The cost of thermal energy storage (TES) in non-China markets is significantly higher when compared to other energy storage technologies and also compared to TES costs within China. According to a BloombergNEF report from May 2024, the global average capital expenditure (capex) for fully installed thermal energy storage systems is $232 per kWh, making it the cheapest long-duration energy storage (LDES) technology on a global average basis. This is lower than compressed air storage at $293/kWh and four-hour lithium-ion battery storage at $304/kWh. However, these averages are heavily influenced by much lower costs in China, where supportive policies and gigawatt-scale projects have driven down costs.
In non-China markets, the cost premium is notable: thermal energy storage systems there are 54% more expensive than the global average cost. By contrast, flow batteries and compressed air storage are even costlier outside China, being 66% and 68% higher respectively. The higher costs in non-China markets stem from the earlier commercialization and larger scale deployment of LDES technologies within China. Other regions such as the US and Europe are still investing in developing their industries and innovating a wider range of energy storage technologies, including thermal, compressed air, gravity storage, and various battery chemistries, but these remain at an earlier stage of commercialization and thus costlier.
When compared specifically to lithium-ion batteries, thermal energy storage is cheaper on a global average basis for applications requiring more than eight hours of discharge. This makes TES a cost-effective option for long-duration storage compared to the more common lithium-ion batteries designed mainly for shorter durations (e.g., four hours). The cost advantage becomes more pronounced at longer durations, positioning TES as a competitive technology for bulk and long-term energy storage needs.
In summary:
| Storage Technology | Global Average Capex ($/kWh) | Cost Increase in Non-China Markets (%) |
|---|---|---|
| Thermal Energy Storage | 232 | +54% |
| Compressed Air Storage | 293 | +68% |
| Lithium-ion Batteries (4h) | 304 | N/A |
| Flow Batteries | N/A | +66% |
Thus, while thermal energy storage offers one of the lowest costs globally among long-duration storage technologies, the cost disadvantage outside China remains significant but is still competitive against lithium-ion batteries for long-duration applications. This dynamic reflects differing experience levels, policy support, and scale-up stages across regions.
Additional regional market trends indicate strong growth potential for TES in North America and Europe, driven by renewable energy integration and environmental targets. These regions are increasingly adopting TES despite currently higher costs, anticipating cost reductions through innovation and scale in the coming years.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-cost-of-thermal-energy-storage-in-non-china-markets-compare-to-other-energy-storage-technologies/
