Cost Projections for Utility-Scale Battery Storage

1 nrel is a national laboratory of the Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Contract No. DE-AC36-08GO28308 Technical Report nrel /TP-6A20-73222 June 2019 Cost Projections for Utility-Scale Battery StorageWesley Cole and A. Will FrazierNational Renewable Energy Laboratory nrel is a national laboratory of the Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Contract No. DE-AC36-08GO28308 National Renewable Energy Laboratory 15013 Denver West Parkway Golden, CO 80401 303-275-3000 Technical Report nrel /TP-6A20-73222 June 2019 Cost Projections for Utility-Scale Battery StorageWesley Cole and A.

2 Will FrazierNational Renewable Energy Laboratory Suggested Citation Cole, Wesley, and A. Will Frazier. 2019. Cost Projections for Utility-Scale Battery Storage . Golden, CO: National Renewable Energy Laboratory. nrel /TP-6A20-73222. NOTICE This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by Department of Energy Office of Energy Efficiency and Renewable Energy (EERE) Office of Strategic Programs; EERE Solar Energy Technologies Office; EERE Water Power Technology Office; and the EERE Wind Energy Technology Office. The views expressed herein do not necessarily represent the views of the DOE or the Government.

3 This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Department of Energy (DOE) reports produced after 1991 and a growing number of pre-1991 documents are available free via Cover Photos by Dennis Schroeder: (clockwise, left to right) nrel 51934, nrel 45897, nrel 42160, nrel 45891, nrel 48097, nrel 46526. nrel prints on paper that contains recycled content. iii This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Acknowledgments We are grateful to ReEDS modeling team for their input on this work. We also thank Paul Denholm ( nrel ), David Feldman ( nrel ), Ryan Hledik (Brattle), Cara Marcy (EIA), Tom Simchak (Energy Storage Association), and Daniel Steinberg ( nrel ) for providing feedback on this report.

4 This report was jointly funded by the EERE Office of Strategic Programs, Solar Energy Technologies Office, Water Power Technology Office, and Wind Energy Technology Office, under contract number DE-AC36-08GO28308. All errors and omissions are the sole responsibility of the authors. iv This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Executive Summary In this work we document the development of cost and performance Projections for Utility-Scale lithium-ion Battery systems, with a focus on 4-hour duration systems. The Projections are developed from an analysis of over 25 publications that consider Utility-Scale Storage costs. The suite of publications demonstrates varied cost reduction for Battery Storage over time.

5 Figure ES-1 shows the low, mid, and high cost Projections developed in this work (on a normalized basis) relative to the published values. Figure ES-2 shows the overall capital cost for a 4-hour Battery system based on those Projections , with Storage costs of $124/kWh, $207/kWh, and $338/kWh in 2030 and $76/kWh, $156/kWh, and $258/kWh in 2050. Battery variable operations and maintenance costs, lifetimes, and efficiencies are also discussed, with recommended values selected based on the publications surveyed. Figure ES-1. Battery cost Projections for 4-hour lithium-ion systems, with values relative to 2018. The high, mid, and low cost Projections developed in this work are shown as the bolded lines. Figure ES-2. Battery cost Projections for 4-hour lithium ion systems.

6 Battery Cost Projections (relative to 2018)HighMidLowPublished Values0501001502002503003504002015202020 25203020352040204520504-hour Battery System Capital Cost (2018$/kWh)HighMidLowv This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at Table of Contents 1 Background .. 1 2 Methods .. 2 3 Results and Discussion .. 5 References .. 14 Appendix .. 16 List of Figures Figure 1. Battery cost Projections for 4-hour lithium-ion systems, with values relative to 2018.. 5 Figure 2. Battery cost Projections for 4-hour lithium ion systems in 2018$.. 6 Figure 3. Battery cost Projections developed in this work (bolded lines) relative to published cost Projections .. 7 Figure 4. Current Battery Storage costs from studies published in 2018 or 2019.

7 8 Figure 5. Cost Projections for power (left) and energy (right) components of lithium-ion systems.. 9 Figure 6. Cost reduction Projections (relative to 2018) used in this study versus published vehicle Battery cost Projections .. 9 Figure 7. Variable O&M (top right), fixed O&M (top left), lifetime (bottom right), and round-trip efficiency (bottom left) from various published sources.. 11 Figure 8. Regional capital cost multipliers for Battery systems.. 12 Figure 9. Comparison of cost Projections developed in this report (solid lines) against our previous Battery Storage cost projection from Cole et al. (2016) (dashed lines).. 17 List of Tables Table 1. List of publications used in this study to determine Battery cost and performance Projections .. 2 Table 2.

8 Values from Figure 1 and Figure 2, which show the normalized and absolute Storage costs over time.. 16 1 This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at 1 Background Battery Storage costs have changed rapidly over the past decade . This rapid cost decline has given batteries more attention in long-term planning of the power sector (Cole et al. 2017). In 2016, the National Renewable Energy Laboratory ( nrel ) published a set of cost Projections for Utility-Scale lithium-ion batteries (Cole et al. 2016). Those 2016 Projections relied heavily on electric vehicle Battery Projections because Utility-Scale Battery Projections were largely unavailable for durations longer than 30 minutes. Today there are many publications focused on Utility-Scale systems.

9 The newly available data coupled with continued rapid changes in Battery system costs has necessitated an update of the 2016 Projections . The Projections in this work focus on Utility-Scale lithium-ion Battery systems for use in capacity expansion models. nrel utilizes the Regional Energy Deployment System (ReEDS) (Eurek et al. 2016) and the Resource Planning Model (RPM) (Mai et al. 2013) for capacity expansion modeling, and the Battery cost Projections developed here are designed to be used in those models. Additionally, the Projections are intended to inform the cost Projections published in the Annual Technology Baseline ( nrel 2018). 2 This report is available at no cost from the National Renewable Energy Laboratory ( nrel ) at 2 Methods The cost and performance Projections developed in this work use a literature-based approach in which Projections are generally based on the low, median, and highest values from the literature.

10 A similar approach was implemented for several of the technologies in the nrel Annual Technology Baseline ( nrel 2018). Table 1 lists the more than 25 publications that are used in this work for developing Projections . Table 1. List of publications used in this study to determine Battery cost and performance Projections . Author or Organization Battery Type Furthest Projection Year Citation Avista Grid 2025 Avista (2017) BNEF Grid 2030 BNEF (2018) Brattle Grid 2030 Hledik et al. (2018) CAISO Grid 2030 Energy and Environmental Economics, Inc. (2017) DNV GL Grid 2021 DNV GL (2017) EIA (Annual Energy Outlook 2019) Grid 2050 EIA (2019) EIA (historical data) Grid NA EIA (2018) EPRI Grid 2030/2050 EPRI (2018b) HECO Grid 2045 HECO (2016) IRENA Grid 2026 IRENA (2017) Lazard Grid 2022 Lazard (2018) Navigant Grid 2026 Navigant (2017) NIPSCO Grid 2035 NIPSCO (NIPSCO 2018) NYSERDA Grid 2030 NYSERDA (2018) Platt River Power Authority Grid 2017 Aquino et al.