The cost of pumped hydroelectric energy storage (PHES) is generally lower than many other energy storage technologies, especially when measured on a levelized cost basis (cost per megawatt-hour, $/MWh).
Capital and Levelized Costs
- Pumped Hydro Costs
Pumped hydro projects have capital costs roughly around $165/kWh of power capacity and levelized energy storage costs between $200/MWh and $260/MWh according to various studies. Some projects, like the Goldendale Energy Storage Project, show capital costs around $1,800/kW but benefit from economies of scale, reducing cost per unit as power capacity increases. Pumped hydro is a mature technology with limited expected cost reductions over short time frames due to its long development timelines and mature supply chains. - Battery Storage Costs
Lithium-ion batteries currently show higher capital costs and levelized costs than pumped hydro. Battery costs have ranged from about $350/MWh up to nearly $1,000/MWh, though costs have been rapidly declining and are projected to reach around $120/MWh by 2025. However, batteries typically have shorter lifespans (10-20 years) and need replacement, increasing whole-life costs to roughly $200-$330/MWh when considering replacements over 40 years.
Cost Comparison Summary
| Energy Storage Type | Capital Cost (approx.) | Levelized Cost ($/MWh) | Notes |
|---|---|---|---|
| Pumped Hydro Storage | ~$165/kWh (power capacity) | $200 – $260 | Mature tech, long lifetime (~100 years), large scale economies |
| Compressed Air Storage | ~$105/kWh | Similar to pumped hydro | Mature but less common |
| Lithium-ion Batteries | Varies widely | $350 – $1,000 (current), $120 forecast by 2025 | Shorter lifespan, replacement costs increase lifetime cost |
Key Points
- Pumped hydro offers the lowest cost per unit of energy stored on a whole-life basis compared to lithium-ion batteries, especially for large-scale, long-duration storage needs.
- Batteries provide more modular, flexible storage but at a higher cost and shorter lifespan, requiring replacement and maintenance costs to be factored into the total cost of ownership.
- Pumped hydro’s value is enhanced by its long operational life (potentially 100 years) and ability to store large energy quantities for 8+ hours, making it ideal for grid reliability and resilience.
- Cost declines in pumped hydro are limited due to the mature nature of the technology and long development times, whereas batteries continue to see cost reductions through technological advances and economies of scale.
In conclusion, pumped hydroelectric energy storage remains among the most cost-effective large-scale energy storage options available today, especially when considering long-term operation and whole-life costs, whereas other forms like lithium-ion batteries currently carry higher upfront and lifecycle costs but offer advantages in flexibility and deployment speed.
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-other-forms-of-energy-storage/
