The cost of thermal energy storage (TES) systems varies across industries primarily based on the specific application scale, technology maturity, and regional market factors. Key points about cost variation include:
- Capital Expenditure (Capex) Costs: Globally, fully installed TES systems average around $232 per kWh of storage capacity, making them generally cheaper than lithium-ion battery systems, which average around $304/kWh for four-hour storage duration. However, within different markets, these costs can vary significantly. For example, outside China, TES system costs can be approximately 54% higher than the global average due to less mature deployment and scale economies.
- Regional Differences: China leads in gigawatt-hour scale TES projects with more favorable policies driving down costs and accelerating commercialization, thus demonstrating significantly lower capex costs compared to other countries.
- Industry and Application Specifics: Industrial applications with long-duration energy storage needs (beyond eight hours) benefit most from TES cost advantages relative to lithium-ion batteries. TES is particularly competitive for large-scale, grid-related storage and renewable energy integration given its ability to store thermal energy efficiently at scale.
- Cost per Energy Unit: Some models estimate TES operational costs around 13.5 cents per kWh-thermal based on a $350/kWh capex and a 10% internal rate of return (IRR), with scenarios projecting costs below 5 to 10 cents per kWh-th as technology matures.
- Technology Configuration Impact: Advanced TES systems, such as high-temperature particle storage used in electricity storage applications, show promise of significantly lower costs than competing long-duration storage technologies like compressed air energy storage (CAES) and pumped storage hydropower (PSH), offering more flexible siting and longer duration storage capabilities.
In summary, the cost of TES systems varies widely depending on geographic deployment scale, market maturity, and specific industrial applications. TES tends to be more cost-effective for long-duration and large-scale energy storage compared to battery systems, especially in markets like China where deployment scale and policy support are stronger. Costs can range from around $232/kWh capex globally to potentially lower operational costs per kWh-thermal in industrial contexts as the technology develops further.
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