Long-duration storage in the Australian NEM: A security- and reliability-constrained evaluation

Lithium-ion batteries, typically deployed as short-duration storage, have been effective in addressing intraday volatility and evening peaks, particularly in solar-rich regions. Their cost structure and market rules have reinforced this role, favouring short-duration applications over extended storage. However, growing electrification of heating and increased weather variability are leading to extended winter peaks and multi-day renewable shortfalls, frequently observed in Australia’s southern regions. These challenges, also faced globally in isolated, weakly interconnected, or variable renewable energy source-reliant grids such as Ireland, highlight the limitations of short-duration storage. This paper develops a security-constrained integrated system planning (SC-ISP) framework that co-optimises generation and storage investment while explicitly enforcing RoCoF, frequency nadir, and quasi-steady-state constraints under an N - 1 contingency criterion. Liquid air energy storage (LAES) is modelled with asymmetric charge-discharge blocks and inertia provision, and its system value is compared with battery energy storage systems (BESS) and pumped hydro energy storage (PHES) in a 2040–41 South Australian case study. Results show that short-duration BESS remains cost-effective under high intraday renewable volatility, whereas long-duration technologies are favoured under extended renewable drought conditions. LAES becomes competitive with PHES and BESS when capital costs decline by approximately 20–30%, particularly under stricter reliability thresholds and higher demand growth.