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The future cost of electrical energy storage based on experience rates

Abstract

Electrical energy storage could play a pivotal role in future low-carbon electricity systems, balancing inflexible or intermittent supply with demand. Cost projections are important for understanding this role, but data are scarce and uncertain. Here, we construct experience curves to project future prices for 11 electrical energy storage technologies. We find that, regardless of technology, capital costs are on a trajectory towards US$340 ± 60 kWh−1 for installed stationary systems and US$175 ± 25 kWh−1 for battery packs once 1 TWh of capacity is installed for each technology. Bottom-up assessment of material and production costs indicates this price range is not infeasible. Cumulative investments of US$175–510 billion would be needed for any technology to reach 1 TWh deployment, which could be achieved by 2027–2040 based on market growth projections. Finally, we explore how the derived rates of future cost reduction influence when storage becomes economically competitive in transport and residential applications. Thus, our experience-curve data set removes a barrier for further study by industry, policymakers and academics.

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Figure 1: Experience curves for EES technologies.
Figure 2: Future cost of EES technologies at 1 TWh cumulative capacity.
Figure 3: Future cost of EES technologies relative to time.
Figure 4: Impact of cumulative investment in EES deployment on future cost of EES.
Figure 5: Applicability of experience-curve-based cost projections to application-specific levelized cost analyses.

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Acknowledgements

We would like to thank all manufacturers and industry analysts that actively contributed to this study, in particular L. Goldie-Scot, H. N. Beushausen, N. Nielsen, S. Schnez and M. Tepper. O.S. would like to acknowledge support from the Imperial College Grantham Institute for his PhD research. I.S. was funded by the EPSRC under EP/M001369/1. A.H. was supported by NERC/Newton project NE/N018656/1. A.G. and O.S. would like to acknowledge funding from the EPSRC and ESRC Imperial College London Impact Acceleration Accounts EP/K503733/1 and ES/M500562/1.

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O.S. and I.S. conducted the main part of research design, data gathering and analysis. A.H. and A.G. contributed to research design and analysis. O.S. wrote the paper. I.S., A.H. and A.G. edited the paper.

Corresponding author

Correspondence to O. Schmidt.

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The authors declare no competing financial interests.

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Supplementary Notes 1–2, Supplementary Tables 1–7, Supplementary Figures 1–11 and Supplementary References. (PDF 1075 kb)

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Schmidt, O., Hawkes, A., Gambhir, A. et al. The future cost of electrical energy storage based on experience rates. Nat Energy 2, 17110 (2017). https://doi.org/10.1038/nenergy.2017.110

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