> In March, an analysis of more than 7000 global storage projects by Bloomberg New Energy Finance reported that the cost of utility-scale lithium-ion batteries had fallen by 76% since 2012, and by 35% in just the past 18 months, to $187 per MWh.
I hate it when they list battery prices this way, it's very misleading. That's the amortized cost of $187 per MWh cycle, not the battery's upfront cost. Assuming 2000 cycles that's $374,000 per MWh of storage.
They are comparing it with building a new power plant costs for which are calculated similarly for 20-30 year life cycle. Same is for Solar and wind power plants. Many people assume that prices of grid scale solar and wind power are coming down because of technology improvements that is partly true but another reason for the price decreases is that the investors are finding out the calculated life of these is actually 50-100% more than their previous assumptions.
The other thing that is happening is that solar wind and battery are naturally working forward through cost-reduction manufacturing S-curve, while fossil fuel plant tech has already hit the mature-flat portion of that curve. Renewables are basically at the point where there are easy & dramatic improvements in cost reduction by "just" volume scale up and financing, while fossil fuel plants have long explored those options and have more or less hit costs that are much more difficult to improve.
I hate it when they list battery prices this way, it's very misleading.
Misleading to some, flat-out useless to others. The replacement cost of the 24KWh battery in our Nissan Leaf is about $5K. So I'll take two of those $187 MWh batteries, please.
Oh, of course they're not speaking the same language as I am with that kind of price difference. But then I guess I don't know what in the hell they're talking about if not XWh of energy storage.
Person A: I'd like you to store one megawatt-hour of electricity that I will give you, and then later, I want you to give that electricity back to me.
Person B: Certainly. That will be $187.
It's not the cost of the battery. It's the cost of storing and releasing one megawatt-hour of electricity once. This has to pay for the capital cost over time, as well as overhead and depreciation.
Yeah those are different things. Levelized Cost of Energy (LCoE) tells you if your prices are competitive (i.e. if anyone will buy from you). Capital costs tells you if you can afford to build the plant in the first place. You probably can't get investors to cover the capital costs if you can't convince them that you can make a decent profit on a low LCoE, so of the two, LCoE is actually more important in determining whether a plant will be built and if people will use it.
Edit: I don't know what the equivalent of LCoE is for a power-storage facility, but hopefully you get the idea.
Does it at least use a TVM calculation? If so it's indeed quite misleading, considering that at max 1 cycle per day (e.g. solar) that's 6 years to spread the cost across.
If the battery storage is directly connected to the DC side of a solar farm, that's one charging opportunity per day. If it's just hooked into the grid, two charging opportunities per day would be more typical in California. Wind power output tends to be highest at night after the daily demand peak is already past.
Look at yesterday (11 July 2019) on the renewables trend graph, for example.
Wind reaches its daily minimum around noon, while solar is peaking. Wind's maximum output is at 10:00 PM, long after the sun has set and after the demand peak has passed.
I hate it when they list battery prices this way, it's very misleading. That's the amortized cost of $187 per MWh cycle, not the battery's upfront cost. Assuming 2000 cycles that's $374,000 per MWh of storage.