Why energy storage is so expensive?
There are several energy storage methods, and all of them are expensive, because of enormous initial investment costs due to increasing raw materials cost such as lithium(BESS), the cost of advanced new technology (Hydrogen), and construction costs (CAES, PSH). I can divide energy storage methods into groups.
The first group gathers methods with substantial initial investment costs and low operating costs (high CAPEX/low OPEX), a lifetime of 30+ years these are:
- Pumped hydro-power storage
- Compressed air energy storage
- Bidirectional Hydrogen with fuel cells
Second group methods have moderate CAPEX per kWh and moderate OPEX, a lifetime of 10-15 years :
- LFP Batteries
- Vanadium RF Battery Storage
Third group methods are technologies with lower CAPEX and lower OPEX, but with a lifetime of 3-7 years:
- Lead-Acid battery
- Sodium-Sulphur battery
- Zinc-ion battery
In 2022 at Intersolar Europe (ICM München) I was very surprised by Scandinavian zinc-ion cells Enerpoly. It is much cheaper than LFP, by BMS system lifetime may lengthen, it can be an important energy storage method in the short future.
Will energy storage price increase?
Yes, energy storage (BESS) will increase in price in a short term, energy storage increase in price is caused by the inflation and increasing electrochemical cells demand. Increase in the demand for cells is due to:
- residential and commercial energy storage growing popularity
- EV manufacturing increase
- low number of cellsproducers
- utility energy storage projects growth
CAES, Hydrogen and PHS prices will grow slower due to moderate demand.
Which energy storage technology is the most expensive?
We can distinguish two factors that show energy storage price, these are power (kW) and energy (kWh).
In 2022 the most expensive energy storage technology is Hydrogen with an average power CAPEX (USD/kW) 3117 USD/kW.
In 2022 the most expensive energy storage technology is Vanadium RF Battery Storage with an average energy CAPEX (USD/kW) 517 USD/kW.
According to Assets-Global report in 2030 the most expensive energy storage method will be Pumped-storage hydroelectricity with:
- avg. power CAPEX 2046 USD/kW
- avg. energy CAPEX 511 USD/kWh
Think now, we take under consideration short-term, we can analyze long-term effective CAPEX. The situation in the long term is completely different!
Pumped-storage hydroelectricity is the cheapest in case of effective CAPEX (USD/kW base on PSH life of 80 years and 6% discount rate).
How much does a 1 MW battery cost?
1 MWh / 1MW battery (LFP) with BMS costs 217 390 USD in 2022 in Europe, we have to add to this costs extra costs to get the price of BESS, such as:
- fire protection
- DC and AC cables
- ADR transportation