How battery storage costs could plunge below $100/kWh | RenewEconomy

How battery storage costs could plunge below $100/kWh

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New research shows battery storage costs falling to below $100/kWh within years. That makes storage attractive for homes, businesses, for grid operations and to replace gas peaking plant. And there will be no need to “over produce”, or for back-up reserves.

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(Note, all dollars are $US).

The flow of analysis about battery storage from big-end investment banks continues apace. Last week it was HSBC and Citigroup with ground-breaking reports – which we wrote about here and here. UBS also jumped in on the act too.

Why is this so? Well, according to UBS, interest from both investors and corporates has accelerated in recent months. That’s because the big end of town is suddenly alive to the opportunities of a technology that will likely be even more disruptive than solar. And the key is in the forecast on costs.

Citigroup last week cited $230/kWh as the key mark where battery storage wins out over conventional generation and puts the fossil fuel incumbents into terminal decline.

UBS, in a report based around a discussion with Navigant research, says the $230/kWh mark will be reached by the broader market within two to three years, and will likely fall to 100/kWh.

And it predicts that the market for battery storage will grow 50-fold by 2020, mostly in helping households and businesses consumer more of their solar output, but also at grid scale and with electric vehicles.

So here are some highlights gleaned from the UBS discussion with Navigant:

Navigant estimates the cost of materials going into a battery at the Tesla Gigafactory on a processed chemical basis (not the raw ore) is $69/kWh [this metric is per kW per hour of operation].

tesla batteryThe cost of the battery is only ~10-20% higher than the bill of materials – suggesting a potential long-term competitive price for Lithium Ion batteries could approach ~$100 per kWh. Tesla currently pays Panasonic $180/kW for their batteries, although conventional systems still selling for $500-700/kWh. But Navigant says that the broader market place will reach the levels Tesla is paying in the next two to three years.

A typical ‘load shifting’ 4-hour battery (designed to address the afternoon/evening peak) costs anywhere from ~$720-2,800/kWh, depending entirely on the scale of the Lithium Ion battery employed and the size of order.

The average $500-700/kWh for a typical battery is probably closer to the $2,000-3,000/kW when including the balance of the system costs ( around $400-500/kW), with a trend towards around $1,500/kW within the next 3-years. Navigant estimates the global market for batteries will grow from 400 MWh in 2013 (ie – 100 MW assuming 4-hour systems), to 20GWh (or around 5GW/yr) by 2020, globally.

UBS believes that the ‘merchant’ entry of batteries for wholesale purposes on the grid remains a few years off. Some above-market PPAs will be supported by utilities looking to use the technology to balance their grids but UBS believes commercialisation of battery storage will remain biased towards ‘short-usage’ needs, and by businesses looking to clip their ‘peak’ usage charges.

Still, over the long run, the advantages of scale will mean that utility-scale storage will evolve much more rapidly compared to the residential product.

As for the market for batteries, UBS cites three sub-sectors:

Transportation: low-cost, high-density, low-weight batteries. We emphasize this sector is likely to take a different direction from utility solutions.

Utility-scale: The main focus, with the primary consideration for these solutions being their ability to deploy quickly, into high density populations without contributing to air or water permitting hassles.

Distributed resources: in both commercial and industrial, and residential applications. “While many would point to the ability to move ‘off the grid’ entirely, we suspect the economics are unlikely palatable. Rather, the ability to clip ‘peak’ demand contributions by industrial customers is particularly notable. “

As for the question of which technology, Navigant expects lithium ion to remain the market leader for grid as well as small-scale storage for the next ten years. The main risks remains the uncertainty on input costs for Lithium, as well as Cobalt and Graphite, where Navigant thinks the greater “pinch points” await.

Other technologies being considered include flow batteries, such as advanced lead acid carbon, which are also functionally well suited for grid storage/long duration applications. Newer chemistries, such as the currently under research lithium sulfur and magnesium-Ion batteries may gain traction by early next decade.

Beyond batteries, pumped hydro faces the problem of limited favorable locations available, but fly wheels and compressed air storage (combined – and dispatched through gas turbines) may yet find their respective niches, although could well be excluded from ongoing state processes to kick-start the battery sector.

“In the end, lower prices are coming, but the technology is not yet clear,” UBS notes.

And, it quotes Navigant researcher Sam Jaffe in this clear point, that battery storage is coming now.

Jaffe said most of his ten years in the sector had been “sitting at conferences hearing the same presentations from the same people about the same hypothetical benefits of energy storage.

”But I see a very important change in the last two years where most of the presentations at these conferences are now talking about actual deployment of storage. So what has been a hypothetical concept for so long is now becoming a real business.”

As Jaffe noted, the $180/kWh price paid by Tesla compares to about $1500/kWh even five years ago, maybe seven years ago when it was $1200 to $1500 per kilowatt-hour. “So $180 per kWh is the price of those batteries, not the manufacturing cost but the price that they’re paying for them,” he said..

He also made this point about the comparison between battery storage and gas-fired peaking plant:

“If you assume that we’re at around a $200 per kilowatt- hour price point today for high quality Lithium-Ion batteries that are going to last ten years under frequent cycling, and if you wanted to build a very large peaker plant with four hours of energy duration behind it, it would be about $1400 per kilowatt on those costs.

“Interestingly, that’s actually pretty comparable to the cost of building a natural gas fired peaker plant. Keep in mind, you’re not buying fuel for batteries – you’re essentially just arbitraging low and high cost of daily electricity.”

And later:

“A lot of people think you tie a battery to a solar panel and boom you’ve got a power plant, which is technically true but managing it at the central grid level makes it much more than that.

“For instance, I’m aware of one project where the idea was to put a multi-gigawatt hour battery plant at a spot in a suburban location, where the local utility was looking for a natural gas peaker plant.

“However, they knew it was going to be an enormous uphill climb to site that peaker plant because nobody wants to live next to a smoke stack. People are more than willing to live next to a warehouse full of batteries.”

And this on its overall impact on the grid:

“We essentially just developed a grid over the last 150 years throughout the world that immediately consumes what it produces and manages that by essentially overproducing a little bit so that you can make sure you have some backup in case of unforeseen outages.

“But if you have energy storage then you don’t need to over produce, and you don’t need backup reserves. It allows you to store electricity and use it when you need it. “

That is a fundamental change. And it is happening now.

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  1. Andrew Woodroffe 6 years ago

    Sorry, but isn’t kWh is kW for one hour and not per hour? Given batteries, like PV, do not enjoy any inherent benefit by going big, there is no real need for centralisation. However, given the expense of balance of plant, batteries have a sweet spot at street or town size level, so one would expect to be looking at networks putting in a few sea containers of Li Ion at most substations. Benefits would be enourmous. No spinning reserve, no balancing plant. There is a degree of control by the networks that residential systems would not have.

    • juxx0r 6 years ago

      You’re right. And because of that they’re confusing a stock with a flow implying that the battery materials cost would be half the price if you only used the battery for half the hour.

      • jeff cowdrey 6 years ago

        I think you two are confusing discharge capacity with discharge rate.

        • juxx0r 6 years ago

          Wasn’t us, paragraph 7:

          “[this metric is per kW per hour of operation]”

          • Catprog 6 years ago

            I think they are talking about the factory not the batteries themselves.

  2. Zvyozdochka 6 years ago

    Solar PV has probably killed off the utility baseload business model in say 6 years? Batteries will finish the grid off in 10 years. Almost without exception, the same people in leadership/ownership of utility companies are still at the helm now. I hope people are bailing from those “investments”. The current urgent problem is to stop Govt wasting our money on those same businesses.

    • flying pants 5 years ago

      Well solar is free now.. Or $150/month whatever.. And soon every solar system will come with a battery soooo

      Goodbye energy companies, poisonous gas profiteers

  3. Billion003 6 years ago

    The Axion battery.

  4. Diogenes60025 6 years ago

    $100.00/KWh is a little outside my budget. I presently pay $0.013/KWh, and that is already too high.

    • jeff cowdrey 6 years ago

      You pay 1.3 centsKWh? Wow! I want to live where you live. $100 is the cost of a battery that can cycle 1KWh. If cycled daily over ten years, cost is slightly more than 2.7 cents/KWh

      • Diogenes60025 6 years ago

        Sorry, its $0.13/KWh. But $100.KWh is still outside my budget.

        • jeff cowdrey 6 years ago

          Is 2.7 cents/KWh outside your budget, especially, if it means shifting your usage from more expensive peak hour consumption, lowering your net expense by more than 2.7 cents/KWh?

        • RobS 6 years ago

          You do realise we are talking about rechargeable batteries right? Ie that $100/Kwh battery, each Kwh can be used several thousand times before the battery dies? Lithium ion batteries conservatively have a lifespan of 3,000 cycles and probably within a few years 5,000 will be realistic therefore at $100/Kwh of capacity the cost per Kwh stored is 2 to 3.3 cents/Kwh.

          What this means is that if you have time of use metering and your night time power is say 10c and daytime power 25c/Kwh then you can charge your battery overnight and pay 12-13.3c/Kwh during the day rather than buy the 25c/Kwh daytime power, similarly my solar system generates power at about 11c/Kwh, anything I feed back into the grid receives a feed in tariff of 8c/Kwh, I pay a flat rate of 27c/Kwh for my power from my utility, with the proposed battery I can store my excess solar generation during the day and consume it at night at a cost of 13-14.3c/Kwh and avoid paying 27c/Kwh for power overnight.

          • Chris Fraser 6 years ago

            And in many cases a cared-for battery doesn’t die. It is however considered to be less serviceable because it asymptotes to 80% of its brand new kWh capacity.

          • Diogenes60025 6 years ago

            A likely story.

          • RobS 6 years ago

            I don’t understand, exactly which part of my “story” are you skeptical about?

          • cumiastowski 6 years ago

            I’m guessing Diogenes does not understand the difference between kWh of actual energy vs. kWh of reusable storage for that energy. He/she will learn in time … no harm done.

          • crtoca 6 years ago

            Lithium batteries can last many shallow discharge cycles. But full discharge/charge cycles shorten capacity much faster. This is why the megawatt grid systems are only 15 -30 minute systems. The economic metrics used above are useless when applied to other technologies, like vanadium flow batteries. VFB’s are expensive per kW and kWh, but can last 20 years with unlimited deep discharge cycles, and 4 hours of energy or more – depending on the amount of liquid electrolyte in the tank. Life cycle costs are much less than lithium, but that’s only important dependent on your application. Bottom-line, there is no single method of valuing energy storage – it’s application dependent. Cell phones, cars, solar PV, grid services all have different requirements.

        • Michael Ross 5 years ago

          “Sorry, its $0.13/KWh. But $100.KWh is still outside my budget.” I will assume $100.kWh is really $100/kWh, I make that typo frequently myself.

          What is being mixed up here is the incremental cost of grid power (I pay $0.097/kWh) and the capital cost to havethe system in place. If I spent $100 for a kWh of battery capacity I would need 1031 cycles of 1 kWh to equal $100 of capital cost. It is kind of hard to connect the dots in a useful way, but the battery cost is getting to be in the neighborhood of useful. I think in some places in the US residential power is 20 cents a kWh.

          If you charged and discharged once every two days, would need 5.6 years of saving $0.097/kWh to break even. That is pretty much nonsense, but you can see the payback is not impossible. There are notable ethical paybacks if you believe we should make less CO2, free air particulates, etc. The higher the cost of your power the better system cost would look.

  5. Bill Mastrippolito 6 years ago

    Battery storage is only half of the equation. How much are inverters going to cost to make 240 volts ac?

    • Chris Fraser 6 years ago

      I suspect that inverters are relatively good value. However to get good service out of the battery(ies), we should buy expensive battery monitors, housings and management systems. Ouch.

      • nakedChimp 6 years ago

        BMS make 5-10% of the battery cost.. and housings.. well.. but keep touting your nonsense.

    • Dennis Rowan 6 years ago

      Bill, if the end use appliance runs on DC…LEDs, Computers, EVs, Smart devices…Groups like the EMERGE alliance leading the way in this trillion dollar market, doing away with inversion losses by planning for and implementing parallel DC pathways or grids, on campuses, data centers, business centers, office buildings, military bases. Don’t invert and re invert losing 14% of generation when you can go DC to DC in many cases. Conserve, plan efficiently, utilize all efficiency measures, generate wisely and locally when posible, consume for maximum productivity minimum waste.

      • nakedChimp 6 years ago

        And this, yes!
        The only ‘real’ AC appliances people have left at home are fridges/freezers and pumps.. everything else nowadays is already converting the AC to DC and making either local AC (inverter aircon, washing machine, etc..) or using DC to the end (all kinds of gadgets and electronics..)

    • nakedChimp 6 years ago

      it’s just a couple of capacitors and some solid state devices..
      Currently this comes in at AUD 250 for 5 kW for DIY.
      If more people need this expect prices to drop.

    • flying pants 5 years ago

      Inverters are a couple grand with a 5-8 year warranty

  6. Ken Brown 6 years ago

    The cost cited in the article is the capital cost needed to store 1 KWh.

    My company has run cost models that indicate that a capital cost of less than $10 per KWh is necessary to keep electricity costs in the $0.08-0.12 per KWh that is common in the US. I do not know how Citigroup and other banks can make the claim that a capital cost of $200 per KWh makes batteries competitive. Sodium sulfur flow batteries are at that cost now, yet there is no rush to install them.

    The only way today and for the foreseeable future to have low storage capital cost per KWh is to make hydrogen by electrolysis, store it cheaply, and use the hydrogen as a fuel to generate electricity.

    Ken Brown
    Managing Partner
    Safe Hydrogen, LLC

    • Bob_Wallace 6 years ago

      ” Sodium sulfur flow batteries are at that cost now, yet there is no rush to install them.”

      I assume you know the reason, Ken. There’s no need for large scale storage on grids at this point in time. There’s more than enough ‘more expensive’ generation to turn off which means fuel savings.

      Good luck with the H2 thing. You’ve got a major uphill struggle given the inefficiency in the electricity -> H2 -> electricity chain compared to other storage technologies that run 70% to 90%. Want to share your current efficiency number?

      (BTW, run that model with $100/kWh, 5,000 cycle, 90% efficient storage along with ~3 cent off-peak electricity.)

      • Ken Brown 6 years ago

        We are at 40% efficiency but cost trumps efficiency.
        You are correct that batteries can be used to capture cheap electricity at night and return it during the day. That is not a sustainable business plan since, once enough storage is installed, the arbitrage goes away. You are left with costs and no margin.
        Batteries can make a go of it today, even at high costs, for industrial and commercial users who face time of day pricing and demand charges.
        The long term problem that has to be faced is how to keep the grid stable when the percentage of renewables goes above 35% and we do not want to have to rely on fossil fuel plants. A number of states and some countries want to go to 80% renewables by 2050. Because the wind does not always blow or the sun shine, today we need 1MW of fossil fuel plants to back up 1MW of wind or solar capacity. A number of studies in Germany clearly show that 80% renewables cannot be done without storage.
        If that is the case and if we look at how much storage is needed to back up a 500 MW wind farm, we see a real problem with the cost of batteries. Our models show that it takes about 100,000 MWh of storage. At $500 per KWh, that is a cost of $50 Billion. At a cost of $100 per KWh, it is $10 Billion. Since the wind farm costs only around $1 Billion, adding batteries is not economically feasible.

        • Bob_Wallace 6 years ago

          Ken, if you are at 40% and batteries are at 80% we all know that twice as much energy has to go in the front end as comes out the back end. That’s the problem you’ve got. You’re starting with a 2x higher supply cost and have to make that up with very cheap capex as well as keeping your other O&M costs under control.

          And that’s a killer for short term fill-in. If batteries hit $100/kWh, 5,000 cycles then you’ve got to hit the equivalence of $50/kWh, 5,000 cycles to tie.

          Maybe you can do that. We’ll have to wait and see what actually comes to market.

          H2, or perhaps ammonia, will make sense for long term, deep backup because the lower cost of large scale storage will offset the inefficiency problem.

        • Calamity_Jean 5 years ago

          But that’s not true.

          “Because the wind does not always blow or the sun shine…. “

          The wind does always blow, and the sun does always shine. The location just shifts from day to day depending on the weather. If it’s a cloudy day where you are, chances are it’s sunny a few hundred miles (or a few more hundred kilometers) away. If you’re getting a stiff breeze, some distance away the flags barely flutter. A location that’s producing more renewable power than it needs at some particular hour is able to put that excess onto the electrical grid and share it with some other location that is temporarily having unfavorable weather. At some other time, the situation will be reversed.

          “… if we look at how much storage is needed to back up a 500 MW wind farm…. Since the wind farm costs only around $1 Billion, adding batteries is not economically feasible.”

          The wind farm is more economically backed up by two other wind farms that are around 500 km away in different directions, so that one or another catches the wind wherever it goes.

          Additionally, cloudy days tend to be windy and sunny days tend to be still, so that solar backs up wind and vice versa. A small amount of storage will be needed to smooth out small variations of supply or demand, but hours upon hours of storage capacity will not be needed in a high-renewables situation, just as it isn’t today.

  7. Chris Winter 6 years ago

    Please do not mix the use of kW and kWh. They are two completely different things, even if they sound similar, and your comments lose credibility. As you know kW is power (eg the size of the engine); kWh is energy (eg the size of the fuel tank)

  8. Bernard Finucane 6 years ago

    This report needs a clean up as the terms KW and KWh seem to be used to mean the same thing.

    “The average $500-700/kWh for a typical battery is probably closer to the $2,000-3,000/kW ”

    “Tesla currently pays Panasonic $180/kW for their batteries, although conventional systems still selling for $500-700/kWh.”

    Also, why is it sometimes “KWh” and sometimes “kilowatt-hour”?

  9. maw56disqus 6 years ago

    Great news Giles, but spoiled by the inaccurate use of kW where kWh should have been used. Oddly enough the use of the old fashioned energy unit MMBTU (3,412 kWh per BTU) prevents this confusion, but raises other issues. Please edit your article and get it right 🙂

  10. [email protected] 6 years ago

    My Point and CounterPoint
    I worked in many states across the nation in the energy business and generally speaking I don’t see a big influx of distributed generation on a mass scale nor do I see a big installation of solar on a mass scale. Nor do I see utilities adopting battery storage on a a mass scale. What I do see and experience at the ground floor is end use customers in all segments desire and expect continuous power at a relative reasonable price. When that does not occur is when the customer starts grumbling. That grumbling is at themsleves for not having a contingency plan in place, grumbling at their contractor or provider for not preparing them, and perhaps even the utility for not offering extra services to get them out of a desperate situation.

    A great example is one of my hospital customers experienced a large power outage and the COO said “he is in the healthcare business not the electric delivery business”. This comment is very typical at the ground floor. The end use customer is focused on their core business not the electric delivery business. In another case a large prison institution and their customer owned micro-grid electrical equipment failed for lack of maintenance. The customer called the local utility for assistance because the customer didn’t have the skill nor the manpower to ameliorate and repair their own electrical micro-grid system.

    In another case a customer owned a medium sized micro-grid system that was not maintained properly over the years and the customer wanted to sell their system to the local utility so they can focus on their own core business.

    I have many cases at the ground floor where by suppliers of distributed and microgrid products and services are not understanding the total picture. Nor are the policy makers. Generally speaking this is because they don’t have the practical field experience at the ground floor to understand the issues from the customer’s point of view.

    The customer’s point of view and experience may be entirely different than what is written or discussed on blogs and forums as discussed here. However there are some great examples of what does work

    Data Centers and CoLos – We can look at data centers and co-lo centers as examples of value added services whereby customers pay a premium for that value. Some of my industry friends manage such facilities. Imagine a building within a building and the customer pays the building manager a fee for the filtered power and other value added services. This is happening right now all over the Silicon Valley, Northwest, and high tech corridors in Northeast and South.

    Traditional Power Conditioners and Storage – there is a great space for capacitors, power conditioners and such at end use customer level and utility level. Just look at what American Power Conversion (APC) has done over the years from rack mounted to enterprise wide utility grade systems and you get the picture.

    Integrated Products and Services – what I see here is big companies have big goals to meet. Sometimes they may not have time to implement smart grid stuff on their own therefore great opportunity for 3rd parties to do turn-key services. I am not talking “outsourcing”. What I am talking about is to be really joined at the hip integrated fully into the host company in a symbiotic relationship. For those in the energy industry we already see this occurring with energy efficiency services. Many 3rd parties are offering turn-key packages to help the host company meet goals and objectives in a fully defined performance metric based method. Cities, counties, large corporations and even utilities will seek such co-jointly formed integrated offerings; invisible to the customer.

    Total Approach
    Here is a good example. Remember that hospital COO that I mentioned above? Now think of instead of just offering that COO a “battery storage product” or a “microgrid product” that someone out there offered that COO a total integrated service where he would never ever need to worry about the hospital electric delivery system and the utility electric delivery system. You offer a complete package in order that the COO can assure his doctors they just need to worry about healthcare. And now you offer that across his/her total hospital operation.

    This is what I am talking about and this is what customers are asking for – not ones and twos but total impact at one time across the whole body.

    Thanks for your time

  11. Hazel 6 years ago

    Hello Giles,

    Nice article, and I too am excited about the prospect of batteries going for less than gas peaker plants. But I have several problems with your analysis.

    First, the Tesla battery runs about 230 Wh/kg, so claims of $69/kWh for materials imply about $15/kg, which is at least 2x too low, more likely 3x. Cobalt is about $32/kg, nickel $20/kg, lithium oxide $15/kg, and for the required purity and narrow particle size distribution among other quality metrics, you need to at least double all of these.

    Second, there is no way that battery costs are materials plus 10-20%. Steel sheet used in cars goes for 50% above raw material cost, and that’s for something that comes screaming out of the rolling mill at 27 meters/second, not a sub-mm nano-milled ceramic powder embedded in graphite with microns thick expensive polymer electrolyte and highly engineered graphite cathode. And that’s just the cells.

    Third, the battery market is extremely competitive, and nobody is making 150% margins on them. Gross margins in such an industry are more like 20-40%, putting costs above $300/kg.

    For these reasons, there’s absolutely no way Tesla is paying $180/kWh for their batteries. Cutting the more realistic $300-350/kg by 30% at the Gigafactory is nonetheless revolutionary.

    This is why the Ambri number of well below $100/kWh for electrode raw materials is so amazingly disruptive. And it requires no complex nano-milling or micron scale assembly technology, the liquid metal electrodes and molten salt electrolyte self-assemble in steel cans.

    Unfortunately it is too heavy (not enough Wh/kg) for automotive use. But that’s not an issue for stationary storage.

    • Michael Ross 5 years ago

      I have heard Elon Musk say $69 per kg of battery. He was talking about an at scale cost for the raw materials. That leaves out any further processing and is a bottom dollar below which you cannot go. He wasn’t saying they could make a battery for that cost.

  12. Bob 5 years ago

    Why would a four hour peaker plant cost $1400 per kilowatt when the batteries for such a plant would only cost $720 for 4 hours of 1kw power output?

    • Michael Ross 5 years ago

      A kW is an instantaneous measure of power. This could tell you the maximum power that is is needed at a peak.

      A different measure is kW for an hour which is a measure of capacity equivalent to how many coulombs (a unit of charge). A battery could have enough charge to produce 1000W for an hour (at the voltage and amperage of your choice).

      A kW is equivalent to heat energy, or horsepower. You could have just a tiny amount of capacity and produce for just a moment 1000W of power. OR

      You could have an immense capacity in kWh, but only be able to produce it at a very low power say 1 Watt. A 1 kWh battery like this would have to produce 1W for 1000 hours. 1W of peak power and 1kW of capacity.

      WIth a PV array like mine at home it is rated to produce a peak of 5.6kW. On a very clear day that may happen. On a given day I might get 30 kWh of accumulated charges (mathematically you integrate the kW WRT time), or I might get only 10kWh, but at some point during the that day, when the clouds broke it produced for a moment 5.6kW.

      So kW and kWh are both useful measurements, but you need to use them correctly.

      I would agree that the article is ambiguous in its presentation and needs some editing. But not knowing the true numbers I can’t tell if they have typo’ed or just been unclear. For example:

      “Tesla currently pays Panasonic $180/kW for their batteries, although conventional systems still selling for $500-700/kWh.”

      $180/kW is not nonsense – it would simply take a bunch of individual cells to do it (we don’t have enough information to tell what this is about). You could have enough cells to make 180kW (that is about 130 HP), and still talk about cost for capacity being $700 for a 1000W produce over an hour. It sounds like it is wrong though. The large Tesla Model S pack is rated as 85 kWh, at $700/kWh that would be a cost of $42500. If the Tesla capacity costs $180/kWh then the pack costs $15300.

      I am betting this is a typo $180/kW should be $180/kWh. So the Tesla pack is roughly 3 to 4 times better cost in terms of capacity.

  13. Erkko 5 years ago

    The battery capacity cost per kWh doesn’t directly indicate whether it is cost-competitive for grid load balancing. One has to measure cost per cycle instead.

    $230 / kWh divided by 2000 cycles for a typical lithium battery will result in a cost of 11.5c/kWh which is higher than the average retail price of power in the US. To that, you need to add the source cost of electricity which cannot be zero, which means $230 is not anywhere near breaking even for a retail customer unless you assume negative electricity prices caused by FiT subsidies – i.e. the government using your tax money to pay the producers to pay you to take their excess electricity.

    For peak load shaving for utilities, the price makes more sense because the momentary going rate on the market may be a dollar a kWh, but with more solar power on the grid, which peaks and even overtakes the demand during the peak demand, these price maximums are practically gone. This creates a perverse situation where it’s no longer profitable to build and use batteries because they cost more than what you get out of selling the power later, because when you’re off the peak the utilities are making electricity at 3-4 cents a kWh out of cheap baseload capacity.

    • Bob_Wallace 5 years ago

      If you live in Australia, Hawaii, or other place with plenty sunshine and high electricity prices then 11.5 cents for storage plus 8 cents for your own solar production is a bargain.

      We’re not going to use lithium batteries for grid storage. The price is too high for anything other than grid smoothing.

      When solar wipes out the midday peak there will still be morning and evening peaks. I’ll tack on some graphs that show what is happening in Germany on sunny days. Storing wind and solar to service those peaks as well as the days during which we don’t have enough wind and solar input are the places where storage batteries will come into play.

      As for what sort of storage, there are some interesting companies in the process of coming to the market.

      Ambri liquid metal batteries should be very cheap, they are simple to build and use commonly available materials. We don’t yet have a price but the claim is a 300 year lifespan with unlimited cycling. Even if they were $300/kWh that would be less than $0.003/cycle if cycled once per day.

      Alevo is now converting a building in North Carolina and expects to start shipping this year. This company has been operating very quietly but must have some impressive data. They’ve raised $1 billion in private money which will let them launch large scale.

      Alevo is claiming $100/kWh and 40,000 cycles. That works out to $0.003/cycle. Financed for 20 years at 5% would mean a $0.022 price per cycle over the first 20 years and then the cost of storage dropping to roughly zero for 89 more years.

    • Peter Moss 4 years ago

      When is peak demand?

      During non-Air Conditioning season, it is between sundown and 9:00 PM.

  14. Sailingsoul 5 years ago

    How many charge/discharge cycles.

  15. Philip Branton 5 years ago

    Battery cost will plunge when everyone realizes that their HOMES are actually batteries and start building with “battery blocks” to make liquid Metal cells. Talk about choking the necks and legacy of every subdivision developer alive today in cahoots with city and county codes officials. Outta sight is outta mind. Young wives really don’t know until they really start thinking about the electric bill they pay every month and then realize they should actually be getting PAID…!! Think about it….why would you live in an apartment or rental when a house can be an energy bank. Development across the world will never be the same. The number of kids and population control may be determined by how much energy citizens “bank”..! Why live in a high rise and be a SLAVE to an energy master..? Its the ENERGY…Stupid.!

  16. uncle tungsten 4 years ago

    HSBC and Citigroup simply cannot be believed. A cursory look at both of these companies would motivate extreme caution in accepting anything they report at face value. There is a mighty strong argument for both being denied practicing rights in Australia.

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