Researchers at Imperial College London (ICL) developed a model to determine the lifetime costs (i.e., levelized cost)—as opposed to the investment cost—of 9 electricity storage technologies for 12 different applications between 2015 and 2050. The model predicts lithium-ion batteries to be the cheapest technology in the coming decades. An open-access paper on their work is published in the journal Joule.
Credit: Schmidt et al. Joule
We have found that lithium-ion batteries are following in the footsteps of crystalline silicon solar panels. Lithium-ion batteries were once expensive and suited only to niche applications, but they are now being manufactured in such volumes, their costs are coming down much faster than the competing storage technologies.—senior author Iain Staffell
The model, which incorporates data from more than 30 peer-reviewed studies, shows that at present, the cheapest energy storage mechanism is pumped-storage hydroelectricity, where water is pumped to a higher elevation with spare energy, then released to harvest the energy when needed.
However, as time progresses, pumped-storage hydroelectricity costs do not decrease, whereas lithium-ion battery costs come down, making them the cheapest option for most applications from 2030.
Personally, I was always quite skeptical toward lithium-ion storage for stationary applications, but when it comes to the levelized cost of storage—investment, operation and charging cost, technology lifetime, efficiency and performance degradation—lithium-ion combines decreasing cost with sufficient performance to dominate the majority of power system applications. I would have expected others to outperform in certain applications.—first author Oliver Schmidt
Schmidt adds that the model doesn’t say anything about whether lithium-ion batteries are the best-suited technology for stationary storage, but because it has such a head start in the market, it is best poised to be the cheapest option in the immediate future. The researchers can’t predict how new materials or advances will impact the market, but they hope their model, which is available open access to test a variety of technology cost and performance assumptions, can help industry and policymakers make informed investment decisions today.
The authors received funding from the Grantham Institute - Climate Change and the Environment at Imperial College London, and the Engineering and Physical Sciences Research Council.
Oliver Schmidt, Sylvain Melchior, Adam Hawkes, Iain Staffell (2018) “Projecting the Future Levelized Cost of Electricity Storage Technologies,” Joule doi: 10.1016/j.joule.2018.12.008