Before the World starts to panic this is an assessment that only looks at one element of the battery procurement decision. Environmental, Safety, Quality, Longevity and specific location and application factors can easily drive an alternative perspective.
Round Trip Efficiency Factors
As previously discussed, the cost of a system is impacted by Round Trip Efficiency and this shows up in either the need for more Renewable Energy Generating Capital (CAPEX) or more Operating Expense for the additional electricity that has to be purchased for the charging cycle. The charts reported in this Blog illustrate the situation in both cases for five very prominent battery chemistries. Based on the inherent chemistry and the general and specific BOP, previously reviewed, these are the Round Trip Efficiencies calculated & used in the analysis. This also includes an Inverter RTE of 95%.
Lead Acid = 76%; Nickel Batteries = 74%; Lithium Ion NMC = 82%;
Lithium Iron Phosphate = 88%; Vanadium Redox Flow = 69%.
For a reasonable Energy Storage System, 10 years of life and cycling once per day must be achieved, i.e.3,650 cycles. To achieve full 100% DOD cannot be assumed and this is factored into the base battery chemistry costs. The following DODs were applied:
Lead Acid = 50%; Nickel Batteries = 80%; Lithium Ion NMC = 80%; Lithium Iron Phosphate = 90%: Vanadium Redox Flow = 80%.
For any battery, the costs reported can have a very wide range. The following base costs were used for this analysis. They include cells and BMS. They do not include the actual System infrastructure. (Note: thicker lead acid plates are assumed)
Lead Acid = $120/kWh; Nickel Batteries = $200/kWh; Lithium Ion NMC = $250/kWh; Lithium Iron Phosphate = $350/kWh; Vanadium Redox Flow = $400/kWh
The Cost Equations
Actual cost per kWh = (Base Cost)/DOD + (CAPEX per kWh) x (100/RTE-1)
Actual Cost per kWh= (Base Cost/DOD + Electricity Tarif x (100/RTE-1)
Battery Costs adjusted for RTE
The following two charts summarize the adjusted RTE costs for both the CAPEX and OPEX options.
The CAPEX version looks at the installed solar cost. This is not just the PV panel cost but has to include land, mounting, installation, MPPT, Chargers/Inverters etc. This number continues to, "clatter down" but for many locations is still in the $3-$4 per Watt range. Do it yourself projects and those where the labor is cheap may be as low as $2/W and below.
The OPEX version is driven by Electric Utility Tarif costs and these vary not just globally but significantly within countries. The US has an average cost of $0.12 but can vary from $0.10 to $0.24 depending on location. Globally some countries are as low as a few cents and Denmark at $0.40/kWh is generally considered to be one of the highest.
The summary table at the introduction of this section captures the Seesaw effect that RTE has on the real cost of a battery energy storage system. Along with these charts It highlights the current truth that there is no single battery system that is right for every application and situation. As the future unfolds and costs change on all fronts, these dynamics will continue to change and it is difficult to predict where different parts of the World will be in a few years time. Just exchange rate changes will shift the relative country Tarif rankings.
Most importantly this analysis highlights a major principle. Costs must be low AND RTE must be high for a new battery technology to be successful in this market. Many existing battery chemistries, particularly the aqueous systems, are not set optimally and this is clearly, as previously discussed leaving money on the table. Several prescriptions for correction are presented in the RTE Doctor Q&A in the next section.
Post-note 1: It is important to realize that the costs presented only include cells and BMS. There are many other components required for a complete system but intentionally these are not included. They are very application, location, cooling, climate and preferred housing or packaging related and these are too many variables to be managed within a simple Blog.
Postdate 2: It is difficult to look at the data and not to conclude that Lithium Iron Phosphate, if it can be made to the right quality levels, should make it to the King of the Castle. Development work on higher Voltage Lithium Ion, increased Nickel and or Manganese Cathodes will make the Non Aqueous/Lithium race an interesting one. On the aqueous side, Lead Acid may be a spent force and the Nickel chemistries have a history of being a victim of the Cuckoo effect when Lithium Ion muscles in. Based on its Voltage profile, superior Energy Density and low entitlement cost if innovative High Power designs can be identified, Metal Air would be very worthy challenger. That is another story!