5 ms·
Batteries have cycle life of thousands of cycles so you can't really compare the costs of production and storage directly.
by beefield 8y ago
Batteries have cycle life of thousands of cycles so you can't really compare the costs of production and storage directly.
- jsight 8y agoI'm sure his numbers take that into account. The cost per MWh for batteries would be at least an order of mangnitude higher if he did not.
- acidburnNSA 8y agoYou are correct. Capital cost of battery systems is closer to $800/MWh Page 11: https://www.lazard.com/media/450774/lazards-levelized-cost-of-storage-version-40-vfinal.pdf https://www.lazard.com/media/450774/lazards-levelized-cost-o...
- jsight 8y agoI'm curious how they come up with that, actually. Aren't batteries at ~100/KWh at the moment? I would have expected a MWh to be closer to $100k. If I'm not mistaken, 1000 cycles at that rate would get you close to $100/MWh. Obviously I am misunderstanding something in these calculations.
- ben_w 8y agoI assume that one difference is that a facility for LiIon batteries costs more than just LiIon battery cells; and the land, the transformers, the site security, and general maintenance of all the above are non-trivial compared to cell costs?
- acidburnNSA 8y agoYup. Capital cost, operation and maintenance, and charging costs are all added up, financed over the operating period, and turned into a cost to meet an investment IRR of 12%. The table in page 11 of the pdf I linked above breaks it all down.
- zaroth 8y ago12% seems massively high for the risk level. This should be extremely low risk, right?
- lukeschlather 8y agoI think you're reading it as Annual Recurring Revenue rather than Internal Rate of Return. For IRR I think 12% is pretty normal, and depending on how good your project management is it could easily turn into 0%. But I'm not an accountant so I might be misunderstanding.
- xyzzyz 8y agoInvesting in a single facility with unproven technology, without other existing facilities with well known financials is a very risky investment.
- jsight 8y agoOh certainly, but that is kind of my point. The $/KWh seems way too low if that is installed cost. But the levelized cost of energy at the end actually seems pretty reasonable. That means I don't understand where the $/KWh of installed capacity comes from.
- beefield 8y agoSure. I don't know what I was thinking.