The cost comparison between thermal energy storage (TES) and compressed air energy storage (CAES) shows that TES is generally less expensive on a capital expenditure (capex) basis.
- According to a BloombergNEF report from May 2024, the global average installed capex cost for thermal energy storage systems is about $232 per kWh, while compressed air storage systems cost about $293 per kWh. This makes TES the cheaper option between the two for long-duration energy storage.
- In terms of levelized costs, thermal energy storage costs are estimated at roughly 13.5 cents per kWh-thermal (with capex around $350/kWh and a 10% internal rate of return) in some analyses. More optimistic estimates, such as for geological thermal storage using abandoned oil wells, suggest costs could be as low as 6 cents per kWh or even 1 cent per kWh levelized cost of storage. Comparable explicit levelized cost figures for compressed air storage are less frequently cited but generally remain higher given the higher capex.
- The lower costs for TES are partly driven by the use of inexpensive, abundant materials like silica sand and scalable technologies. Meanwhile, CAES technologies are more developed commercially in regions like China but still tend to have higher capital costs globally.
In summary, thermal energy storage tends to be more cost-effective than compressed air storage, especially when considering capital costs and levelized costs for long-duration applications. TES’s cost advantage is reinforced by simpler, cheaper materials and expanding large-scale projects, particularly in certain geologic storage formats. CAES remains somewhat more expensive but benefits from advancing commercialization in specific markets.
Summary Table
| Storage Type | Approximate Capex Cost ($/kWh) | Levelized Cost (cents/kWh) | Notes |
|---|---|---|---|
| Thermal Energy Storage | ~$232 | 6 to 13.5 (can be as low as 1) | Cheapest long-duration storage; uses abundant materials |
| Compressed Air Storage | ~$293 | Not explicitly stated | Higher capex; more commercialized in China; slightly more expensive |
Thus, if prioritizing cost, thermal energy storage offers a more economical solution compared to compressed air energy storage for long-duration energy storage needs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-thermal-energy-storage-compare-to-compressed-air-storage/
