Long-term cost projections for lithium-ion batteries (LIBs) in utility-scale storage applications indicate significant decreases in capital costs by 2030 and beyond, according to the most recent analyses by the National Renewable Energy Laboratory (NREL).
Cost Projections Overview
- The baseline cost in 2022 for a 4-hour lithium-ion battery system is approximately $482 per kilowatt-hour (kWh).
- By 2030, costs are projected to drop to a range of:
- Low scenario: $255/kWh
- Mid scenario: $326/kWh
- High scenario: $403/kWh
- By 2050, these costs could further decline to:
- Low scenario: $159/kWh
- Mid scenario: $237/kWh
- High scenario: $380/kWh
Key Considerations
- These projections focus primarily on 4-hour duration utility-scale systems, which are common for grid applications balancing renewables and peak demand.
- The cost reductions result from anticipated technological improvements, economies of scale, and supply chain optimizations in cell manufacturing and system integration.
- Total system costs include not only battery cell costs but also inverters and balance of system equipment essential for deployment.
- In the near term, prices for battery energy storage systems (BESS) in the US market are expected to continue falling, for example, a predicted 18% reduction in 2024 to about $148/kWh for 20-foot container systems.
- Current average cell prices for stationary storage are reported around $110/kWh, indicating progress towards these projected system-level costs.
Summary Table of Long-Term Projected Costs for 4-hour Lithium-Ion Storage Systems
| Year | Low Cost Projection ($/kWh) | Mid Cost Projection ($/kWh) | High Cost Projection ($/kWh) |
|---|---|---|---|
| 2022 | 482 | 482 | 482 |
| 2030 | 255 | 326 | 403 |
| 2050 | 159 | 237 | 380 |
These projections suggest a roughly 50-67% reduction in lithium-ion battery system costs over the next three decades, with mid-range estimates falling below $250/kWh by 2050. This trend supports expanding deployment of utility-scale energy storage to facilitate renewable integration and grid reliability.
References
- NREL, “Cost Projections for Utility-Scale Battery Storage: 2023 Update”
- NREL, “Utility-Scale Battery Storage 2024”
- ESource, “Battery Prices Decreasing: Utility-Scale Energy Storage”
- CEA Report, “BESS Prices to Fall 18% in 2024 US Market”
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-long-term-cost-projections-for-lithium-ion-batteries-in-utility-scale-storage-applications/
