The Levelized Cost of Storage (LCOS) is a crucial metric for evaluating the economic viability of energy storage systems. It captures all costs incurred throughout the system’s lifetime per unit of energy stored and discharged. LCOS is influenced by several factors, including investment costs, system efficiency, and storage duration.
How LCOS Changes with Increasing Duration
- Reduction in LCOS with Longer Durations: In some storage technologies, like pumped hydro storage, the cost per unit of energy decreases as the storage duration increases. This is because the power-related costs are higher, but the cost per unit of incremental energy is lower, allowing for economies of scale in longer-duration storage.
- Energy-to-Power Ratio: For other technologies, such as batteries, the cost structure varies. While increasing the energy-to-power ratio (i.e., longer discharge durations) can reduce the Levelized Cost of Storage in terms of energy-specific costs, the overall investment cost does not decrease proportionately. This is because the cost components related to power (e.g., inverters, AC/DC conversion) remain relatively constant.
- Technology-Specific Responses:
- Flow Batteries: These can be designed for any power and energy combination, allowing marginal increases in cost when extending capacity. This flexibility benefits long-duration applications by potentially reducing LCOS.
- Lithium-Ion Batteries: While their costs decrease for shorter durations, they are less optimized for long-duration applications due to higher costs per unit of energy.
- Impact on LCOE vs. LCOS: For energy storage, LCOS considers the cost of storing and discharging energy, whereas LCOE focuses on the cost of generating electricity. Both metrics are crucial for comparing different energy systems, but LCOS is specifically tailored for storage applications.
In summary, the relationship between LCOS and storage duration varies by technology. Some technologies, like pumped hydro, benefit from economies of scale in longer durations, while others, such as batteries, may see less direct cost reduction with increased duration due to fixed power-related costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-levelized-cost-of-storage-lcos-change-with-increasing-duration/
