The cost of lithium-ion batteries (LIBs) for utility-scale storage generally remains competitive, especially for shorter duration storage (e.g., 2 to 4 hours), but other battery technologies may be cheaper or more economical for long-duration storage (beyond 8 hours).
Lithium-Ion Battery Cost Overview
- In 2022, utility-scale lithium-ion battery systems had a total installed cost around $482/kWh for 4-hour duration systems. Projections show costs declining significantly over time, reaching as low as around $159/kWh by 2050 under the most optimistic scenarios.
- The 2024 base year cost for lithium-ion utility-scale battery energy storage systems typically range between roughly $100 to $300/kWh, varying by system size, chemistry type (e.g., lithium iron phosphate, nickel manganese cobalt), and market conditions.
- Installed capital costs for lithium-ion battery storage around 4-hour duration are usually in the range of $300/kWh (installed system level).
Comparison to Other Battery Technologies
- Long-duration energy storage (LDES) technologies such as thermal energy storage, compressed air energy storage (CAES), and flow batteries have become less expensive than lithium-ion batteries for storage durations longer than 8 hours.
- A BloombergNEF report cited thermal storage capex around $232/kWh and compressed air storage around $293/kWh for long-duration applications, which are lower than the $304/kWh typical cost for 4-hour lithium-ion battery systems.
- For shorter durations (e.g., 4 hours), lithium-ion batteries still tend to be more cost-effective relative to these alternatives, but costs increase for longer duration storage where other technologies are better optimized and cheaper.
Summary
| Technology | Typical Installed Cost ($/kWh) | Duration Suitability | Notes |
|---|---|---|---|
| Lithium-ion batteries | $100 – $300 (large-scale, 4-hour typical) | Best for short (~2-4 hr) duration | Declining costs; widely used technology |
| Thermal energy storage | ~$232 (long-duration) | Long duration (>8 hours) | Cheaper than lithium-ion for long durations |
| Compressed air storage | ~$293 (long-duration) | Long duration (>8 hours) | Competitive with thermal storage, cheaper than LIB long-duration costs |
| Flow batteries | Higher than lithium-ion for 4 hours, expensive for long duration (66% higher capex than LIB) | Long duration | Still relatively costly currently |
In conclusion, lithium-ion batteries currently dominate utility-scale storage for short to medium durations due to their maturity and cost trajectory, with costs around $100-$300/kWh for 4-hour systems. However, for long-duration storage needs beyond 8 hours, alternative technologies such as thermal, compressed air, and flow batteries are becoming more economically attractive as their installed costs are now lower or comparable to lithium-ion systems at those durations.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-lithium-ion-batteries-for-utility-scale-storage-compare-to-other-battery-technologies/
