As the global energy transition accelerates, the intermittency of renewable generation is emerging as one of the power sector’s most pressing bottlenecks. Solar and wind now account for a growing share of electricity supply, yet their variability threatens grid stability and risks costly curtailment or blackouts. While lithium-ion batteries have dominated the short-duration storage market and pumped hydro remains the incumbent for longer periods, a quieter but increasingly credible alternative is gaining traction: liquid air energy storage (LAES).
In the unassuming village of Carrington, north-west England, Highview Power is breaking ground on what it claims will be the world’s first commercial-scale LAES facility. Scheduled for phased commissioning from 2026, the plant will eventually deliver 50 MW of power and 300 MWh of storage — enough, the company says, to meet the peak needs of approximately 480,000 homes for six hours.
The principle is elegantly thermodynamic. Surplus grid electricity is used to compress and cool ambient air to –190°C, liquefying it and reducing its volume by a factor of 700. The cryogenic liquid is stored at low pressure in insulated tanks. When power is required, the liquid is pumped to high pressure, regasified using ambient or waste heat, and expanded through a turbine to generate electricity. The working fluid — ordinary air — is then released back into the atmosphere. Round-trip efficiency is currently in the 60-70 per cent range, but the system’s capital cost per megawatt-hour of storage is strikingly competitive.
According to analysis cited in the original research, the levelised cost of storage (LCOS) for LAES can fall as low as $45/MWh over a 40-year plant life — significantly below the $120/MWh typical for new pumped hydro and $175/MWh for four-hour lithium-ion systems. Critically, LAES suffers minimal degradation over time, requires no rare-earth materials or geographically constrained reservoirs, and can be sited close to demand centres.
Highview’s chief executive, Richard Butland, argues that the technology fills a sweet spot between the four-to-eight-hour duration at which lithium-ion economics begin to deteriorate and the multi-day or seasonal storage that remains prohibitively expensive with most alternatives. “We are rebuilding grids around a new generation mix,” he told the BBC. “That will require a portfolio of storage durations, and long-duration solutions will be a big part of it.”
The economic case, however, is not yet unequivocal. Research published earlier this year by MIT chemical engineer Dr Shaylin Setya found that, under current U.S. market structures, LAES projects in most regions would struggle to recover costs over 40 years without policy support. Only in aggressively decarbonised scenarios in high-volatility markets such as Texas and Florida did the technology appear viable on a merchant basis. The core problem: insufficient price spreads in many grids to reward arbitrage in the early years of deployment.
Dr Setya’s conclusion is instructive. “None of the storage technologies we examined — not pumped hydro, not batteries, not liquid air — are strongly profitable today without subsidies,” she notes. “But for bulk, long-duration storage, liquid air is among the most cost-effective options available.”
That nuance explains why developers are looking to governments rather than purely merchant revenue. Initial capital subsidies, capacity payments, or contracts-for-difference on availability could bridge the gap until renewable penetration drives the volatility — and therefore the arbitrage opportunity — that makes long-duration storage bankable.
Highview is not alone. China commissioned a 100 MW/400 MWh LAES demonstration project in 2024, and several European utilities are running feasibility studies. With lithium-ion supply chains under pressure and geopolitical risks surrounding cobalt and nickel, the absence of critical minerals gives LAES a strategic edge.
Investors in the energy-transition space have taken note. The Carrington project has already secured hundreds of millions in commitments, and Highview expects to announce further gigawatt-scale schemes in Britain and abroad within the next 18 months.
For all its promise, LAES is not a silver bullet. Round-trip efficiency remains lower than lithium-ion, and the technology has yet to prove itself at true commercial scale. Yet as grids strain under the weight of ever-higher renewable shares, the hunt is on for affordable, scalable, long-duration storage that can be deployed anywhere. On the evidence so far, liquid air — once dismissed as a thermodynamic curiosity — is emerging as a serious contender in that race.
