Posted on 31 May 2024
Long-duration energy storage (LDES) may soon out-compete lithium-ion batteries in some applications, BloombergNEF said in a new study on Thursday.
These systems are being used in clean energy applications, such as displacing fossil fuel generators and addressing the intermittent sources of renewable power. It allows storage of energy from renewables over extended periods of time, days or weeks.
While many LDES are still in the early stages of development and more expensive than lithium-ion batteries, some have already or are set to achieve lower costs for durations of over eight hours.
For example, thermal energy storage and compressed air storage in 2023 had an average capital expenditure of $232 per kilowatt-hour and $293/kWh, respectively. In comparison, lithium-ion systems had an average capex of $304/kWh for four-hour duration systems.
Flow batteries and compressed air technologies have been the most in demand in the category, which could drive down costs in the future.
According to BNEF, the cost reduction rate of LDES technologies will depend on the expansion of deployment and how routes to market are developed in major regions. However, it will not be as fast as for lithium-ion batteries, at least in this decade, Kallanish learns.
Prices for Li-ion batteries are plummeting as they are extensively used in the transport and power sectors.
Currently, China is the leader in cost-effectiveness as favourable policies are driving adoption. The average capex in non-Chinese markets is 68% higher for compressed air storage, 66% higher for flow batteries and 54% higher for thermal energy storage.
“While costs for LDES technologies outside of China are higher, the US and Europe have a chance to invest in their own industries and drive innovation and deployment,” comments Evelina Stoikou, energy storage senior associate at BNEF.
“Markets outside of China are developing a wider range of technologies compared to China, including more technology types within flow batteries, compressed air, compressed gas, thermal, gravity and novel pumped hydro,” she adds. “We’ve seen interest in those regions driven by ambitious clean energy targets, higher lithium-ion battery costs and an effort to develop alternative technologies that do not rely on lithium.”
Source:Kallanish
