Projections of Levelized Cost Benefit of Grid-Scale Energy Storage Options

Abstract

The levelized costs of delivered energy from the leading technologies for grid-scale energy storage are calculated using a model that considers likely number of cycles per year, application-specific expected lifetime, discount rate, duty cycle, and likely trends in the markets. The expected capital costs of the various options evaluated — pumped hydrostorage, underground pumped hydrostorage (UPHS), hydrogen fuel cells, carbon-lead-acid batteries, advanced adiabatic compressed air energy storage (AA-CAES), lead-acid batteries, lithium-ion batteries, flywheels, sodium sulfur batteries, ultra capacitors, and superconducting magnetic energy storage (SMES) — are based on recent installation cost data to the extent possible. The marginal value of the delivered stored energy is analyzed using recent grid-energy prices from regions of high wind-energy penetration. Grid-scale energy storage is expected to lead to significant reductions in greenhouse gas (GHG) emissions only in regions where the off-peak energy is very clean. These areas will be characterized by a high level of wind energy with cheap off-peak and peak prices. At the expected price differentials, the only conventional options expected to be commercially viable in most cases are hydro storage, especially via dam up-rating, and UPHS. The market value of energy storage for short periods of time (under a few hours) is expected to be minimal for grid-scale purposes. Only low-cost daily storage is easily justified both from an economic and environmental perspective.