The cost comparison between pumped hydroelectric energy storage (PSH) and lithium-ion batteries reveals that pumped hydro storage is generally more cost-effective, especially when measured in cost per kilowatt-hour of installed capacity.
Capital and Operational Costs
- Pumped hydroelectric storage has capital expenditures (CAPEX) typically ranging from about $1,999 to $5,505 per kilowatt of power capacity, with fixed operations and maintenance costs around $18 per kW-year and variable O&M costs near $0.51 per MWh.
- According to detailed modeling and reports, pumped hydro projects have total project costs ranging roughly from $106 to $200 per kilowatt-hour of capacity.
- In contrast, lithium-ion battery storage projects have significantly higher costs, with total project costs ranging between approximately $393 and $581 per kilowatt-hour according to World Bank data cited by industry sources.
Cost per Energy Stored (Levelized Cost)
- A 2019 report noted pumped storage hydropower costs at around $165/kWh, which is substantially lower than many battery storage technologies.
- Pumped hydro’s lower cost per kWh is attributed to its large-scale capacity and mature technology, including benefits from economies of scale and site-specific optimizations.
Summary Table
| Storage Technology | Capital Cost Range (per kWh) | Notes |
|---|---|---|
| Pumped Hydro Storage | $106 – $200 | Lowest cost among large-scale storage; mature technology; long duration storage |
| Lithium-ion Batteries | $393 – $581 | Higher cost; better for shorter duration and flexible deployments |
In conclusion, pumped hydroelectric storage is significantly cheaper than lithium-ion battery storage on a per kilowatt-hour installed capacity basis. This cost advantage makes pumped hydro the most economical option for large-scale, long-duration energy storage, with lithium-ion batteries better suited for shorter-duration or decentralized applications.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-pumped-hydroelectric-energy-storage-compare-to-lithium-ion-batteries/
