The cost comparison between thermal energy storage (TES) and lithium-ion batteries shows that thermal energy storage can be significantly cheaper, especially for long-duration storage applications.
Cost per kWh:
- Thermal energy storage systems have a global average installed capital expenditure (capex) cost of about $232/kWh, which is less expensive than lithium-ion battery systems costing around $304/kWh for a typical 4-hour duration.
- Another estimate puts TES cost at approximately $350/kWh capex, which translates to about 13.5 cents per kWh-thermal at a 10% internal rate of return, with potential lows below 5-10 cents per kWh in some cases.
- For geologic or seasonal thermal energy storage approaches, the levelized cost of storage (LCOS) can be as low as 1 cent per kWh, with the levelized cost of electricity (LCOE) around 6 cents per kWh, highlighting TES’s potential for very low-cost, long-duration storage.
Duration and Use Case:
- Thermal energy storage is particularly cost-competitive for long-duration energy storage (lasting 8 hours or more), where it surpasses lithium-ion batteries in cost-effectiveness.
Regional Variations:
- Costs are notably lower in China, where large-scale TES and other long-duration energy storage (LDES) projects benefit from favorable policies, while in non-China markets TES capex can be roughly 54% higher than the global average.
Summary Table:
| Technology | Approximate Capex Cost ($/kWh) | Notes |
|---|---|---|
| Thermal Energy Storage (TES) | $232 (global average) | Cheapest among long-duration storage; potential below $100/kWh in optimal cases |
| Lithium-Ion Batteries | $304 (4-hour duration typical) | More expensive for longer durations |
| Geologic TES (Seasonal) | LCOS as low as 1 cent/kWh | Very low cost for seasonal, large-scale storage |
In conclusion, thermal energy storage offers a cheaper alternative to lithium-ion batteries for long-duration and large-scale energy storage, with costs potentially much lower in favorable conditions and for extended storage durations. Lithium-ion batteries remain cost-competitive for shorter-duration, high-power applications.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-thermal-energy-storage-compare-to-lithium-ion-batteries-2/
