The long-term operational costs of Liquid Air Energy Storage (LAES) compared to other energy storage solutions are generally lower on a levelized cost basis, but with important economic feasibility caveats.
Cost Comparison and Levelized Cost of Storage (LCOS)
- LAES has been estimated to have a levelized storage cost of about $60 per MWh, which is roughly:
- One third the cost of lithium-ion battery storage.
- About half the cost of pumped hydropower storage.
- In terms of specific capital expenditures, examples from China suggest LAES investments range from approximately $882/kW to $1,177/kW, with corresponding LCOS between $0.105/kWh and $0.174/kWh depending on location and timing of investment.
- Compared to other long-duration storage technologies like Compressed Air Energy Storage (CAES), pumped storage hydropower (PSH), and hydrogen storage, LAES tends to have lower unit energy costs and better cost efficiency at long durations (e.g., 10+ hours), especially when considering the storage block cost.
Economic Viability and Operational Considerations
- Despite the comparatively low operational cost, LAES is not yet economically viable for private investors in most cases because the net present value (NPV) of the technology is negative under current market conditions — meaning operational revenues do not cover costs over the system’s lifetime.
- The economic feasibility improves significantly under scenarios aiming for 100% decarbonization by 2035, particularly in regions with favorable market conditions like Texas and Florida in the U.S.
- Operational costs factor in capital expenditures, ongoing maintenance, and the cost of electricity used for charging the system. Sensitivity analyses suggest weekly energy storage durations are more economically efficient than monthly durations, avoiding excess capacity costs.
- LAES has the advantage of using ambient air and electricity alone, with no contaminants involved, which might translate to lower environmental compliance and operational costs relative to chemical battery systems.
- Time-of-use pricing improvements and market conditions are critical to making LAES operations financially sustainable, indicating that operational costs alone do not determine viability but must be combined with favorable electricity market dynamics.
Summary Table of LAES vs Other Storage Solutions
| Technology | Approximate LCOS | Relative Cost vs LAES | Economic Viability | Notes |
|---|---|---|---|---|
| LAES | ~$60/MWh (~$0.105-0.174/kWh) | Baseline | Not broadly viable yet; viable in select decarbonization scenarios | Low environmental impact; low long-duration costs |
| Lithium-ion Batteries | ~3x LAES | Higher | Economically viable but high cost for long duration | High cycle cost, degradation issues |
| Pumped Hydropower (PSH) | ~2x LAES | Higher | Viable where geography allows | Large site-requirement; environmental concerns |
| CAES | Comparable or slightly higher at short durations; lower at very long durations | Similar to higher | Viability depends on geological sites | Requires suitable caverns |
| Hydrogen Storage | Variable, generally higher | Higher | Emerging technology; dependent on efficiency | Complex infrastructure |
Conclusion
Liquid Air Energy Storage offers significantly lower long-term operational costs compared to lithium-ion batteries and pumped hydropower, especially for long-duration energy storage. However, overall economic viability depends heavily on market conditions, decarbonization policies, and pricing mechanisms. Operationally, LAES benefits from clean inputs and relatively low maintenance costs but requires supportive investment environments or subsidies to become commercially attractive today.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-long-term-operational-costs-of-laes-compared-to-other-energy-storage-solutions/
