The capacity of an energy storage system significantly impacts its overall cost. Here are key points to consider:
Economies of Scale
Generally, larger energy storage systems are more cost-effective on a per kilowatt-hour basis compared to smaller ones. This is due to economies of scale, such as volume purchasing, which reduces the cost per unit.
Power and Energy Capacity
The cost of an energy storage system is determined by both its power and energy capacity. For example, battery energy storage systems (BESS) are priced differently based on their rated power (e.g., 1 MW, 10 MW, 100 MW) and discharge duration (e.g., 2, 4, 6 hours).
Technological Considerations
Different technologies have varying costs based on their capacity and duration. For instance, pumped hydro storage (PSH) is often the most cost-effective for long-duration energy storage, with costs such as reservoir and powerhouse costs being significant. Lithium-ion batteries, commonly used in BESS, see cost reductions as technology advances, potentially becoming more competitive with PSH by 2030.
Cost Components
The total cost of an energy storage system includes the cost of the energy storage block itself (e.g., battery packs for lithium-ion systems) and the balance of system (BOS) costs, which encompass inverters, electrical infrastructure, and other necessary components.
Duration and Cost
Systems designed for longer durations (e.g., 10 hours) often have different cost structures compared to short-duration systems. For utility-scale battery storage, costs decrease with longer durations due to cost-sharing across more stored energy. However, the optimal duration depends on the specific application and market conditions.
Supply Chain and Materials
The availability and cost of materials, such as lithium and vanadium, can influence the overall cost of energy storage systems. Supply chain disruptions can increase costs, while advancements in technology and economies of scale can reduce them.
In summary, the capacity and type of an energy storage system influence its cost through economies of scale, technological characteristics, cost components, and supply chain considerations.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-capacity-of-an-energy-storage-system-impact-its-overall-cost/
