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Liquid Air Energy Storage Emerges as a Viable Alternative to Lithium-Ion for Grid-Scale Storage

A new study by MIT and NTNU highlights Liquid Air Energy Storage (LAES) as a promising and cost-effective solution for long-term energy storage. LAES works in three steps: air is cleaned and cooled into a liquid using electricity, stored in insulated tanks, and later reheated to run turbines that generate power. This system is environmentally friendly, using only air and electricity, and relies on widely available equipment—making it suitable for industrial and grid-level applications.

Researchers assessed its economic potential by analyzing real energy market data and modeling performance across 18 U.S. regions. They found that a 100 MW LAES system would be profitable only under full decarbonization by 2035, especially in southern states like Texas and Florida. LAES becomes more viable when energy demand for storage is high, and weekly storage is more cost-effective than monthly storage.

LAES stands out for its low storage cost of $60/MWh, making it three times cheaper than lithium-ion batteries and more reliable, as it doesn’t degrade over time. Profitability can improve further through capital subsidies (40–60%) and by integrating LAES with industrial facilities.

This study shows LAES could become a key player in clean energy systems—especially with strong decarbonization policies and the right market conditions.