Comparing the cost of pumped hydro storage (PHS) to lithium-ion batteries involves examining both the capital costs and efficiency of these technologies.
Cost Comparison:
- Pumped Hydro Storage (PHS): The capital cost of a PHS plant can range from $1,500 to $3,500 per kilowatt-hour (kWh) of storage capacity, depending on factors like the site’s geography and design specifics. Some estimates place the cost at around $2,250 per kilowatt (kW) for a facility with a specific capacity and storage duration.
- Lithium-Ion Batteries: The capital cost for lithium-ion battery storage can range from $400 to $1,200 per kWh of storage capacity.
Efficiency and Technology Maturity:
- PHS: PHS is a mature technology with high round-trip efficiency, often above 80%. It is particularly valuable for long-duration energy storage needs, typically storing energy equivalent to 8 or more hours of power production.
- Lithium-Ion Batteries: These batteries are more versatile and suitable for a wide range of energy storage applications, from short-duration to longer-term needs. They have a round-trip efficiency similar to PHS, but their cost and scalability advantages make them more competitive for smaller-scale applications.
Economic Considerations:
- Revenue Streams and Cost Recovery: For PHS to be economically viable, it often relies on capturing arbitrage opportunities based on energy pricing spreads, which can be around 25 cents per kWh to achieve a 10% internal rate of return (IRR). Lithium-ion batteries, with their lower upfront costs, can similarly benefit from these spreads but may also offer revenue streams through grid stabilization services.
Overall, while PHS offers superior long-duration storage capabilities and efficiency, lithium-ion batteries provide flexibility and lower capital costs, making them more suitable for certain types of energy storage needs and applications.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-pumped-hydro-storage-compare-to-lithium-ion-batteries/
