Most Cost-competitive Technologies For Energy Storage Visualized
Energy storage technologies have been rapidly evolving, driven by the growing demand for renewable energy integration and grid stability. Among the most cost-competitive technologies, lithium-ion batteries have emerged as a frontrunner. Their widespread use in electric vehicles has led to significant economies of scale, contributing to a reduction in costs. Moreover, advancements in battery chemistry, manufacturing processes, and materials have further enhanced the performance and cost-effectiveness of lithium-ion batteries.
Beyond lithium-ion, pumped hydro storage remains one of the most established and cost-effective forms of grid energy storage. This technology utilizes surplus electricity to pump water to a higher elevation and releases it to generate power during periods of high demand. Pumped hydro projects benefit from their long lifespan and high efficiency.
Innovative technologies such as flow batteries, which use liquid electrolytes stored in external tanks, are gaining attention for their potential cost-effectiveness and scalability. Vanadium redox flow batteries, in particular, have shown promise due to their ability to decouple power and energy capacity.
Furthermore, compressed air energy storage (CAES) is recognized for its ability to store large amounts of energy. During periods of excess energy generation, air is compressed and stored in underground caverns, and when electricity is needed, the compressed air is released to drive turbines and generate power.
The visualization below created by Reddit user IainStaffell shows which technology has the lowest whole-lifetime cost of storing electricity, across the full range of possible grid applications.
Colours on the chart symbolize the technologies with the lowest lifetime cost. Shading displays how substantial the cost advantage is over the second cheapest technology.
The axes display discharge duration and cycling frequency. They enfold the whole spectrum from second-by-second balancing applications (bottom right) up to inter-seasonal storage (top left), and everything in between.
Circled letters reveal grid services which can be monetized in various power markets.
Overall, the pursuit of cost-competitive energy storage is fostering continuous innovation and the integration of various technologies into a diversified energy storage portfolio, each with its advantages and suitability for different applications in the evolving landscape of renewable energy and grid resilience.
All data for creating this visualisation was taken from the book “Monetizing Energy Storage”. Forthcoming technology costs are based on projected reductions in investment costs over time. Lithium-ion becomes competitive over a broader range of applications in the future, as its costs are dropping faster than other technologies.