Cost Considerations by Duration
- Base Year Costs: The initial costs for installing utility-scale battery energy storage systems (BESSs) depend on the duration of storage. In general, longer-duration batteries are more cost-effective on a $/kWh basis, while shorter-duration batteries are cheaper on a $/kW basis.
- Cost Reductions Over Time: Research suggests that the cost of battery storage will continue to decline across different durations. The battery pack cost component is expected to decrease more rapidly than other parts of the system, such as the balance of system (BOS) and installation costs.
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Duration-Specific Costs:
- Shorter Durations: For 2-hour systems, costs may decline less rapidly compared to longer-duration systems because the power aspects (e.g., inverters) represent a larger portion of the overall cost.
- Longer Durations: For systems with durations of 10 hours or more, costs are expected to decrease more quickly as the battery pack costs dominate these systems, and pack prices are falling more rapidly.
Future Projections
- By 2030: The National Renewable Energy Laboratory (NREL) projects that costs for utility-scale battery storage systems could fall by 47%, 32%, and 16% from 2022 levels in the low, mid, and high projections, respectively. This translates to costs of $255/kWh, $326/kWh, and $403/kWh by 2030 for 4-hour systems.
- By 2050: Projected decreases could reach 67%, 51%, and 21% for the same scenarios, resulting in costs of $159/kWh, $237/kWh, and $348/kWh.
Conclusion
In summary, while the costs of battery storage systems are expected to decrease across all durations, the rate and extent of these reductions vary based on system design and duration. Longer-duration batteries tend to benefit more from falling battery pack costs, while shorter-duration systems may see slower cost declines due to their higher power-to-energy ratios.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-cost-projections-for-battery-storage-systems-vary-by-duration/
