Levelized Cost of Storage for Lithium Batteries, Considering Degradation and Residual Value

Abstract

This article presents a Levelized Cost of Storage (LCOS) analysis for lithium batteries in different applications. A battery degradation model is incorporated into the analysis, which estimates the reduction in economic income due to the decrease in energy capacity. Another factor considered is the residual value attributed to the batteries, once they have completed their first stage of degradation and can be reused in second life applications. The Present Value of Throughput (PVT) metric is used to estimate the health factor of repurposed batteries and then calculate an attractive and reasonable selling price. All the analysis are made for the year 2020, and based on studies of the evolution of technology costs, the LCOS is projected for the year 2030. The results show that the most significant component of LCOS for all applications is investment, due to the high cost of this type of storage technology. Even for the year 2030, the LCOS is significantly reduced, capital expenditures continue to predominate, while the residual value represents an important role in the economic income at the end of the project life.