How do infrastructure and installation costs vary between different types of energy storage systems

The infrastructure and installation costs of energy storage systems vary significantly based on the type of technology used, energy capacity, and the specific site conditions. Here’s a detailed comparison of several types of energy storage systems, focusing on their costs and other relevant factors:

Overview of Energy Storage Systems

1. Pumped Storage Hydropower (PSH)
   • Installed Cost: Approximately $263/kWh for a 100 MW, 10-hour system. Costs can be driven down to $143/kWh for longer durations due to reduced energy costs associated with storage in larger reservoirs.
   • Key Components: Major cost contributors include the reservoir and powerhouse, which can amount to $76/kWh and $742/kW, respectively.
2. Compressed Air Energy Storage (CAES)
   • Installed Cost: For a 100 MW, 10-hour system, CAES costs around $295/kWh, with the lowest costs occurring at longer durations due to lower cavern excavation costs.
   • Cost Efficiency: CAES is projected to remain the most cost-effective storage option for larger systems, particularly given its independence from duration-related costs.
3. Lithium-Ion Batteries (Li-ion)
   • Installed Cost:
     • Lithium Iron Phosphate (LFP): Costs about $291/kWh for a 100 MW, 4-hour system.
     • Nickel Manganese Cobalt (NMC): Costs around $300/kWh for the same specifications.
   • Cost Trends: With technological advancements and increasing production volumes, these costs are expected to decline further. By 2030, market projections suggest lithium-ion systems could compete effectively with CAES and PSH systems.
4. Thermal Storage
   • Installed Cost: Generally less explored in terms of specific cost metrics, but commonly follows similar trends as PSH and CAES, with costs improving over longer durations.
   • Efficiency: The effectiveness of thermal systems can vary based on geographical and operational factors.
5. Flow Batteries (e.g., Vanadium Redox)
   • Installed Cost: These systems are typically more expensive than lithium-ion, with costs reported higher due to the price of electrolytes and larger infrastructure needs.
   • Market Position: Despite their higher costs, they provide significant advantages in terms of longevity and scalability, especially for stationary applications.

Installation Costs

The variation in installation costs is influenced by several factors, including site conditions, required permits, and the complexity of connecting the storage system to the existing grid infrastructure. Generally:

• Soft Costs: Installation can account for a considerable portion of the total system cost, often comprising engineering, procurement, and construction (EPC) expenses, which vary widely by region and system complexity.
• Specific Cost Ranges:
  • Installation costs for energy storage can vary from a few thousand to tens of thousands of dollars, depending on factors such as the type of storage and the site’s accessibility.
  • For instance, the costs associated with installing Level 2 electric vehicle supply equipment (EVSE) can range from $600 to $12,700, significantly influenced by local labor and material costs.

Summary Comparison of Costs

Here’s a simplified comparison table of the installed costs (in $/kWh) across the main energy storage technologies:

Overall, while lithium-ion batteries dominate the market, technologies such as CAES and PSH offer competitive costs, particularly for larger scale applications and longer durations. The energy storage market is also evolving rapidly, leading to anticipated further reductions in these costs across various technologies by 2030 and beyond.