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Projecting the future lifetime cost of electricity storage technologies

Diverse electricity storage technologies with different cost and performance characteristics, and varying requirements of storage applications, pose a challenge to adequate cost assessments. But, cost optimal investment decisions do need to account for all costs incurred during a technology’s lifetime as well as all relevant performance parameters.


Application-specific lifetime cost, i.e. levelised cost of storage (LCOS) in US$/MWh or annuitised capacity cost (ACC) in US$/kW-year, meet these requirements for electricity storage technologies and compute the discounted cost of discharged electricity or provided power capacity respectively.

Levelised cost of storage (LCOS) - The cost of kWh or MWh electricity discharged from a storage device  when accounting for all cost incurred and energy produced throughout the lifetime of the device.

Annuitised capacity cost (ACC) - The cost of providing a kW or MW power capacity with a storage device for a certain period (e.g., week, year) when accounting for all cost incurred throughout the lifetime of the device.

This study determines lifetime cost for 9 electricity storage technologies in 12 power system applications from 2015 to 2050 based on projected investment cost reductions and current performance parameters. It finds that cost will reduce on average 36% and 53% by 2030 and 2050 respectively across the modelled applications, with lithium-ion systems likely to become most cost-efficient for nearly all applications from 2030.


Figure 1  Lowest LCOS probabilities for 9 electricity storage technologies in 12 applications from 2015 to 2050. Left-hand axis displays probability that a technology will exhibit lowest LCOS in a specific application. Right-hand axis displays mean LCOS in US$/MWh of technology with highest probability for lowest cost. Note there are different scales between panels. 


Figure 2 – Chart displays technologies with lowest LCOS in US$/MWh relative to discharge duration and annual cycle requirements. Circled numbers represent the requirements of the 12 applications introduced in Figure 1. Colours represent technologies. Shading indicates how much higher the LCOS of the second most cost-efficient technology is; meaning lighter areas are contested between at least two technologies, while darker areas indicate a strong cost advantage of the prevalent technology. White spaces mean LCOS of at least two technologies differ by less than 5%. The sawtooth pattern above 1,000 cycles reflects the marked lifetime reductions at more frequent discharges that affect competitiveness of individual technologies. The modelled power price is 50 US$/MWh. See these links for an animated version: all technologies, and excl. PHES and CAES.


Figure 3 – Chart displays LCOS of most cost-efficient technologies relative to discharge duration and annual cycle requirements for all modelled technologies from 2015 to 2040. Circled numbers represent the requirements of the 12 applications introduced in Figure 1. Colours represent LCOS range. The modelled electricity price is 50 US$/MWh.

This study also investigates the required performance improvements for competing technologies to become competitive with lithium-ion. Overall, these insights increase transparency around the future competitiveness of electricity storage technologies and can help guide research, policy and investment activities to ensure cost-efficient deployment.

Test your own technology cost and performance assumptions or application requirements: 

Schmidt, O., Melchior, S., Hawkes, A., & Staffell, I. (2019). Projecting the Future Levelized Cost of Electricity Storage Technologies. Joule, 3, 1–20. (Publication, Dataset)

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