Capital Cost Comparison
- Compressed Air Storage: BloombergNEF data shows an average capex of around $293/kWh for compressed air storage systems targeted at long durations (8 hours or more). This figure is for global averages, with variation depending on location and technology maturity.
- Thermal Energy Storage: Thermal storage is the lowest cost among LDES technologies, with capex around $232/kWh, making it cheaper than compressed air storage and lithium-ion for longer durations.
- Lithium-Ion Batteries: For four-hour duration systems, lithium-ion batteries had an average capex of $304/kWh in 2023. This cost increases linearly with storage duration, which makes lithium-ion less economically attractive for long-duration storage (6+ hours).
- Gravity Storage: Gravity storage is among the more expensive options, with capex exceeding $600/kWh.
- Other LDES Technologies: Flow batteries, compressed gas storage, and pumped hydro have costs that vary widely but often remain more expensive than compressed air and thermal systems.
Economic Considerations Beyond Capex
- CAES systems typically have lower round-trip efficiency (~60-65%) compared to lithium-ion batteries (~85-95%), which means more energy is lost during storage and retrieval. This impacts operational cost-effectiveness.
- CAES has higher maintenance costs due to mechanical moving parts, about 5-10 times higher than lithium-ion batteries, which have no moving components.
- CAES capital costs in the US and Europe tend to be higher than in China, where larger scale deployment and favorable policies are driving down costs for LDES technologies including CAES.
- Lithium-ion batteries benefit from massive economies of scale driven by electric vehicle demand, making their costs likely to fall faster over time compared to LDES technologies such as CAES, which face slower cost declines due to less widespread adoption.
Scalability and Duration Impact on Costs
- CAES can be scaled to very large storage capacities, especially when underground salt caverns or depleted gas fields can be used for air storage, leading to potentially very low incremental costs per kWh for longer-duration storage (e.g., 24 hours or more).
- Unlike lithium-ion batteries whose costs rise nearly linearly with added duration, the unit costs for LDES technologies like CAES and thermal storage generally decrease as storage duration increases, making them more cost-effective for long-duration applications.
Summary Table
| Technology | Approximate Capex ($/kWh) | Duration Focus | Key Notes |
|---|---|---|---|
| Thermal Energy Storage | $232 | 8+ hours | Lowest capex, good long-duration option |
| Compressed Air Storage | $293 | 8+ hours | Competitive capex, lower efficiency, higher maintenance |
| Lithium-ion Batteries | $304 (4-hour systems) | 4+ hours (costs rise with duration) | High efficiency, lower maintenance, costs rise linearly with duration |
| Gravity Storage | ~$643 | 8+ hours | High capex, less common |
In summary, compressed air storage offers a competitive cost position relative to other long-duration energy storage technologies, being cheaper than lithium-ion batteries for durations beyond 8 hours but slightly more expensive than thermal energy storage. Its scalability and ability to leverage large underground storage sites make it a promising option for large-scale long-duration applications, despite lower efficiency and higher maintenance costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-compressed-air-storage-compare-to-other-ldes-technologies/
