IEEE Power & Energy Magazine - November/December 2017 - 33

7,000
6,000

Flow
Battery
6%

Total Grid-Scale Battery Capacity

(MWh)

5,000

Other
5%

LeadAcid 12%

4,000
3,000

Na-Metal
14%

2,000

Li-Ion
63%

1,000
0
2008

2009

2010

2011

2012

2013

2014

2015

2016

(a)

(b)

figure 2. Global grid-scale battery energy storage deployments by (a) megawatt hour and (b) cell chemistry. (Source:
Office of Electricity Delivery and Energy Reliability, Sandia National Laboratories; and Strategen Consulting, DOE Global
Energy Storage Database, 2017.)

november/december 2017

power conditioning, and integration, as well as soft costs
associated with system installation. As a result, while there
have been major reductions in battery-pack costs, similar
reductions will be required with other components and the
balance of plant that constitute an energy storage system. It
should be noted that some associated costs are for mature
technologies (inverters, transformers, and associated infrastructure such as site development). At the end of 2016, the
dc subsystem (mostly including battery cells) accounted for
35-70% of the overall system cost, depending on the ratio of
power and energy needed for the application. This wide range
is based on the type of configuration, with high-power, lowenergy systems (used for frequency regulation) less costly
relative to low-power, high-energy systems (used for energy
shifting and firm capacity). Figure 3 provides a representative
range of capital cost requirements for different Li-ion battery
energy storage configurations.
So far, most cost reductions have come through improvements in battery cell technologies. Further cost reductions

10,000
8,000
6,000
4,000
2,000

h
M
2.
5

M
5

dc Subsystem
ac Subsystem

h
:1
W
M
10

:0
.5
M
W
20

Battery Storage Cost
(k$)

the initial investment and necessary cycles of learning to
progress through scale-up to high-volume manufacturing.
Over the last few years, deployment of battery-based
energy storage has begun to get traction in the marketplace.
Recent data from the DOE Global Energy Storage Database, shown in Figure 2, highlight the accelerating pace of
battery energy storage deployments. Total installed grid-scale
battery capacity has doubled over the last two years. During
that time, Li-ion battery chemistries have become the clear
preference in the industry, now accounting for 63% of the total
market share.
Electrochemical energy storage (via battery storage systems) offers the greatest flexibility in terms of energy and
power capacity (megawatt and megawatt hour ratings) across
the vast majority of application markets, from kilowatt-hourclass behind-the-meter applications to 50-100-MWh peaker
replacements to large projects in support of transmission and
distribution (T&D) infrastructure deferrals. The U.S. and
global market for energy storage technologies is set to expand
quickly, with most market studies pointing to rapidly increasing deployments across all market segments. According to
Bloomberg New Energy Finance, the worldwide grid storage market is expected to increase over tenfold by 2025, with
nearly 80% of that growth outside the United States. Further
reductions in cost and improved market systems that fairly
monetize the benefits of energy storage can help accelerate
this adoption.
Acceleration in the growth of grid storage systems using
Li-ion batteries can be directly attributed to the significant
reduction in the cost of Li-ion batteries. With the equally
significant increase of production capacity in Li-ion manufacturing, cell-level costs have dropped below US$200/kWh;
however, further reduction in cell-level costs may be more
difficult to achieve than these recent cost reductions.
The capital cost of the battery system is only part of the
overall cost equation. Along with the storage device, there
are costs associated with the battery management system,

Mechanical Systems
EPC Costs

figure 3. Projected cost line items for a 10-MWh Li-ion
energy storage system (US$/kWh). (Source: GE Energy
Consulting). EPC: energy performance certificate.
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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - November/December 2017