- Article
As power systems across North America face growing pressure from rising electricity demand, increasing shares of renewable energy, evolving resilience requirements, and growing geopolitical uncertainty, the need for long-duration energy storage (LDES) is becoming more evident. Together, these trends are accelerating a shift away from single-technology solutions and toward more diversified portfolios, creating a clear role for technologies such as liquid air energy storage (LAES).
Power systems across North America are under new pressures. Energy demand is growing, driven by electrification and emerging applications such as data centers, while the adoption of renewable energy continues to accelerate. In parallel, evolving resilience requirements are reshaping how grid reliability is defined. It is no longer sufficient for systems to manage routine fluctuations; they must now withstand extreme weather events, supply disruptions, cyber threats, and prolonged periods of stress.
These changing expectations are increasing the value of flexibility, dispatchability, and the ability to sustain energy delivery over extended durations – capabilities that conventional short-duration storage solutions alone cannot fully provide. Together, these developments are exposing the limitations of current power systems that were historically designed around predictable demand patterns and dispatchable fossil-based generation.
As these pressures grow, it is becoming clear that existing solutions are not sufficient on their own. Short-duration storage, such as lithium-ion batteries, plays an important role in balancing the grid over shorter timeframes, but it is not designed to address longer periods of imbalance between supply and demand. In systems with increasing shares of renewable energy, this creates a gap that needs to be addressed over hours or even days.
From Single Solutions to System Design
Instead of looking for a single technology to meet all storage needs, system operators and utilities are increasingly taking a broader, system-level approach.
As Eric Culkin, Director of Sales and Commercial at Sumitomo SHI FW, explains: ”They want all the megawatts they can get.” In practice, this means combining multiple technologies to ensure reliability, flexibility, and resilience across different timescales and use cases.
This shift also reflects a growing awareness of concentration risk. Relying too heavily on any single technology, particularly lithium-ion batteries, can create vulnerabilities, whether related to performance limitations, supply chains, or broader system stability.
“Lithium-ion batteries won’t solve all the problems. There needs to be something more.”
“Nobody really wants to put all their eggs in one basket,” continues SFW’s Director of Global Market Development, Jan Andersson.
As a result, diversification is becoming a key principle in grid planning. Short-duration storage is increasingly being positioned as one element within a broader portfolio of technologies, with long-duration energy storage emerging as a complementary layer to balance the system over longer periods and support overall grid stability.
Liquid Air Energy Storage: Aligning with System needs and Market Realities
LAES offers a compelling solution to the challenges facing modern power systems, combining long-duration capability with proven, scalable technology.
Proven and moving into deployment
LAES is transitioning from demonstration to real-world implementation. Through its parent company, Sumitomo Heavy Industries (SHI), SFW has a LAES reference plant in Hiroshima, Japan. In the UK, SFW is developing together with its technology partner Highview Enterprises Limited developing the Carrington project, while additional projects such as Hunterston demonstrate that the technology is moving into deployment at scale.
Built on mature, established technology
Rather than relying on novel components, the LAES system is based on industrial equipment that has been used for decades, including compressors, heat exchangers, turbines, and generators. This contributes to a lower perceived technology risk and enables the use of existing industrial expertise for operation and maintenance.
Delivering system-level value
Beyond storing energy, LAES contributes to overall grid performance. It provides stability services such as inertia and voltage support, helps manage congestion, and enables transmission deferral. Unlike other storage technologies, LAES is not dependent on specific geological conditions, allowing it to be deployed in a wide range of locations with a relatively small footprint. This flexibility supports more efficient grid planning and enables deployment closer to where it is needed.
Supporting diversification and energy security
As storage portfolios expand, diversification is becoming increasingly important. LAES provides an alternative to battery-dominated solutions, while reducing exposure to global supply chain dependencies and geopolitical risks.
Creating local and lifecycle value
LAES projects can be built using standard industrial components, enabling higher local content and supporting workforce transition. They also create long-term employment across the project lifecycle, while relying on widely available and recyclable materials.
From Policy to Procurement: LDES in North America
Across North America, long-duration energy storage is moving from policy ambition to active procurement. New market mechanisms are being introduced to bring LDES technologies into the grid at scale.
This shift is being driven not only by system needs, but by how markets are being structured.
For long-duration storage to take off, you need both market-based and policy-driven incentives.
In Canada, Ontario is currently advancing a procurement process designed to encourage a more diverse and resilient energy mix, including long-duration storage.
“Ontario is a good example of how to incentivize long-duration storage and grid diversity,” says Culkin. “The procurement framework they are using helps support stability, security, and diversity within the grid.”
Similar developments can be seen in the United States. New York’s Bulk Energy Storage program includes dedicated pathways for non-lithium-ion technologies, while additional procurement models are being explored in states such as California and Massachusetts. Virginia, meanwhile, passed legislation in April 2026 establishing legally mandated targets for long-duration energy storage.
These procurement frameworks are not only enabling deployment, but they are also shaping how technologies are evaluated. In Canada, for example, there is a growing emphasis on local content and Indigenous participation, with requirements around community involvement, workforce development, and regional economic impact. This means that beyond technical performance and cost, projects are increasingly assessed on their ability to deliver broader social and economic value.
This shift favors technologies that can combine proven performance with flexible deployment and the ability to deliver local and system-level value, making solutions such as liquid air energy storage particularly well aligned with North American needs.
SFW Delivers Long-Duration Energy Storage at Scale
Sumitomo SHI FW brings the financial strength and project delivery experience required to take long-duration energy storage from concept to implementation. As part of the Sumitomo Heavy Industries Group, the company combines access to LAES technology with a long track record in delivering complex energy infrastructure worldwide.
“We have been around 100 plus years under the Foster Wheeler name,” says Eric Culkin.
“And we intend to be here for many decades to come,” adds Jan Andersson.
“For projects like LAES, designed to operate for 30 or 40 years, you need that assurance of support throughout its lifetime.”
SFW’s heritage, together with a strong balance sheet and long-term continuity, supports the bankability of large-scale projects. SFW also provides lifecycle services to ensure reliable long-term performance.
“We don’t just deliver projects, we’re also there to help make sure they run"