The costs of pumped hydroelectric energy storage (PHES) compare favorably to those of lithium-ion batteries, particularly when measured on a per kilowatt-hour ($/kWh) basis.
Capital Costs and Cost per kWh
- Pumped Hydro Storage Costs:
- Capital expenses (CAPEX) for pumped storage hydropower range broadly from about $1,800 to $5,500 per kilowatt (kW) of power capacity depending on project specifics such as site geography, storage head, and construction techniques.
When expressed per kilowatt-hour of storage capacity, pumped hydro projects fall in the range of approximately $106 to $200 per kWh. Another source cites around $165 per kWh for pumped storage hydropower.
- Capital expenses (CAPEX) for pumped storage hydropower range broadly from about $1,800 to $5,500 per kilowatt (kW) of power capacity depending on project specifics such as site geography, storage head, and construction techniques.
- Lithium-Ion Battery Costs:
- Lithium-ion batteries typically have higher installed costs, with World Bank data indicating costs between $393 and $581 per kWh.
Operating and Maintenance Costs
- Pumped hydro has relatively low fixed operations and maintenance costs, around $18 per kW per year, and variable O&M costs are about $0.51 per MWh. Lithium-ion batteries have higher O&M costs relative to pumped hydro due to shorter lifespans and more frequent replacements.
Scale and Duration Effects
- Pumped hydro benefits significantly from economies of scale—costs tend to decrease as project size increases, with a conservative cost reduction of roughly 16% per tenfold increase in power scale observed.
- The technology is mature with little expected dramatic cost declines soon, but drilling innovations (e.g., vertical shafts used in oil industry) could reduce construction costs by about 33%.
- Pumped hydro is especially cost-effective for long-duration storage (8 hours or more), whereas lithium-ion batteries are typically used for shorter-duration applications.
Summary Comparison
| Aspect | Pumped Hydroelectric Storage | Lithium-Ion Battery Storage |
|---|---|---|
| Capital Cost ($/kW) | ~$1,800 – $5,500 | Higher (varies widely but generally more expensive) |
| Capital Cost ($/kWh) | ~$106 – $200 | ~$393 – $581 |
| Fixed O&M Cost | ~$18 / kW-year | Higher due to replacement cycle |
| Variable O&M Cost | ~$0.51 / MWh | Higher |
| Technology Maturity | Mature, stable costs | Rapidly evolving, costs decreasing |
| Best Use Case | Long-duration, large-scale storage | Short-duration, flexible applications |
In conclusion, pumped hydroelectric energy storage generally offers significantly lower capital costs per unit of energy stored compared to lithium-ion batteries, especially for large-scale, long-duration energy storage projects. Lithium-ion remains costlier on a per-kWh basis but benefits from modularity and faster deployment. Pumped hydro’s cost advantage is reinforced by its longevity, low operational costs, and scale economies.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-the-costs-of-pumped-hydroelectric-energy-storage-compare-to-those-of-lithium-ion-batteries/
