Energy Storage Picks Up Pace As Costs Fall

Energy storage is poised for rapid growth.

The past 18 months have witnessed an unprecedented number of announcements, many of them in the US.

In 2018 the state of New York announced a 1.5GW energy-storage target by 2025, New Jersey opted for 2GW by 2030, while Arizona expects 3GW is feasible by that date.

BloombergNEF links the fortunes of an energy market with high renewables penetration to cheaper energy storage.

In its 2018 New Energy Outlook, it projects that wind and solar will grow to almost 50% of world generation by 2050, on the back of “precipitous reductions in cost”, but also the “advent of cheaper and cheaper batteries that will enable electricity to be stored and discharged to meet shifts in demand and supply”.

According to European trade association Eurobat, costs of $273/kWh for lithium ion batteries are being reported by some manufacturers.

Focusing on the $/kWh for the battery alone is only helpful to a point, as these costs are just one component of a system that comprises inverter hardware, electronics and software.

Detailed cost breakdowns for battery energy-storage systems are scarce or difficult to nail down as this type of information is confidentially held among suppliers and integrators.

Differences in system design or technology, depending on the application, as well as system sizing and cost boundaries, can all vary, making comparison difficult, according to the International Renewable Energy Agency (Irena).

System and capital costs
Some system integrators, which typically buy in batteries and converters and incorporate them to work out the design and size of storage systems depending on their application, will be able to apply healthy margins for their proprietary software, which deploys advanced data analytics to exploit the dynamic functionality of energy storage within grids.

The contribution of cell costs to the total cost of an energy-storage system varies, depending on system size. In larger systems, power electronics and other costs become more relevant, according to Irena.

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