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Published on July 10th, 2012 | by Zachary Shahan

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Grid Storage Battery Cost to Fall to $500/kWh by 2022, Lux Research Projects

July 10th, 2012 by  


 
Market research firm Lux Research is projecting that lithium-ion and molten-salt battery costs will get down to around $500/kWh by 2022. The bad news, if Lux Research is right, is that $500/kWh is twice the targeted $250/kWh.

wind power energy storage

“Technology developers make bold claims about performance enhancements and economies of scale that will lead to dramatic cost reductions. Lux Research’s baseline scenarios for grid-tied systems indicate that by 2022 Li-ion batteries will reach $506/kWh; sodium nickel chloride, or ZEBRA, batteries will approach $473/kWh; and vanadium redox flow batteries (VRFBs) will hit $783/kWh.”

Note, however, that those are baseline scenarios.

“Molten-salt batteries hold the most potential to be the cheapest large-scale systems, with manufacturing improvements playing the largest role, accounting for 95% of the cost reduction,” said Brian Warshay, Lux Research Associate and the lead author of the report, Grid Storage Battery Cost Breakdown: Exploring Paths to Accelerate Adoption. 

“Li-ion batteries are dependent on cost reductions from mass production,” he added, “while molten-salt batteries and VRFBs rely on long discharge durations to reduce costs.”

Here are some more key points from Lux Research, and a quick summary of how it came to its conclusions:

To gain an understanding of the key cost components for each technology, Lux Research analysts built production cost models of Li-ion, ZEBRA, and VRFB systems for small- to large-scale grid storage systems, and assessed drivers that will facilitate cost reduction and constraints to innovative material and manufacturing approaches. Among their findings:

  • Cost of Li-Ion batteries will dip 45% by 2022. Li-ion batteries may lose market share to cheaper molten-salt batteries for large projects but will remain the system of choice for space-constrained projects because of their high energy density.
  • ZEBRAs need productivity gains. ZEBRA battery manufacturing accounts for between 50% and 60% of the total system costs, primarily because of the cost of processing its key raw materials. Improved manufacturing productivity and better capacity utilization will account for 95% of the expected reduction in costs by 2022 to $473/kWh.
  • Vertical integration is key to VRFB costs. Vertical integration and exclusive supply agreements will be key to managing the cost of vanadium pentoxide, a metal with a widely variable historical market price and uncertain future. Future cost estimates for vanadium pentoxide range from $15/kg to $30/kg, from the current $13.20/kg. At the upper end of the range, VRFB cost will actually increase to $1,205/kWh.

Let’s hope these projections are a bit off (on the high side).

Source: Lux Research
Photo Credit: A123 Systems
 
 
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About the Author

is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director and chief editor. He's also the CEO of Important Media. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he offers no investment advice and does not recommend investing in Tesla or any other company.



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