen’s Project Manager Tom Murphy, and is part of a broader strategic push to future-proof California’s electricity infrastructure for deep decarbonization and grid stability.