NRELisanationallaboratoryoftheU.S.DepartmentofEnergyOfficeofEnergyEfficiency&RenewableEnergyOperatedbytheAllianceforSustainableEnergy,LLCThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratory(NREL)atwww.nrel.gov/publications.ContractNo.DE-AC36-08GO28308TechnicalReportNREL/TP-6A40-85332June2023CostProjectionsforUtility-ScaleBatteryStorage:2023UpdateWesleyColeandAkashKarmakarNationalRenewableEnergyLaboratoryNRELisanationallaboratoryoftheU.S.DepartmentofEnergyOfficeofEnergyEfficiency&RenewableEnergyOperatedbytheAllianceforSustainableEnergy,LLCThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratory(NREL)atwww.nrel.gov/publications.ContractNo.DE-AC36-08GO28308NationalRenewableEnergyLaboratory15013DenverWestParkwayGolden,CO80401303-275-3000•www.nrel.govTechnicalReportNREL/TP-6A40-85332June2023CostProjectionsforUtility-ScaleBatteryStorage:2023UpdateWesleyColeandAkashKarmakarNationalRenewableEnergyLaboratorySuggestedCitationCole,WesleyandAkashKarmakar.2023.CostProjectionsforUtility-ScaleBatteryStorage:2023Update.Golden,CO:NationalRenewableEnergyLaboratory.NREL/TP-6A40-85332.https://www.nrel.gov/docs/fy23osti/85332.pdf.NOTICEThisworkwasauthoredbytheNationalRenewableEnergyLaboratory,operatedbyAllianceforSustainableEnergy,LLC,fortheU.S.DepartmentofEnergy(DOE)underContractNo.DE-AC36-08GO28308.FundingprovidedbyU.S.DepartmentofEnergyOfficeofEnergyEfficiencyandRenewableEnergyStrategicPrograms,PolicyandAnalysisOffice.TheviewsexpressedhereindonotnecessarilyrepresenttheviewsoftheDOEortheU.S.Government.ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratory(NREL)atwww.nrel.gov/publications.U.S.DepartmentofEnergy(DOE)reportsproducedafter1991andagrowingnumberofpre-1991documentsareavailablefreeviawww.OSTI.gov.CoverPhotosbyDennisSchroeder:(clockwise,lefttoright)NREL51934,NREL45897,NREL42160,NREL45891,NREL48097,NREL46526.NRELprintsonpaperthatcontainsrecycledcontent.iiiThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.AcknowledgmentsWearegratefultoReEDSmodelingteamfortheirinputonthiswork.WealsothankBethanyFrew,VigneshRamasamy,andMattRippeforprovidingfeedbackonthisyear’sreport.ThisworkwasauthoredbytheNationalRenewableEnergyLaboratory,operatedbyAllianceforSustainableEnergy,LLC,fortheU.S.DepartmentofEnergy(DOE)underContractNo.DE-AC36-08GO28308.FundingprovidedbyU.S.DepartmentofEnergyOfficeofEnergyEfficiencyandRenewableEnergyStrategicAnalysisteam.TheviewsexpressedinthearticledonotnecessarilyrepresenttheviewsoftheDOEortheU.S.Government.Allerrorsandomissionsarethesoleresponsibilityoftheauthors.ivThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.ExecutiveSummaryInthisworkwedescribethedevelopmentofcostandperformanceprojectionsforutility-scalelithium-ionbatterysystems,withafocuson4-hourdurationsystems.Theprojectionsaredevelopedfromananalysisofrecentpublicationsthatincludeutility-scalestoragecosts.Thesuiteofpublicationsdemonstrateswidevariationinprojectedcostreductionsforbatterystorageovertime.FigureES-1showsthesuiteofprojectedcostreductions(onanormalizedbasis)collectedfromtheliterature(showningray)aswellasthelow,mid,andhighcostprojectionsdevelopedinthiswork(showninblack).FigureES-2showstheoverallcapitalcostfora4-hourbatterysystembasedonthoseprojections,withstoragecostsof$245/kWh,$326/kWh,and$403/kWhin2030and$159/kWh,$226/kWh,and$348/kWhin2050.Batteryvariableoperationsandmaintenancecosts,lifetimes,andefficienciesarealsodiscussed,withrecommendedvaluesselectedbasedonthepublicationssurveyed.FigureES-1.Batterycostprojectionsfor4-hourlithium-ionsystems,withvaluesnormalizedrelativeto2022.Thehigh,mid,andlowcostprojectionsdevelopedinthisworkareshownasboldedlines.FigureES-2.Batterycostprojectionsfor4-hourlithium-ionsystems.00.20.40.60.8120202025203020352040204520504-hrBatteryCostProjections(relativeto2022)HighMidLowLiteratureValues010020030040050060020202025203020352040204520504-hourBatteryCapitalCost(2022$/kWh)HighMidLowvThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.TableofContents1Background...........................................................................................................................................12Methods.................................................................................................................................................13ResultsandDiscussion.......................................................................................................................44Summary...............................................................................................................................................9References.................................................................................................................................................10Appendix....................................................................................................................................................12ListofFiguresFigureES-1.Batterycostprojectionsfor4-hourlithium-ionsystems,withvaluesrelativeto2022..........ivFigureES-2.Batterycostprojectionsfor4-hourlithiumionsystems.........................................................ivFigure1.Batterycostprojectionsfor4-hourlithium-ionsystems,withvaluesrelativeto2022.................4Figure2.Batterycostprojectionsfor4-hourlithiumionsystems................................................................5Figure3.Currentbatterystoragecostsfromrecentstudies..........................................................................5Figure4.Costprojectionsforpower(left)andenergy(right)componentsoflithium-ionsystems.............6Figure5.Costprojectionsfor2-,4-,and6-hourdurationbatteriesusingthemidcostprojection..............7Figure7.Comparisonofcostprojectionsdevelopedinthisreport(solidlines)againstthevaluesfromthe2021costprojectionreport(Cole,Frazier,andAugustine2021)(dashedlines)...................14Figure8.Comparisonofcostprojectionsdevelopedinthisreport(solidlines)thevaluesfromthe2021costprojectionreport(Cole,Frazier,andAugustine2021)(dashedlines),withallvaluesnormalizedtothe“Mid”costprojectionintheyear2020.....................................................14ListofTablesTable1.Listofpublicationsusedinthisstudytodeterminebatterycostandperformanceprojections......2Table2.ValuesfromFigure1andFigure2,whichshowthenormalizedandabsolutestoragecostsovertime.Storagecostsareovernightcapitalcostsforacomplete4-hourbatterysystem...........131ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.1BackgroundBatterystoragecostshavechangedrapidlyoverthepastdecade.In2016,theNationalRenewableEnergyLaboratory(NREL)publishedasetofcostprojectionsforutility-scalelithium-ionbatteries(Coleetal.2016).Those2016projectionsreliedheavilyonelectricvehiclebatteryprojectionsbecauseutility-scalebatteryprojectionswerelargelyunavailablefordurationslongerthan30minutes.In2019,batterycostprojectionswereupdatedbasedonpublicationsthatfocusedonutility-scalebatterysystems(ColeandFrazier2019),withupdatespublishedin2020(ColeandFrazier2020)and2021(Cole,Frazier,andAugustine2021).Therewasnoupdatepublishedin2022.Thisreportupdatesthosecostprojectionswithdatapublishedin2021,2022,andearly2023.Theprojectionsinthisworkfocusonutility-scalelithium-ionbatterysystemsforuseincapacityexpansionmodels.TheseprojectionsformtheinputsforbatterystorageintheAnnualTechnologyBaseline(NREL2022).TheprojectionsarethenutilizedinNREL’scapacityexpansionmodels,includingtheRegionalEnergyDeploymentSystem(ReEDS)(Hoetal.2021)andtheResourcePlanningModel(RPM)(Maietal.2013).2MethodsThecostandperformanceprojectionsdevelopedinthisworkusealiterature-basedapproachinwhichprojectionsaregenerallybasedonthelow,median,andhighestvaluesfromtheliterature.Table1liststhepublicationsthatarepresentedinthiswork.Becauseofrapidpricechangesanddeploymentexpectationsforbatterystorage,onlythepublicationsreleasedin2022and2023areusedtocreatetheprojections.InadditiontothepublicationsinTable1,wealsoincludea2020reportbytheElectricPowerResearchInstitute(EPRI2020)foroperationsandmaintenance(O&M)andperformanceassumptions,butwedonotusetheircostprojectionbecauseitwaspublishedbefore2022.Thereareanumberofchallengesinherentindevelopingcostandperformanceprojectionsbasedonpublishedvalues.Firstamongthoseisthatthedefinitionofthepublishedvaluesisnotalwaysclear.Forexample,dollaryear,onlineyear,duration,depth-of-discharge,lifetime,andO&Marenotalwaysdefinedinthesameway(orevendefinedatall)foragivensetofvalues.Assuch,someofthevaluespresentedhererequiredinterpretationfromthesourcesspecified.Second,manyofthepublishedvaluescomparetheirpublishedprojectionagainstprojectionsproducedbyothers,anditisunclearhowmuchtheprojectionsrelyuponone-another.Thus,ifoneprojectionisusedtoinformanother,thatprojectionmightartificiallybiasourresults(towardthatparticularprojection)morethanothers.Third,becauseoftherelativelylimiteddatasetforactualbatterysystemsandtherapidlychangingcosts,itisnotclearhowdifferentbatteryprojectionsshouldbeweighted.Forexample,shouldprojectionspublishedinthelatterhalfof2022begivenhigherweightthanthosepublishedearlier?Oraresomeorganizationsbetteratmakingprojectionsorcapturingsupplychaindisruptions,andthereforeshouldbegivenhigherweight?Intheinterestofprovidinganeutralsurveyofthecurrentliterature,allcostprojectionsincludedinthisreportareweightedequally.Asweperformedourreviewofpublishedprojections,wefoundthatmanyofthemcitedeitherthepreviousupdatesofthisreport,ortheycitedtheAnnualTechnologyBaseline,whichalsoreliesonthiscostprojectionreportforitsinputs.Thus,2ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.includingallofthelatestpublishedprojectionswouldcreateknownredundancies(perthesecondchallengelistedabove)andwerethereforeexcludedfromthiswork.Insomecases,ourpreviousworkwasprovidedasastartingpointforprojections,andthenadjustmentsweremadetobettercaptureanalysts’viewofbatterystoragepricing.Ifthatwasthecase,weconsideredtheprojectionuniqueandincludeditinoursurvey.Table1.Listofpublicationsusedinthisstudytodeterminebatterycostandperformanceprojections.Inseveralcasesconsultantswereinvolvedincreatingthestoragecostprojections.Intheseinstanceswelisttheconsultingfirmfirst,followedbytheorganizationtheyaresupporting.OrganizationSourceAESIndianaAESIndiana2022IntegratedResourcePlan(AESIndiana2022)BNEFBullard(2023)BrattleNewelletal.(2022)CharlesRiverAssociates(CRA)/DukeEnergyDukeEnergyandCRA(2022)E3/NewYorkDepartmentofPublicService(NYDPS)/NewYorkStateEnergyResearchandDevelopmentAuthority(NYSERDA)NewYork’s6GWEnergyStorageRoadmap(NYDPSandNYSERDA2022)ESourceJaffe(2022)EnergyInformationAdministration(EIA)AnnualEnergyOutlook2023(EIA2023)AscendAnalytics/GrantPublicUtilityDistrict(PUD)GrantPUDIntegratedResourcePlan2022(GrantPUD2022)GuidehouseGuidehouse(2021)InternationalEnergyAgencyWorldEnergyOutlook2022(IEA2022)IHS/PJMHuntingtonandWang(2022)LazardLazard(2021)PacificNorthwestNationalLaboratory(PNNL)Viswanathanetal.(2022)Siemens/PublicServiceCompanyofNewMexico(PNM)PNMandSiemens(2022)Tri-StateGeneration&TransmissionAssociationAll-SourceSolicitation30-DayReport(2022)WoodMackenzieWoodMackenzie(2022)Allcostvalueswereconvertedto2022$usingtheconsumerpricingindex.Incaseswherethedollaryearwasnotspecified,thedollaryearwasassumedtobethesameasthepublicationyear.Whenfuturecostswerepresentedinnominaldollars,theywereconvertedtorealdollarsusingtheinflationratespecifiedbythedocument.Ifnoinflationratewasfoundinthedocument,wefoundusedtheinflationrateassumedinotherrecentdocumentsproducedbythesameorganization.3ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Weonlyusedprojectionsfor4-hourlithium-ionstoragesystems.Wedefinethe4-hourdurationastheoutputdurationofthebattery,suchthata4-hourdevicewouldbeabletodischargeatratedpowercapacityfor4-hours.Inpracticethatwouldmeanthatthedevicewouldchargeformorethan4hoursandwouldnominallyholdmorethanitsratedenergycapacityinordertocompensateforlossesduringchargeanddischarge.Wereportourpriceprojectionsasatotalsystemovernightcapitalcostexpressedinunitsof$/kWh.However,notallcomponentsofthebatterysystemcostscaledirectlywiththeenergycapacity(i.e.,kWh)ofthesystem(Ramasamyetal.2022).Forexample,theinvertercostsscaleaccordingtothepowercapacity(i.e.,kW)ofthesystem,andsomecostcomponentssuchasthedevelopercostscanscalewithbothpowerandenergy.Byexpressingbatterycostsin$/kWh,wearedeviatingfromotherpowergenerationtechnologiessuchascombustionturbinesorsolarphotovoltaicplantswherecapitalcostsareusuallyexpressedas$/kW.Weusetheunitsof$/kWhbecausethatisthemostcommonwaythatbatterysystemcostshavebeenexpressedinpublishedmaterialtodate.The$/kWhcostswereportcanbeconvertedto$/kWcostssimplybymultiplyingbytheduration(e.g.,a$300/kWh,4-hourbatterywouldhaveapowercapacitycostof$1200/kW).Todevelopcostprojections,storagecostswerenormalizedtotheir2022valuesuchthateachprojectionstartedwithavalueof1in2022.Wechosetousenormalizedcostsratherthanabsolutecostsbecausesystemswerenotalwaysclearlydefinedinthepublications.Forexample,itisnotclearifasystemismoreexpensivebecauseitismoreefficientandhasalongerlifetime,oriftheauthorssimplyanticipatehighersystemcosts.Withthenormalizedmethod,manyofthedifferencesmattertoalesserdegree.Wedefinedourlow,mid,andhighprojectionsastheminimum,median,andmaximumpoint,respectivelyin2023,2024,2025and2030.Theminimumandmedianpointswerealsodefinedinthesamewaybecausetheminimumandmedianprojectionsextendedthrough2050.Themaximumprojectionin2030didnotextendthrough2050.Oneprojectionshowedonlya5.8%costdeclinefrom2030to2050,soweusedthisasthebasisforextendingthehighestcost2030projectionthroughto2050.Inotherwords,thehighestcostprojectionin2030wasassumedtodeclineby5.8%through2050.Pointsinbetween2025,2030,and2050weresetbasedonlinearinterpolationbetweenyearswithvaluesassigned.Toconvertthesenormalizedlow,mid,andhighprojectionsintocostvalues,thenormalizedvaluesweremultipliedbythe4-hourbatterystoragecostfromRamasamyetal.(2022)toproduce4-hourbatterysystemscosts.Toestimatethecostsforotherstoragedurations(i.e.,durationsotherthan4hours),weassignseparateenergycostsandpowercostssuchthatTotalCost($/kWh)=EnergyCost($/kWh)+PowerCost($/kW)/Duration(hr)Toseparatethetotalcostintoenergyandpowercomponents,weusedtherelativeenergyandpowercostsfromAugustineandBlair(2021).Theserelativesharesareprojectedthrough2050,enablinganapproachforcalculatingthecostforanydurationofenergystorage.Becausewe4ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.focusprimarilyonmulti-hourbatteryconfigurations,wecautionagainstusingthisapproachtocalculatebatterystoragecostswithlessthanonehourduration.Themethodemployedinthisworkreliessolelyonliteratureprojections.Itdoesnottakeintoaccountotherfactorsthatmightimpactcostsovertime,suchasmaterialsavailability,marketsize,andpolicyfactors.Unlesstheseandotherfactorsarenotcapturedintheworksurveyed,thentheywillnotbereflectedintheprojectionproducedhere.3ResultsandDiscussionThenormalizedcosttrajectorieswiththelow,mid,andhighprojectionsareshowninFigure1.Thehighprojectionfollowsthehighestcosttrajectorythrough2030.Thisincludescostincreasesthrough2025,withcostsonlybeinglowerthanthe2022costsstartingin2026.After2030,thehighprojectiondeclinesby5.8%asdescribedinthemethodssection.Themidandlowprojectionshaveinitialslopesbeingsteeperthanlaterslopes,indicatingthatmostpublicationsseelargercostreductionsinthenear-termthatthenslowovertime.By2030,costsarereducedby47%,32%,and16%inthelow,mid,andhighcases,respectively,andby2050arereducedby67%,51%,and21%,respectively.Figure1.Batterycostprojectionsfor4-hourlithium-ionsystems,withvaluesrelativeto2022.Thehigh,mid,andlowcostprojectionsdevelopedinthisworkareshownasboldedlines.Publishedprojectionsareshownasgraylines.FigurevaluesareincludedintheAppendix.Theresultingtotalsystemcostfora4-hourbatterystoragedeviceisshowninFigure2.The2022startingpointof$482/kWhistakenfromRamasamyetal.(2022).Althoughthereisuncertaintyinthe2022cost(whichisdiscussedlater),weuseasinglecostfor2022forconvenienceasweapplythesecostsinourlong-termplanningmodels(applyingthesamecostsin2022meansthatthe2022solutionwillnotchangeasweshiftfroma“high”toa“mid”toa“low”costprojectionforstorage).Bydefinition,theprojectionsfollowthesametrajectoriesasthenormalizedcostvalues.Storagecostsare$255/kWh,$326/kWh,and$403/kWhin2030and$159/kWh,$237/kWh,and$380/kWhin2050.CostsforeachyearandeachtrajectoryareincludedintheAppendix.00.20.40.60.8120202025203020352040204520504-hrBatteryCostProjections(relativeto2022)HighMidLowLiteratureValues5ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Figure2.Batterycostprojectionsfor4-hourlithium-ionsystems.Thesevaluesrepresentovernightcapitalcostsforthecompletebatterysystem.FigurevaluesareincludedintheAppendix.Oneofthekeyassumptionsinourprojectionsisthechoiceofthestartingpoint.Ahigherorlowerstartingpointwouldshiftthesetofprojectionsupordownrelativetothechangeinmagnitudeofthestartingpoint.Tobetterassessthequalityofourstartingpoint,wecomparedthevaluefromNREL’scostestimatefromRamasamyetal.(2022)withotherrecentlypublishedvalues(showninFigure3).Thiscomparisonshowsthatourstartingpointisonthehighendbutgenerallywithintherangeofestimatedcurrentpricing.Thishigherstartingpointisthesinglelargestdriverforwhythisyear’scostprojectionsarehigherthanthosepreviouslypublished.Figure3.Currentbatterystoragecostsfromrecentstudies.TheNRELvalue(Ramasamyetal.2022)wasselectedasthe2022startingcostforthiswork.010020030040050060020202025203020352040204520504-hourBatteryCapitalCost(2022$/kWh)HighMidLow0100200300400500600700Current4-hourbatterycost(2022$/kWh)6ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Oneoftheotherchallengeswithusingthenormalizedcostreductionstodevelopourprojectionsisthatprojectionsthatstartatahighervaluethanourstartingpointmightseegreatercostreductionpotential,andthushaveahighpercentreductionbutstillneverhavealow$/kWhcost.Conversely,projectionsthatstartlowerthanourstartingpointmighthavesmallercostreductionpotentialonapercentagebasisbutachieveverylow$/kWhcosts.However,westillprefertousethenormalizedcostreductionnumbersbecauseofthelargediscrepancyinstartingcostsacrosspublishedprojections,andbecauseithelpstoobviatethechallengeofdifferentcostandsystemdefinitionsinthedifferentpublications.Figure4showsthecostprojectionsforthepowerandenergycomponentsofthebattery.Thesecomponentsarecombinedtogiveatotalsystemcost,wherethesystemcost(in$/kWh)isthepowercomponentdividedbythedurationplustheenergycomponent.Figure4.Costprojectionsforenergy(left)andpower(right)componentsof4-hourlithium-ionsystems.Notethedifferentunitsinthetwoplots.Thesepowerandenergycostscanbeusedtospecifythecapitalcostsforotherdurations.Figure5showsthecostprojectionsfor2-,4-,and6-hourdurationbatteries(usingthemidprojectiononly).Ona$/kWhbasis,longerdurationbatterieshavealowercapitalcost,andona$/kWbasis,shorterdurationbatterieshavealowercapitalcost.Figure5(left)alsodemonstrateswhyitiscriticaltocitethedurationwheneverprovidingacapitalcostin$/kWhor$/kW.0501001502002503003504004502020203020402050CostofEnergyComponents(2022$/kWh)HighLowMid0501001502002503003504004502020203020402050CostofPowerComponents(2022$/kW)LowHighMid7ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Figure5.Costprojectionsfor2-,4-,and6-hourdurationbatteriesusingthemidcostprojection.Leftshowsthevaluesin$/kWh,whilerightshowsthecostsin$/kW.Tofullyspecifythecostandperformanceofabatterystoragesystemforcapacityexpansionmodelingtools,additionalparametersbesidesthecapitalcostsareneeded.Figure6showstherangeofvariableoperationsandmaintenance(VOM),fixedoperationsandmaintenance(FOM),lifetime,andround-tripefficiency1assumptionsfromthepublicationssurveyed.Therightmostpointinthefigureshowsthevaluethatwehaveselectedtorepresentour4-hourbatterysystem.TheVOMisoftentakentobezeroornearzero,andwehaveadoptedzerofortheVOM.ThisVOMisdefinedtocoincidewithanassumedonecycleperdayandagivencalendarlifetime.Thethreepublicationsshowingnon-zero,butstillsmall,VOMvaluesindicatethatthereisnotconsensusthattheVOMshouldbezero.Wehaveallocatedalloperatingcosts(attheone-cycle-per-daylevel)totheFOM.ByputtingtheoperationsandmaintenancecostsintheFOMratherthantheVOMweinessenceassumethatbatteryperformancehasbeenguaranteedoverthelifetime,suchthatoperatingthebatterydoesnotincuranycoststothebatteryoperator.TheFOMhasamuchbroaderrangeofvalues.OneoftheprimarydifferencesinthelevelofFOMwaswhetheraugmentationorperformancemaintenancewereincludedinthecost.LowerFOMnumberstypicallyincludeonlysimplemaintenancewhilehigherFOMnumbersincludesomecapacityadditionsorreplacementstoaddressdegradation.WehaveadoptedaFOMvaluefromthehighendandassumethattheFOMcostwillcounteractdegradationsuchthatthesystemwillbeabletoperformatratedcapacitythroughoutitslifetime.2TheFOMvalueselectedis2.5%ofthe$/kWcapacitycostfora4-hourbattery.WeassumethatthisFOMisconsistentwithprovidingapproximatelyonecycleperday.1Round-tripefficiencyisdefinedasthesystemefficiencythroughacharge/dischargecycle.Forexample,itwouldincludelossesassociatedwithcoolingsystemsorbatterycontrolequipment.2TheBrattlepublication(Newelletal.2022)performsadetailedanalysisoftheoperationsandmaintenancecostsneededtokeepthebatteryatratedcapacitythroughoutitslifetime,andtheirreportedcostiswell-alignedwiththevaluewehavechosen.However,Brattlealsoassumedalowerstoragecostthanwhatweassumehere,buthasasimilartotalFOMcost,sobasedontheiranalysisanevenhigherFOMvalueforourprojectionmightbejustified.4-hour01002003004005006007002020203020402050BatteryCapitalCost(2022$/kWh)2-hour6-hour0500100015002000250030002020203020402050BatteryCapitalCost(2020$/kW)2-hour4-hour6-hour8ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Ifthebatteryisoperatingatamuchhigherrateofcycling,thenthisFOMvaluemightnotbesufficienttocounteractdegradation.Figure6.VariableO&M(topright),fixedO&M(topleft),lifetime(bottomright),andround-tripefficiency(bottomleft)fromvariouspublishedsources.Thevaluesselectedforthisstudyaretheright-mostvaluesshown.Thelifetimeweselectedis15years,whichisconsistentwiththemedianofthepublishedvalues.Theround-tripefficiencyischosentobe85%,whichiswellalignedwithpublishedvalues.00.511.522.534-hrBatteryVOM(2022$/MWh)01020304050604-hrBatteryFOM(2022$/kW-yr)0510152025Lifetime(years)60%65%70%75%80%85%90%95%100%Round-tripEfficiency9ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.4SummaryBatterystoragecostshaveevolvedrapidlyoverthepastseveralyears,necessitatinganupdatetostoragecostprojectionsusedinlong-termplanningmodelsandotheractivities.Thisworkdocumentsthedevelopmentoftheseprojections,whicharebasedonrecentpublicationsofstoragecosts.Theprojectionsshowawiderangeofstoragecosts,bothintermsofcurrentcostsaswellasfuturecosts.Inthenearterm,someprojectionsshowincreasingcostswhileothersshowsubstantialdeclines,withcostreductionsby2025of-3%to36%.Thecostprojectionsdevelopedinthisworkutilizethenormalizedcostreductionsacrosstheliterature,andresultin16-49%capitalcostreductionsby2030and28-67%costreductionsby2050.Thecostprojectionsarealsoaccompaniedbyassumedoperationsandmaintenancecosts,lifetimes,andround-tripefficiencies,andtheseperformancemetricsarebenchmarkedagainstotherpublishedvalues.Manyfactorsmightinfluencehowcostsevolvegoingforwardincludingmarketdemand,supplychainexpansionsorconstraints,interplaywithothersectorssuchelectricvehicles,andmaterialcostsandavailability.10ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.ReferencesAESIndiana.2022.“AESIndiana2022IntegratedResourcePlanVolumeII.”AESIndiana.https://www.aesindiana.com/sites/default/files/2022-12/AES-Indiana-2022-IRP-Volume-II.pdf.Augustine,Chad,andNateBlair.2021.“EnergyStorageFuturesStudy:StorageTechnologyModelingInputDataReport.”NREL/TP-5700-78694.Golden,CO:NationalRenewableEnergyLaboratory.https://www.nrel.gov/docs/fy21osti/78694.pdf.Bullard,Nathaniel.2023.“EvenHighBatteryPricesCan’tChilltheHotEnergyStorageSector.”Bloomberg.Com,January12,2023.https://www.bloomberg.com/news/articles/2023-01-12/even-high-battery-prices-can-t-chill-the-hot-energy-storage-sector.Cole,Wesley,andWillA.Frazier.2019.“CostProjectionsforUtility-ScaleBatteryStorage.”TechnicalReportNREL/TP-6A20-73222.Golden,CO:NationalRenewableEnergyLaboratory.https://doi.org/10.2172/1529218.———.2020.“CostProjectionsforUtility-ScaleBatteryStorage:2020Update.”TechnicalReportNREL/TP-6A20-75385.Golden,CO:NationalRenewableEnergyLaboratory.https://www.nrel.gov/docs/fy20osti/75385.pdf.Cole,Wesley,WillA.Frazier,andChadAugustine.2021.“CostProjectionsforUtility-ScaleBatteryStorage:2021Update.”TechnicalReportNREL/TP-6A20-79236.Golden,CO:NationalRenewableEnergyLaboratory.https://www.nrel.gov/docs/fy21osti/79236.pdf.Cole,Wesley,CaraMarcy,VenkatKrishnan,andRobertMargolis.2016.“Utility-ScaleLithium-IonStorageCostProjectionsforUseinCapacityExpansionModels.”In2016NorthAmericanPowerSymposium(NAPS),1–6.Denver,CO,UnitedStates:IEEE.https://doi.org/10.1109/NAPS.2016.7747866.DukeEnergy,andCRA.2022.“DukeEnergyIndiana2022CPCNInformationSharingSession1.”DukeEnergyandCharlesRiverAssociates.https://desitecore10prod-cd.azureedge.net/-/media/pdfs/our-company/dei-irp-information-sharing-session-1.pdf?rev=c684406d33cb4828ae510172fa8db83c.EIA.2023.“AnnualEnergyOutlook2023.”Washington,D.C.:U.S.EnergyInformationAdministration.https://www.eia.gov/outlooks/aeo/.EPRI.2020.“BatteryEnergyStorageLifecyleCostAssessmentSummary:2020.”3002020048.PaloAlto,CA:ElectricPowerResearchInstitute.https://www.epri.com/research/products/000000003002020048.GrantPUD.2022.“IntegratedResourcePlan2022.”Ephrata,Washington:GrantPublicUtilityDistrict.https://www.grantpud.org/templates/galaxy/images/Exhibit_A_2022_Integrated_Resource_Plan.pdf.Guidehouse.2021.“ExecutiveSummary:EnergyStoragePricingTrends.”Guidehouse.https://guidehouseinsights.com/reports/energy-storage-pricing-trends.Ho,Jonathan,JonathonBecker,MaxwellBrown,PatrickBrown,Ilya(ORCID:0000000284917814)Chernyakhovskiy,StuartCohen,Wesley(ORCID:000000029194065X)Cole,etal.2021.“RegionalEnergyDeploymentSystem(ReEDS)ModelDocumentation:Version2020.”NREL/TP-6A20-78195.Golden,CO:NationalRenewableEnergyLaboratory.https://doi.org/10.2172/1788425.Huntington,Sam,andTiffanyWang.2022.“PJMSolarandBatteryForecast2022:PhaseIIForecasts.”IHSMarkit.https://www.pjm.com/-/media/committees-groups/subcommittees/las/2022/20221129/item-03a---ihs-markit---pjm-solar-and-battery-11ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.forecasts.ashx#:~:text=Solar%20costs%20decline%20by%2017,low%20prices%20and%20widespread%20availability.IEA.2022.“WorldEnergyOutlook2022.”Paris,France:InternationalEnergyAgency.https://iea.blob.core.windows.net/assets/830fe099-5530-48f2-a7c1-11f35d510983/WorldEnergyOutlook2022.pdf.Jaffe,Sam.2022.“ABatteryCostsHowMuch?”ESource.https://www.esource.com/system/files/esource-battery-costs-webinar.pdf.Lazard.2021.“Lazard’sLevelizedCostofStorageAnalysis—Version7.0.”https://www.lazard.com/media/451882/lazards-levelized-cost-of-storage-version-70-vf.pdf.Mai,Trieu,EasanDrury,KellyEurek,NatalieBodington,AnthonyLopez,andAndrewPerry.2013.“ResourcePlanningModel:AnIntegratedResourcePlanningandDispatchToolforRegionalElectricSystems.”TP-6A20-56723.NationalRenewableEnergyLaboratory.http://www.nrel.gov/docs/fy13osti/56723.pdf.Newell,SamuelA.,J.MichaelHagerty,JohannesPfeifenberger,BinZhou,TravisCarless,RohanJanakiraman,SangH.Gang,PatrickS.Daou,andJoshuaC.Junge.2022.“PJMCONE2026/2027Report.”TheBrattleGroupandSargent&Lundy.https://www.pjm.com/-/media/library/reports-notices/special-reports/2022/20220422-brattle-final-cone-report.ashx.NREL.2022.“2022AnnualTechnologyBaseline.”Golden,CO:NationalRenewableEnergyLaboratory.https://atb.nrel.gov/.NYDPS,andNYSERDA.2022.“NewYork’s6GWEnergyStorageRoadmap:PolicyOptionsforContinuedGrowthinEnergyStorage.”Case18-E-0130.NewYorkStateDepartmentofPublicServiceandtheNewYorkStateEnergyResearchandDevelopmentAuthority.https://www.nyserda.ny.gov/-/media/Project/Nyserda/Files/Programs/Energy-Storage/ny-6-gw-energy-storage-roadmap.pdf.PNM,andSiemens.2022.“PNM2023-2042IRP:SiemensMarketPriceOutlook,ItronLoadForecast,andPricingTopics.”https://www.pnmforwardtogether.com/assets/uploads/Slides-IRP-PAG-Steering-Meeting-13-Pricing-TOD-Market-Prices-Forecast-Load.pdf.Ramasamy,Vignesh,JarettZuboy,EricO’Shaughnessy,DavidFeldman,JalDesai,MichaelWoodhouse,PaulBasore,andRobertMargolis.2022.“U.S.SolarPhotovoltaicSystemandEnergyStorageCostBenchmarks,WithMinimumSustainablePriceAnalysis:Q12022.”NREL/TP-7A40-83586.Golden,CO:NationalRenewableEnergyLaboratory.https://doi.org/10.2172/1891204.Tri-State.2022.“2022All-SourceSolicitation30-DayReport(PublicVersion).”Tri-StateGeneration&TransmissionAssociation.Viswanathan,Vilayanur,KendallMongird,RyanFranks,andRichardBaxter.2022.“2022GridEnergyStorageTechnologyCostandPerformanceAssessment.”PNNL-33283.PacificNorthwestNationalLaboratory.https://www.pnnl.gov/sites/default/files/media/file/ESGC%20Cost%20Performance%20Report%202022%20PNNL-33283.pdf.WoodMackenzie.2022.“UnitedStatesLevelizedCostofElectricity(LCOE).”WoodMackenzie.12ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.AppendixTable2includesthevaluesthatareplottedinFigure1andFigure2.Figure7andFigure8showthecomparisonoftheprojectionsdevelopedinthisworkrelativetotheprojectionsthatwereproducedinourlastupdate(Cole,Frazier,andAugustine2021).The4-hourcostprojectionsinthisreportaremuchhigherin2022duetotheupdatedinitialcostfromRamasamyetal.(2022),andhighercostspersistthrough2050becauseofthathigherstartingpoint.Highernormalizedcostprojectionsinthisyear’supdatealsocontributetothehighercoststhroughouttheprojectionhorizon.Thisyear’supdateisalsothefirsttoseeincreasingcostsinthenearterm.13ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Table2.ValuesfromFigure1andFigure2,whichshowthenormalizedandabsolutestoragecostsovertime.Storagecostsareovernightcapitalcostsforacomplete4-hourbatterysystem.NormalizedCostReduction4-hourStorageCosts(2022$/kWh)YearLowMidHighLowMidHigh20221.001.001.0048248248220230.720.961.0434746350020240.680.921.0432744350320250.640.811.0331038849620260.620.780.9929737647720270.590.750.9528436345920280.560.730.9127135144020290.540.700.8825833842220300.510.680.8424532640320310.500.670.8324032140020320.490.660.8323631639820330.480.650.8223231139520340.470.630.8122730639220350.460.620.8122330138920360.450.610.8021929638720370.450.600.8021529138420380.440.590.7921028638120390.430.580.7920628137820400.420.570.7820227637620410.410.560.7719727137320420.400.550.7719326637020430.390.540.7618926136720440.380.530.7618525636520450.370.520.7518025136220460.370.510.7517624635920470.360.500.7417224135620480.350.490.7316723635320490.340.480.7316323135120500.330.470.7215922634814ThisreportisavailableatnocostfromtheNationalRenewableEnergyLaboratoryatwww.nrel.gov/publications.Figure7.Comparisonofcostprojectionsdevelopedinthisreport(solidlines)againstthevaluesfromthe2021costprojectionreport(Cole,Frazier,andAugustine2021)(dashedlines).Figure8.Comparisonofcostprojectionsdevelopedinthisreport(solidlines)thevaluesfromthe2021costprojectionreport(Cole,Frazier,andAugustine2021)(dashedlines),withallvaluesnormalizedtothe“Mid”costprojectionintheyear2020.010020030040050060020202025203020352040204520504-hourBatteryCapitalCost(2022$/kWh)LowMidHighLow-2021Mid-2021High-202100.20.40.60.811.220202025203020352040204520504-hourBatteryCapitalCost(normalized)LowMidHighLow-2021Mid-2021High-2021
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