Projected Cost Trends for Utility-Scale Battery Storage Systems
Over the next decade, utility-scale battery storage systems, primarily lithium-ion, are expected to experience significant cost reductions. Here are the projected trends:
Cost Reduction Projections
- NREL Projections: The National Renewable Energy Laboratory (NREL) forecasts that costs for lithium-ion battery energy storage systems (BESS) could fall by 47%, 32%, and 16% by 2030 in low, mid, and high cost scenarios, respectively. By 2050, these reductions are projected to reach 67%, 51%, and 21%, with costs potentially dropping to $159/kWh, $237/kWh, and $380/kWh.
- Short and Long Term: In the short term, some scenarios suggest flat or increasing costs due to supply chain pressures. However, in the long term, reductions are largely driven by economies of scale and declining battery pack costs.
Factors Influencing Cost Trends
- Battery Cell Costs: The cost of battery cells, particularly lithium-iron-phosphate (LFP) and nickel-manganese-cobalt (NMC), is projected to decrease significantly. For instance, Fastmarkets predicts LFP pack prices could reach $100/kWh by 2025.
- Market Dynamics: Global demand, raw material prices, and geopolitical factors will influence market dynamics. Recent price drops are attributed to manufacturing overcapacity and lower raw material costs.
- Duration-Based Costs: Long-duration batteries (e.g., 10 hours) are expected to see more significant reductions compared to shorter-duration systems (e.g., 2 hours) due to economies of scale and technological advancements.
Impact on Energy Market
- Grid Integration: The increasing deployment of energy storage systems enhances grid reliability and supports economic growth in sectors like manufacturing.
- Long-Term Viability: Despite current trends, uncertainties such as geopolitical tensions and potential tariff changes could affect future growth and cost stability in the industry.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-projected-cost-trends-for-utility-scale-battery-storage-systems-over-the-next-decade/
