By Brian Warshay

 

In our recent report Grid Storage Battery Cost Breakdown: Exploring Paths to Accelerate Adoption, Lux Research evaluated potential cost reduction and performance enhancement opportunities that will impact the capital costs of lithium-ion, molten-salt and flow batteries by 2022.

 

Baseline results reveal that the system capital costs for molten-salt batteries will be the lowest of the three chemistries evaluated, at $473/kWh in 2022. Following closely behind, lithium-ion batteries will reach $506/kWh, and vanadium-redox flow batteries (VRFB) will remain the most expensive, at $783/kWh by 2022. By evaluating each of the three chemistries in 24 different battery configurations from 5 kW to 1 MW, at six different discharge durations, it was possible to analyze the costs of 72 battery chemistry and system configuration combinations for each year from 2012 through 2022.

Although the costs of each chemistry are expected to decrease, lithium-ion batteries showed the most potential, dropping 45% relative to its costs in 2012, compared with a 12% cost reduction for both molten salt and VRFBs. However, molten salt and VRFB costs reduced by 27% and 40%, respectively, by increasing their discharge durations from two hours to seven hours, compared with a 12% cost reduction for the same change in lithium-ion battery discharge durations. This highlights the significant potential that molten salt and VRFBs have for longer discharge applications, such as renewable shifting or energy arbitrage.

 

Lithium-ion batteries showed a higher cost reduction potential for smaller and medium-size projects, especially for applications with space constraints, indicating the opportunities for lithium-ion batteries to continue to enter into commercial and residential solar storage projects.

 

Ultimately, without radical innovation, none of the mainstream grid storage chemistries available today are expected to have system costs below $450/kWh by 2022, indicating that that new technologies expecting to hit commercial scale within a decade will still have opportunities to enter the market if their performance is on par with existing technologies and their costs can dip below the $450/kWh floor.

 

Learn more

Register now for the Lux Research complimentary webinar, “The Future of the Vanadium Redox Flow Battery: Cost Reduction, Market Adoption, and Demand Growth,” on Aug. 7 at 11 a.m. EDT.

 

Brian Warshay is a research associate for Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.

 

Recommended reading…

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Video:  Community energy storage simulation - a first look

 

From the SGN Research Marketplace…

IDC - Business Strategy: Lithium Ion Manufacturing Global Buildout - Supply and Demand Forecasts

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Battery cost calculation

Brian, How are these battery costs/kWh calculated? Wholesale purchase costs of AGM or Gel lead acid batteries are around $170 / kWh (price / (Ah x V)) so you must be using some formula that considers life and depth of discharge? Jeff

Jeff Irish - 06/22/2012 - 09:03

What's included and what's not included

Brian, Those cost calculation is including only batteries (or cells)? or including essential components - like BMS for Lithium-ion Batteries? I don't think Lithium-ion Battery cost meaningful without BMS cost included. Let me know your ideas. Kyle

Kyle Kim - 06/28/2012 - 16:28

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