The costs of compressed air energy storage (CAES) compare favorably to other long-duration energy storage (LDES) technologies, often being among the least expensive options available, though several nuances apply depending on region, storage duration, and system specifics.
Capital Expenditure (Capex) Costs
- Compressed Air Storage Capex: BloombergNEF (BNEF) data from 2023-2024 highlights compressed air storage costs around $293 per kilowatt-hour (kWh) of capacity in global averages, with some variation by geography and project scale.
- Comparison with Lithium-Ion Batteries: For reference, lithium-ion battery systems typically cost about $304/kWh for 4-hour duration systems, meaning compressed air storage is slightly less expensive or roughly comparable when viewed on a capital cost basis. However, lithium-ion costs tend to rise linearly with increased storage duration, while CAES and other LDES technologies scale more efficiently for longer durations.
- Comparison with Other LDES: Thermal energy storage is generally the cheapest LDES technology, with capex near $232/kWh, followed by compressed air. Gravity storage has a higher cost, around $643/kWh. Flow batteries and other mechanical or chemical storage technologies tend to have higher costs than compressed air on average.
Operating and Maintenance Costs & Efficiency
- CAES systems often have a lower round-trip efficiency (~60-65%) compared to lithium-ion batteries (typically 85-95%), which contributes to higher operating costs and affects economics.
- Maintenance costs for CAES are also higher—5 to 10 times that of lithium-ion batteries due to the mechanical complexity and moving parts in compressor and turbine systems.
Regional Differences
- In China, compressed air storage and other LDES technologies benefit from greater adoption and scale, lowering capex and O&M costs compared to other markets.
- However, Chinese-made lithium-ion batteries remain very cost-competitive, making it harder for CAES to outcompete lithium-ion there, unlike in many other regions where CAES and thermal storage can be cheaper alternatives for long-duration storage.
Economics and Future Potential
- Studies indicate CAES costs around 30% higher than lithium-ion for equivalent power storage when factoring in efficiency and maintenance, but CAES can provide much longer duration storage (e.g., 24 hours or more) at potentially below $50/kWh for very large-scale underground storage reservoirs, which lithium-ion batteries cannot economically match.
- The US Department of Energy’s outlook suggests that with innovation and scale, CAES and pumped hydro could approach levelized costs near $0.05/kWh by 2030, matching or beating lithium-ion batteries for long-duration use cases.
Summary Table
| Technology | Capex ($/kWh) | Round-Trip Efficiency | Notes |
|---|---|---|---|
| Thermal Energy Storage | ~$232 | Moderate | Cheapest LDES, good for long durations |
| Compressed Air Storage | ~$293 | ~60-65% | Slightly cheaper than Li-ion for long durations, higher maintenance costs |
| Lithium-Ion Batteries | ~$304 (4-hour systems) | 85-95% | Dominant for short durations, costs scale linearly with hours |
| Gravity Storage | ~$643 | Not specified | Highest capex among surveyed LDES |
In conclusion, compressed air energy storage offers a cost-competitive option for long-duration energy storage compared to lithium-ion batteries and other LDES technologies, particularly for durations beyond four hours. Its capital costs are generally lower or comparable, especially outside China, but efficiency and maintenance costs remain challenges. With ongoing innovations and scaling, CAES could become even more economically attractive by 2030. Thermal energy storage currently leads in lowest capital cost among LDES options. Lithium-ion still dominates short-duration storage but becomes less economical as duration increases.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-costs-of-compressed-air-storage-compare-to-other-long-duration-energy-storage-technologies/
