The levelised cost of electricity (LCOE) that can be achieved today for battery energy storage means that “new-build batteries can be competitive on cost with gas peaker plants,” according to BloombergNEF.
Our sister site PV Tech reported yesterday that according to analysis BloombergNEF’s newly-published LCOE reports, solar’s levelised cost of electricity has fallen below US$30/MWh with the PV industry expected to break the US$20/MWh average in a decade.
New-build utility-scale solar and onshore wind are the cheapest options in much of the world, putting existing coal and gas power plants at risk, with BloombergNEF assessing 25 different technologies and 7,000 projects in 47 countries.
The LCOE of battery storage systems meanwhile has halved in just two years, to a benchmark of US$150 per MWh for four-hour duration projects. In an interview, BloombergNEF analyst Tifenn Brandily, the report’s lead author, told Energy-Storage.news that below two-hours duration, batteries are already cheaper for peak shaving than open cycle gas turbines (OCGT), traditionally the go-to technology for that purpose.
“If you need to shave a peak in the load, it’s going to cost less to install a battery than OCGT or gas reciprocating power plants, peaking plants,” Brandily said.