ESS installation costs set to fall by at least 50% by 2030

ESS installation costs set to fall by at least 50% by 2030

ESS installation costs set to fall by at least 50% by 2030 Energy Storage Journal


Michael Taylor, senior analyst, renewable energy, IRENA,

The installed costs for stationary battery energy storage systems will fall by more than 50% across the different chemistries and technologies by 2030, according to a report published on October 6 by the International Renewable Energy Agency.

While 96% of global installed stationary power storage capacity will continue to come from pumped-hydro systems, economies of scale and technology breakthroughs should see the accelerated development and adoption of alternative storage technologies, such as lithium ion and flow batteries.

The finding were published in IRENA’s Electricity Storage and Renewables: Costs and Markets to 2030, which was launched during the ‘Innovation for Cool Earth Forum’ in Tokyo, Japan, which ran between October 4-5.

Michael Taylor, senior analyst, renewable energy cost status and outlook at IRENA, told ESJB: “We see lower installation costs and decarbonization of energy as interlinked.

“They are both likely to contribute to deployment growth. Due to recent, sometimes rapid, cost reductions for renewable power generation, low-cost storage systems can be an enabler for the efficient management of high shares of variable renewable electricity in the systems (noting that they are competing with other options to do this).

“However, at the same time as battery deployment starts to increase, best practice and operational experience may unlock synergies for continued cost reductions that will in turn open up new business opportunities for battery electricity storage technologies that may not have been plausible in the past.”

Installations costs of vanadium redox flow battery systems were forecast to decrease the most, around 66%, from $347/kWh in 2016 to $119/kWh by 2030.

For lead-acid, installation costs by 2030 are expected to halve from its 2016 numbers. The decreased costs for lithium-ion systems will vary depending on the chemistry (between 54% for LTO [estimates in 2016 range between $473/kWh and $1,260/kWh] and up to 61% for LFP systems),

Compressed air energy storage is set to fall from $53/kWh for a typical project in 2016 to $44/kWh by 2030. Installation costs for flywheel systems should decline to between $1,000/kWh and $3,900/kWh by 2030 as cycle and calendar lifetimes improve.

Taylor says lithium and other non-lead chemistries were likely to dominate the deployment in stationary applications out to 2030, but lead-acid batteries had the potential to remain in use if they could decrease costs.

“For instance, compared to the automotive market, the stationary lead acid production processes could be better optimized through increased automation,” he said.

“Electrode improvements that rely on carbon embedding or the introduction of copper stretch metal meshes in the negative electrode of flooded lead acid batteries also have the potential to improve system performance. This could see them retain a place in the market, notably in hybrid storage systems that combine high power storage solutions like flywheels or lithium ion batteries with less expensive (albeit less performing lead acid batteries) for longer term energy provision.”

The falling price of batteries could also stimulate a 17-fold growth of installed battery storage — from 11GWh to 181GWh, in the most conservative estimate, and up to around 421GWh in the most optimistic outlook — by 2030.

IRENA director-general Adnan Amin said that as storage technology improved and prices decline, both utility-scale and small-scale, distributed applications could grow dramatically, accelerating renewable energy deployment. “In this dynamic, low-carbon energy environment, now is a crucial time for storage technology.

“This research demonstrates that the business case for renewable energy continues to strengthen, positioning it firmly as a low-cost and secure source of energy supply.”