CONFIDENTIAL
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
NOVEMBER 2015
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Introduction
Lazard’s Levelized Cost of Storage Analysis (“LCOS”) addresses the following topics:
 Definition of a cost-oriented approach to energy storage technologies and applications
 Description of selected energy storage technologies
 Description of ten defined use cases for energy storage
 Comparative levelized cost of storage for a number of use case and technology combinations
 Decomposition of the levelized cost of storage for various use case and technology combinations by total capital cost,
operations and maintenance expense, charging cost and tax, as applicable
 Comparison and analysis of capital costs for various use case and technology combinations, including in respect of
projected/expected capital cost declines
 Summary assumptions for the various use case and technology combinations examined
Energy storage systems are be rated in terms of both instantaneous power capacity and potential energy output (or “usable energy”). The instantaneous
power capacity of an energy storage system is defined as the maximum output of the invertor (in MW, kW, etc.) under specific operational and physical
conditions. The potential energy output of an energy storage system is defined as the maximum amount of energy (in MWh, kWh, etc.) the system can
store at one point in time. Both capital cost divided by instantaneous power capacity and capital cost divided by potential energy output are common
Industry conventions for cost quoting. This study describes capital costs in terms of potential energy output to capture the duration of the relevant
energy storage system, as well as its capacity.
Throughout this study, use cases require fixed potential energy output values. Due to physical and operating conditions, some energy storage systems
may need to be “oversized” on a usable energy basis to achieve these values. This oversizing results in depth of discharge over a single cycle that is less
than 100% (i.e., some technologies must maintain a constant charge).
Other factors not covered in this report would also have a potentially significant effect on the results presented herein, but have not been examined in the
scope of this current analysis. The analysis also does not address potential social and environmental externalities, including, for example, the long-term
residual and societal consequences of various conventional generation technologies (for which energy storage is a partial substitute) that are difficult to
measure (e.g., nuclear waste disposal, environmental impacts, etc.).
While energy storage is a beneficiary of and sensitive to various tax subsidies, this report presents the LCOS on an unsubsidized basis to isolate and
compare the technological and operational components of energy storage systems and use cases, as well as to present results that are applicable to a
global energy storage market.
The inputs contained in the LCOS were developed by Lazard in consultation and partnership with Enovation Partners, a leading consultant to the Power
& Energy Industry.
1
Note: This study has been prepared by Lazard for general informational purposes only, and it is not intended to be, and should not be construed as, financial or other advice.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
What is Lazard’s Levelized Cost of Storage Analysis?
Lazard’s Levelized Cost of Storage study analyzes the levelized costs associated with the leading energy storage technologies
given a single assumed capital structure and cost of capital, and appropriate operational and cost assumptions derived from a
robust survey of Industry participants
 The LCOS does not purport to measure the value associated with energy storage to Industry participants, as such value is
necessarily situation-, market- and owner-dependent and belies this cost-oriented and “levelized” analysis
WHAT THE LCOS DOES
WHAT THE LCOS DOES NOT DO
 Defines operational parameters associated with systems
designed for each of the most prevalent use cases of storage
 Identify the full range of use cases for energy storage,
including “stacked” use cases (i.e., those in which multiple
value streams are obtainable from a single storage installation)
 Aggregates cost and operational survey data from original
equipment manufacturers and energy storage developers,
after validation from additional Industry participants/energy
storage users
 Identifies an illustrative “base case” conventional alternative
to each use case for energy storage, while acknowledging that
in some use cases there is no conventional alternative (or such
comparison may be only partially apt)
 Generates estimates of the installed cost over the indicated
project life required to achieve certain levelized returns for
various technologies, designed for a series of identified use
cases
 Provides an “apples-to-apples” basis of comparison among
various technologies within use cases
 Identifies a potential framework for evaluating energy storage
against certain “base case” conventional alternatives within
use cases
 Aggregates robust survey data to define range of
future/expected capital cost decreases by technology
 Authoritatively establish or predict market clearing prices for
energy storage projects/products
 Propose that energy storage technologies be compared solely
against a single conventional alternative
 Analyze the “value” of storage in any particular market
context or to specific individuals/entities
 Purport to provide an “apples-to-apples” comparison to
conventional or renewable electric generation
 Establish an authoritative framework for resource planning or
decision-making
2
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
The Energy Storage Value Proposition—A Cost Approach
Understanding the economics of energy storage is challenging due to the highly tailored nature of potential value streams
associated with an energy storage installation. Rather than focusing on the value available to energy storage installations, this
study analyzes the levelized cost of energy storage technologies operationalized across a variety of use cases; the levelized cost
of storage may then be compared to the more specific value streams available to particular installations
ENERGY STORAGE VALUE PROPOSITION
SELECTED OBSERVATIONS
 While an energy storage system may be optimized for a
System Cost &
Revenue
particular use case requiring specified operating parameters
(e.g., power rating, duration, etc.), other sources of revenue
may also be available for a given system
Value
Positive
 For example, a single energy storage system could
theoretically be designed to capture value through both
providing frequency regulation for a wholesale market
and enabling deferral of an investment in a substation
upgrade
 Energy storage systems are sized and developed to solve for
one or more($113.70)
specific revenue streams, as the operating
requirements of one use case may preclude
efficient/economic operations in another use case for the
same system (e.g., frequency regulation vs. PV integration)
Value
Negative
 The total of all potential value streams available for a given
system thus defines the maximum, economically viable cost
for that system
LCOS
Value
Stream
1
3
Value
Stream
2
(a)
Copyright 2015 Lazard.
Value
Stream
3
Value
Stream
4
Total Value(a)
 Importantly, incremental sources of revenue may only
become available as costs (or elements of levelized cost)
decrease below a certain value
Presented here as the simple sum of all available value streams. Due to operational and other factors, such “stacked” value would likely differ from the simple sum of all value
streams in practice.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Overview of Selected Energy Storage Technologies
There are a wide variety of energy storage technologies currently available and in development; some technologies are better
suited to particular use cases or other operational requirements (e.g., geological considerations for compressed air, heat
considerations for lithium-ion and sodium, etc.) than competing technologies
COMPRESSED AIR
DESCRIPTION
 Compressed Air Energy Storage (“CAES”) uses electricity to compress air into confined spaces (e.g., underground mines, salt caverns,
etc.) where the pressurized air is stored
EXPECTED
USEFUL LIFE(a)
15 – 20 years
 When required, this pressurized air is released to drive the compressor of a natural gas turbine
 Flow batteries contain two electrolyte solutions in two separate tanks, circulated through two independent loops; when connected to a
FLOW BATTERY‡
load, the migration of electrons from the negative to positive electrolyte solution creates a current
 The sub-categories of flow batteries are defined by the chemical composition of the electrolyte solution; the most prevalent of such
15 – 20 years
solutions are vanadium redox and zinc-bromine
 Flywheels are mechanical devices that spin at high speeds, storing electricity as rotational energy, which is released by decelerating the
FLYWHEEL
flywheel’s rotor, releasing quick bursts of energy (i.e., high power and short duration)
 Flywheels typically have a low energy density and high power ratings—they release large amounts of power over a short period (i.e.,
20+ years
minutes); typically, maintenance is minimal and lifespans are greater than most battery technologies
 Lead-acid batteries were invented in the 19th century and are the oldest and most common batteries; they are low-cost and adaptable to
LEAD-ACID‡
numerous uses (e.g., electric vehicles, off-grid power systems, uninterruptible power supplies, etc.)
 “Advanced” lead-acid battery technology combines standard lead-acid battery technology with ultra-capacitors; these technologies
5 – 15 years
increase efficiency and lifetimes and improve partial state-of-charge operability(b)
 Lithium-ion batteries are relatively established and have historically been used in the electronics and advanced transportation industries
LITHIUM-ION‡
 Lithium-ion batteries are increasingly replacing lead-acid batteries in many applications; they have relatively high energy density, low
5 – 15 years
self-discharge and high charging efficiency
PUMPED HYDRO
SODIUM‡
 Pumped hydro storage makes use of two vertically separated water reservoirs, using low cost electricity to pump water from the lower
to the higher reservoir and running as a conventional hydro power plant during high electricity cost periods
 Sodium batteries are classified as “high temperature” and “liquid-electrolyte-flow” batteries, which have high power and energy density
relative to alternatives (e.g., lead-acid); they are maintained at a temperature of 300° – 350°C
20+ years
5 – 15 years
 Zinc batteries cover a wide range of possible technology variations, including metal-air derivatives
ZINC‡
 Zinc battery systems are non-toxic, non-combustible and potentially low-cost due to the abundance of the primary metal; however,
5 – 15 years
this technology remains unproven in widespread commercial deployment
Source:
‡
4
Copyright 2015 Lazard.
(a)
(b)
Lazard estimates.
Denotes battery technology.
Indicates general ranges of useful economic life for a given family of technology. Useful life will vary in practice depending on sub-technology, intensity of use/cycling, engineering factors, etc.
Advanced lead-acid is an emerging technology with wider potential applications and greater cost than traditional lead-acid batteries.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Overview of Selected Energy Storage Technologies (cont’d)
There are a wide variety of energy storage technologies currently available and in development; some technologies are better
suited to particular use cases or other operational requirements (e.g., geological considerations for compressed air, heat
considerations for lithium-ion and sodium, etc.) than competing technologies
SELECTED COMPARATIVE ADVANTAGES
 Requires suitable geology
 Low cost, flexible sizing, relatively large-scale
 Relatively difficult to modularize for smaller installations
COMPRESSED
 Mature technology and well-developed design
AIR
 Low energy density
 Leverages existing gas turbine technologies
FLOW
BATTERY‡
FLYWHEEL
LEAD-ACID‡
LITHIUMION‡
 Reduced efficiency due to rapid charge/discharge
 High power density, scalability and depth of discharge capability
 Relatively low energy capacity
 Compact design with integrated AC motor
 High heat generation
 Mature technology with established recycling infrastructure
 Poor ability to operate in a partially charged state
 Advanced lead-acid technologies leverage existing technologies
 Relatively poor depth of discharge and short lifespan
 Multiple chemistries available (partly as a result of robust deployment
in electric vehicles)
 Remains relatively high cost
 High power capacity solution
ZINC‡
5
 Relatively high balance of system costs
 No degradation in “energy storage capacity”
 Mature technology (commercially available; leverages existing
hydropower technology)
SODIUM‡
 Exposure to natural gas price changes
 Power and energy profiles highly and independently scalable
 Efficient power and energy density
PUMPED
HYDRO
SELECTED COMPARATIVE DISADVANTAGES
 Requires advanced manufacturing capabilities to achieve high performance
 Relatively low energy density
 Limited available sites (i.e., water availability required)
 Relatively mature technology (commercially available)
 Although mature, inherently higher costs
 High energy capacity; long duration
 Operates at high temperature, resulting in potential flammability issues
 Currently quoted as low cost
 Currently unproven commercially
Source:
‡
DOE Energy Storage Database; Lazard estimates.
Denotes battery technology.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Selected Energy Storage Use Cases—In Front of the Meter
Unlike technologies related to conventional generation, which have a single use case (i.e., the creation of electricity), energy storage
technologies have a variety of use cases in a modern electric system, comprising both “in front of the meter” (or power grid-oriented) and
“behind the meter” (or distributed) applications; each use case identified below solves for a particular grid or user “need,” which is often
most easily achieved with a subset of available energy storage technologies
 Importantly, in practice, a single energy storage system may provide services across multiple use cases, although the feasibility of
multiple application energy storage units may be limited by operational and design factors (e.g., sizing for a particular use case could
preclude participation in another)
SELECTE D RELEVA NT
TECHNOLOG IE S
DESCRIP TIO N
TRANSMISSION
SYSTEM
 Large-scale energy storage system to improve  Lead-Acid, Sodium, Flow
transmission grid performance and assist in the
Battery, Lithium-Ion, Zinc,
integration of large-scale renewable generation
Pumped Hydro, CAES
 Transmission line upgrade
 Gas turbine
PEAKER
REPLACEMENT
 Large-scale energy storage system designed to
replace peaking gas turbine facilities
 Gas turbine
 Diesel reciprocating engine
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
PV INTEGRATION
6
SELECTE D
CONVENTIO N A L
ALTERN A T I VE S ( a )
(a)
 Lead-Acid, Sodium, Zinc,
Lithium-Ion, Flow Battery
 Energy storage system designed to balance
 Flywheel, Lithium
power to maintain frequency within a specified
tolerance bound (i.e., ancillary service)
 Gas turbine
 Energy storage system placed at substations to
provide flexible peaking capacity and mitigate
stability problems
 Distribution system upgrade
 Gas turbine
 Lead-Acid, Sodium, Zinc,
Lithium-Ion, Flow Battery
 Energy storage system designed to reduce
 Lead-Acid, Sodium, Zinc,
potential integration challenges or improve the
Lithium-Ion, Flow Battery
value of solar generation
 Gas turbine
 Diesel reciprocating engine
 Alteration of solar
production profile
Denotes an illustrative set of “base case” conventional alternatives for a given use case. Actual projects may displace a number of conventional alternatives, in certain scenarios.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Selected Energy Storage Use Cases—Behind the Meter
Unlike technologies related to conventional generation, which have a single use case (i.e., the creation of electricity), energy storage
technologies have a variety of use cases in a modern electric system, comprising both “in front of the meter” (or power grid-oriented) and
“behind the meter” (or distributed) applications; each of the use cases identified below solves for a particular grid or user “need,” which is
often most easily achieved with a subset of available energy storage technologies
 Importantly, in practice, a single energy storage system may provide services across multiple use cases, although the feasibility of
multiple application energy storage units may be limited by operational and design factors (e.g., sizing for a particular use case could
preclude participation in another)
DESCRIP TIO N
 Energy storage system used to enhance the stability and  Lead-Acid, Sodium, Zinc,
efficiency of a microgrid electricity system with specific
Lithium-Ion, Flow Battery
local goals, such as reliability, diversification of energy
sources and/or cost reduction, especially in the context
of ramp control/mitigation (i.e., relatively short
discharge profile)
 Diesel reciprocating engine
 Gas turbine
 Load profile alteration
 Energy storage system used to support the stability and
efficiency of an isolated electricity system with specific
local goals, such as reliability, diversification of energy
sources and/or cost reduction, especially in the context
of renewables integration (i.e., long discharge profile)
 Lead-Acid, Sodium, Zinc,
Lithium-Ion, Flow Battery
 Diesel reciprocating engine
 Gas turbine
 Load profile alteration
COMMERCIAL &
INDUSTRIAL
 Energy storage system primarily designed to provide
peak shaving and demand charge reduction for
commercial or industrial applications
 Lead-Acid, Sodium, Zinc,
Lithium-Ion, Flow Battery




COMMERCIAL
APPLIANCE
 Energy storage system designed to provide demand
charge reductions on a smaller scale and at a lower
duration than commercial and industrial use cases
 Lead-Acid, Zinc, LithiumIon, Flow Battery
 Diesel reciprocating engine
 Utility service upgrade
 Load profile alteration
RESIDENTIAL
 Energy storage system for residential home use
designed to provide backup power and self-generation
augmentation
 Lead-Acid, Lithium-Ion,
Flow Battery
 Load profile alteration
 Backup generator
MICROGRID
ISLAND GRID
7
SELECTE D
CONVENTIO N A L
ALTERN A T I VE S ( a )
SELECTE D RELEVA NT
TECHNOLOG IE S
(a)
Diesel reciprocating engine
Gas turbine
Utility service upgrade
Load profile alteration
Denotes an illustrative set of “base case” conventional alternatives for a given use case. Actual projects may displace a number of conventional alternatives, in certain scenarios.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Energy Storage Use Cases—Operational Parameters
For comparison purposes, this study assumes and quantitatively operationalizes ten use cases for energy storage; while there
may be alternative or combined/“stacked” use cases available to energy storage systems, the ten use cases below represent
prevalent current and contemplated energy storage applications and are derived from Industry survey data
PROJECT
LIFE (YEARS)
MW(a)
MWh OF
CAPACITY(b)
100% DOD
CYCLES/
DAY(c)
DAYS /
YEAR(d)
ANNUAL
MWh
PROJECT
MWh
TRANSMISSION SYSTEM
20
100
800
1
300
240,000
4,800,000
PEAKER
REPLACEMENT
20
25
100
1
350
35,000
700,000
FREQUENCY
REGULATION
20
10
5
4.8
350
8,400
168,000
DISTRIBUTION
SERVICES
20
4
16
1
300
4,800
96,000
PV
INTEGRATION
20
2
4
1.25
350
1,750
35,000
MICROGRID
20
2
2
2
350
1,400
28,000
ISLAND
GRID
20
1
6
1
350
2,100
42,000
COMMERCIAL &
INDUSTRIAL
10
1
4
1
350
1,400
14,000
COMMERCIAL
APPLIANCE
10
0.1
0.2
1
250
50
500
RESIDENTIAL
10
0.005
0.01
1
300
3
30
= “Usable Energy”(e)
(a)
(b)
(c)
8
Copyright 2015 Lazard.
(d)
(e)
Indicates power rating of system (i.e., system size).
Indicates total battery energy content on a single, 100% charge, or “usable energy.” Usable energy divided by power rating (in MW) reflects hourly duration of system.
“DOD” denotes depth of battery discharge (i.e., the percent of the battery’s energy content that is discharged). Depth of discharge of 100% indicates that a fully charged battery discharges all of its
energy. For example, a battery that cycles 48 times per day with a 10% depth of discharge would be rated at 4.8 100% DOD Cycles per Day.
Indicates number of days of system operation per calendar year.
Usable energy indicates energy stored and able to be dispatched from system.
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LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Unsubsidized Levelized Cost of Storage Comparison
Certain “in front of the meter” technology and use case combinations are cost-competitive with their dominant or “base case”
conventional alternatives under some scenarios, even without the benefit of subsidies or additional, non-optimized streams of
revenue; such observation does not take into account potential social or environmental externalities associated with energy
storage (e.g., environmental benefits associated with avoided gas peaker investment, etc.)
Compressed Air
TRANSMISSION
SYSTEM
$192
Flow Battery
‡
Lead-Acid
‡
Lithium-Ion
‡
Pumped Hydro
‡
$290
$892
$461
$347
$188
$396
‡
$230
Flow Battery ‡
PEAKER
REPLACEMENT
Lead-Acid
$927
$419
$221
$347
‡
$211
‡
Lithium-Ion
Sodium
‡
Zinc
‡
Lithium-Ion
Sodium
Zinc
$275
‡
(a)
Copyright 2015 Lazard.
$1,692
$400
$789
$426
$285
$1,129
$426
$373
‡
$950
$402
‡
$1,068
$355
‡
$686
$379
‡
$245
$957
$345
$200
$165 – $218 – Gas
9
$923
$516
$0
Source:
Note:
$989
$288
Flow Battery ‡
PV INTEGRATION
$948
$276
‡
Lead-Acid
$658
$365
Flywheel
Lead-Acid
$1,247
$321
Sodium ‡
Flow Battery ‡
DISTRIBUTION
SERVICES
$376
‡
Lithium-Ion ‡
Lithium-Ion
$1,079
$248
Zinc ‡
FREQUENCY
REGULATION
$739
$274
Sodium ‡
Zinc
$1,429
$400
Peaker(a)
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Levelized Cost ($/MWh)
Lazard estimates.
Here and throughout this presentation, unless otherwise indicated, analysis assumes 20% debt at 8% interest rate and 80% equity at 12% cost for all technologies and use cases. Assumes seven year
MACRS depreciation unless otherwise noted. Analysis does not reflect impact of evolving regulations/rules promulgated pursuant to the EPA’s Clean Power Plan.
Indicates battery technology.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives). The lowest cost
conventional alternative for a particular use case may not be the lowest cost conventional alternative for another use case.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Unsubsidized Levelized Cost of Storage Comparison (cont’d)
While no “behind the meter” technology and use case combination is strictly “in the money” from a cost perspective as compared to an
illustrative conventional alternative, a number of combinations are within “striking distance” and, when paired with certain streams of
value, may currently be economic for certain system owners in some scenarios; such observation does not take into account the social and
environmental externalities associated with energy storage (e.g., the social costs of demand charge shaving, etc.)
MICROGRID
Flow Battery
‡
$429
Lead-Acid
‡
$433
Lithium-Ion ‡
Sodium
$1,046
$946
$369
‡
$562
$411
Zinc ‡
$835
$319
$416
Flow Battery ‡
Lead-Acid
ISLAND
Lithium-Ion
Sodium
Zinc
Flow
$1,533
$581
‡
$870
$663
‡
$1,259
$523
$677
$349
$1,083
‡
$529
Lithium-Ion ‡
Sodium
$1,231
$700
‡
Battery ‡
Lead-Acid
COMMERCIAL &
INDUSTRIAL
$593
‡
$1,511
$351
‡
$838
$444
Zinc ‡
$310
$1,092
$452
Flow Battery ‡
COMMERCIAL
APPLIANCE
Lead-Acid
‡
Lithium-Ion
‡
Zinc
‡
$974
$928
RESIDENTIAL
Lead-Acid
Lithium-Ion
‡
Copyright 2015 Lazard.
$833
$721
$1,657
$1,101
$2,238
$1,034
$200
$400
$212 – $281 Diesel
Reciprocating Engine(a)
10
$1,363
$661
$0
Source:
‡
(a)
$2,291
$784
Flow Battery ‡
‡
$1,504
$600
$800
$1,000
$1,596
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Levelized Cost ($/MWh)
Lazard estimates.
Indicates battery technology.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives). The lowest cost conventional
alternative for a particular use case may not be the lowest cost conventional alternative for another use case.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage Components—Low End
While each use case requires different operating parameters and each technology optimizes into these parameters differently according to
its relative strengths and challenges, a key factor regarding the long-term competitiveness of energy storage across all use case and
technology combinations is the ability of technological development and increased production volumes to materially lower the capital
costs of certain energy storage technologies, and their levelized cost of energy, over time
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
$79
$15
‡
$88
$166
$13
‡
$98
PEAKER
REPLACEMENT
Flow Battery
Sodium
Zinc
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
‡
$132
$11
$14
$106
$70
$13
$38
$75
$31
$92
$23
$166
$58
$20
$75
$23
$50
$253
‡
$229
‡
$134
$0
$39
$18
$74
Capital
$200
$48
$516
$400
$37
$426
$285
$77
$32
$70
$38
$80
$43
$227
‡
$65
$45
$217
‡
$365
$288
$36
$264
‡
$419
$14 $211
$340
Flow Battery‡
Zinc
$66
$321
$20 $276
$261
‡
Sodium
$29
$17 $221
$15
Lithium-Ion ‡
Lithium-Ion
$61
$89
$79
$158
$396
$19 $248
$45
$19
Lead-Acid
Lead-Acid
$86
$36
$149
$35
$18 $230
$221
Battery‡
‡
Zinc
$70
$27
$120
$461
$347
$75
$270
‡
$43
$13 $188
$204
‡
$66
$32
$41
$14
‡
Lithium-Ion ‡
Sodium
PV INTEGRATION
$68
$127
Flywheel
Flow
$290
$61
$245
Lead-Acid
Lithium-Ion
$29
$9
Sodium‡
‡
$24
$50
$225
Pumped Hydro
Zinc
$86
$302
‡
‡
$10 $192
$29
$69
$64
$33
$79
$373
$36
$402
$355
$32
$379
$19 $245
O&M
Charging/ Discharging
$400
Taxes
$600
Levelized Cost ($/MWh)
11
Copyright 2015 Lazard.
Source:
‡
Lazard estimates.
Indicates battery technology.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage Components—Low End (cont’d)
While each use case requires different operating parameters and each technology optimizes into these parameters differently according to
its relative strengths and challenges, a key factor regarding the long-term competitiveness of energy storage across all use case and
technology combinations is the ability of technological development and increased production volumes to materially lower the capital
costs of certain energy storage technologies, and their levelized cost of energy, over time
 A notable exception to the general theme of high capital cost components of levelized cost is the island use case, where high absolute
costs of local electricity (e.g., fuel oil, diesel, renewables, etc.) result in materially greater charging costs as a percentage of LCOS
Flow Battery‡
Lead-Acid
MICROGRID
Lithium-Ion
Sodium
Zinc
‡
‡
‡
‡
Flow Battery‡
‡
Lead-Acid
ISLAND
Lithium-Ion
Sodium
Zinc
Flow Battery
COMMERCIAL
INDUSTRIAL
Lead-Acid
‡
Zinc
COMMERCIAL
APPLIANCE
Lead-Acid
Lithium-Ion
Zinc
Lead-Acid
Lithium-Ion
$185
$139
$27
$125
$18
$127
$11
$159
$27 $369
$27 $411
$17 $319
$19 $593
$437
$47
$213
$29
$215
$36
$182
$333
$31 $581
$381
$121
$34 $349
$341
$210
$47
$17
$264
$93
$98
$92
$50
$105
$39 $444
$26 $310
$613
‡
$87
$601
‡
$64
$390
$50
$358
$150
$104
Copyright 2015 Lazard.
$86
$75
$721
$164
$132
$400
$600
O&M
$928
$784
$146
$637
$200
$99
$974
$661
$672
‡
Lazard estimates.
Indicates battery technology.
$70
$115
$140
$130
$184
Capital
Source:
‡
$159
$88
$504
‡
$0
12
$529
$31 $351
$36
$17
$30 $663
$19 $523
$356
$12
$40 $700
$308
$16
$169
$30 $433
$172
$280
$132
$22 $429
$149
‡
Flow Battery‡
‡
RESIDENTIAL
$23
‡
Sodium‡
‡
$189
$37
$181
‡
‡
$40
$216
‡
Lithium-Ion‡
Flow Battery
$178
$152
$800
Charging
$118
$113
$1,000
$1,101
$1,034
$1,200
Taxes
Levelized Cost ($/MWh)
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage Components—High End
While each use case requires different operating parameters and each technology optimizes into these parameters differently according to
its relative strengths and challenges, a key factor regarding the long-term competitiveness of energy storage across all use case and
technology combinations is the ability of technological development and increased production volumes to materially lower the capital
costs of certain energy storage technologies, and their levelized cost of energy, over time
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
‡
‡
$79 $15$88 $10 $192
$576
‡
Sodium
‡
Zinc
‡
Flow Battery
‡
Lead-Acid
‡
Lithium-Ion
‡
Sodium
‡
$545
DISTRIBUTION
SERVICES
$220
$125
$137
$479
$44 $62 $73
Sodium
‡
$91
$97
$927
$66
$127
$108
$74
$90
$595
$93
$948
$86
$98
$989
$136
$97
$96
$923
$1,181
$580
$283
$55 $66 $87
$132
$655
‡
$109
$731
$497
$194
$0
$85
$160
$49 $66 $75
$674
‡
$159
$1,692
$79
$112
$1,129
$53 $84 $36 $426
‡
‡
$69
$789
$806
$253
‡
$1,247
$28 $79$20 $275
Sodium
Zinc
$1,079
$41 $78 $28 $347
‡
Lithium-Ion
Lithium-Ion
$1,429
$658
$673
$200
$149
$108
$189
$716
‡
$74
$865
Lead-Acid ‡
Lead-Acid
$147
$46 $79 $31 $376
$602
Zinc ‡
PV INTEGRATION
$66
$739
$773
Lithium-Ion ‡
Flow Battery
$892
$219
$50 $62 $82
Flywheel
Flow Battery
$93
$145 $42 $68$19 $274
Zinc ‡
FREQUENCY
REGULATION
$91
$997
‡
Pumped Hydro
PEAKER
REPLACEMENT
$132
$102
$69
$950
$108
$1,068
$686
$110
$78
$94
$957
$40 $83 $28 $345
$200
$400
$600
Capital
$800
O&M
$1,000
$1,200
Charging/ Discharging
$1,400
$1,600
$1,800
Taxes
Levelized Cost ($/MWh)
13
Copyright 2015 Lazard.
Source:
‡
Lazard estimates.
Indicates battery technology.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage Components—High End (cont’d)
While each use case requires different operating parameters and each technology optimizes into these parameters differently according to
its relative strengths and challenges, a key factor regarding the long-term competitiveness of energy storage across all use case and
technology combinations is the ability of technological development and increased production volumes to materially lower the capital
costs of certain energy storage technologies, and their levelized cost of energy, over time
 A notable exception to the general theme of high capital cost components of levelized cost is the island use case, where high absolute
costs of local electricity (e.g., fuel oil, diesel, renewables) result in materially greater charging costs as a percentage of LCOS
Flow Battery ‡
Lead-Acid
MICROGRID
$606
‡
$595
Lithium-Ion ‡
$336
Sodium ‡
Zinc
ISLAND
Lithium-Ion
‡
Sodium
‡
Zinc
‡
Flow
COMMERCIAL
INDUSTRIAL
Lead-Acid
Lithium-Ion
‡
Sodium
Zinc
$65
$624
$450
Lithium-Ion
‡
Zinc
‡
$45
RESIDENTIAL
Lead-Acid
Lithium-Ion
‡
$206
$80 $835
$406
$313
$44
$397
Copyright 2015 Lazard.
$94
$129
$1,533
$1,259
$30 $677
$100 $112
$128
$1,083
$1,082
$618
$184
$45 $87 $88
$772
$261
$1,231
$335
$377
$92
$153
$1,511
$838
$106 $103 $110
$1,092
$43 $110$39 $452
$1,010
$141
$170
$183
$1,504
$1,632
$278
$991
$497
$87 $132
$83
$168
$152
$1,111
$146
$225
$175
$600
Lazard estimates.
Indicates battery technology.
$2,291
$1,657
$305
$1,107
$400
$240
$1,363
$1,532
$200
$140
$85 $833
$154
$800
$1,000
Capital
Source:
‡
$97
$62 $870
$742
$0
14
$946
$110
Flow Battery ‡
‡
$1,046
$193
$677
‡
Lead-Acid
$171
$104
Flow Battery ‡
COMMERCIAL
APPLIANCE
$93
$876
‡
‡
$151
$97
$178 $37 $177 $24 $416
Battery ‡
‡
$206
$31 $143 $52 $562
Flow Battery ‡
Lead-Acid
$107
$520
‡
‡
$138
$1,200
O&M
$157
$1,400
Charging
$178
$164
$236
$2,238
$1,596
$1,600
$1,800
$2,000
$2,200
$2,400
Taxes
Levelized Cost ($/MWh)
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Capital Cost Comparison
While capital costs of certain energy storage technology and use case combinations are currently high relative to selected conventional
alternatives and, in some cases, more established energy storage technologies (e.g., pumped hydro, compressed air, etc.), capital costs
must be considered along with a number of other factors that impact the levelized cost of energy storage (e.g., energy density, cycling
capability, etc.)
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
$171
‡
$324
‡
‡
Zinc
$213
$449
‡ (a)
Flow Battery ‡
PEAKER
REPLACEMENT
Lead-Acid
Lithium-Ion
‡
Sodium
‡
Zinc
FREQUENCY
REGULATION
Lithium-Ion
Lead-Acid
Lithium-Ion
Sodium
$414
$1,182
$576
$1,960
$446
$1,098
$472
‡ (a)
$1,391
$258
$437
$1,200
$307
$627
‡
$304
$477
$1,387
$682
$2,072
$622
‡
$1,425
$611
‡ (a)
$0
‡
(a)
$1,434
$662
Lithium-Ion ‡
Source:
Note:
$1,145
$483
‡ (a)
Lead-Acid
$2,542
$492
‡
‡
$1,720
$1,003
‡
‡
Zinc
$3,000+
$1,800
‡
Flow Battery
Sodium
15
$234
Flywheel
Zinc
PV INTEGRATION
$1,367
$297
Flow Battery ‡
DISTRIBUTION
SERVICES
$1,075
$313
‡
‡
$1,937
$422
Pumped Hydro
Sodium
$970
$553
$359
$1,751
$532
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Capital Cost ($/kWh)
Lazard estimates.
Capital cost information presented on this page as the sum of AC and DC capital costs per kWh of usable energy. Figures as presented on this page exclude assumed EPC and administrative costs
(assumed to be 15% of AC and DC capital costs).
Indicates battery technology.
Zinc technologies are not currently widely commercially deployed. Capital costs are likely lower than other energy storage technologies due to survey participants’ willingness to incorporate possible future
capital cost decreases into current quotes/estimates.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Capital Cost Comparison (cont’d)
While capital costs of certain energy storage technology and use case combinations are currently high relative to selected conventional
alternatives and, in some cases, more established energy storage technologies (e.g., pumped hydro, compressed air, etc.), capital costs
must be considered along with a number of other factors that impact the levelized cost of energy storage (e.g., energy density, cycling
capability, etc.)
Flow Battery
Lead-Acid
MICROGRID
$659
$650
‡ (a)
Battery ‡
Lithium-Ion
$476
Sodium
‡
$466
$611
‡ (a)
Flow Battery ‡
COMMERCIAL
INDUSTRIAL
Lithium-Ion
‡
Sodium
‡
Zinc
COMMERCIAL
APPLIANCE
Flow Battery
Lead-Acid
‡
Lithium-Ion
‡
Zinc
Flow Battery
Lead-Acid
‡
Lithium-Ion
‡
RESIDENTIAL
‡
(a)
16
$1,418
$288
$461
$1,081
$2,021
$386
$1,149
$487
$309
$1,438
$481
$649
$1,060
$764
$2,148
$634
$482
$1,286
$625
$500
$1,604
$1,004
$2,388
$946
$0
Source:
Note:
$1,128
$631
‡ (a)
‡
$2,001
$311
‡ (a)
‡
$784
$1,061
‡
‡
$1,601
$291
Lead-Acid
Lead-Acid
$2,184
$1,312
$540
‡
Zinc
$2,400
$934
Sodium ‡
Zinc
ISLAND
$859
‡
‡
Lithium-Ion
Flow
‡
$500
$1,700
$1,000
$1,500
$2,000
$2,500
$3,000
Capital Cost ($/kWh)
Lazard estimates.
Capital cost information presented on this page as the sum of AC and DC capital costs per kWh of usable energy. Figures as presented on this page exclude assumed EPC and administrative costs
(assumed to be 15% of AC and DC capital costs).
Indicates battery technology.
Zinc technologies are not currently widely commercially deployed. Capital costs are likely lower than other energy storage technologies due to survey participants’ willingness to incorporate possible
future capital cost decreases into current quotes/estimates.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Industry Estimated Capital Cost Outlook
Survey results indicate that Industry participants expect significant capital cost declines for the selected energy storage technologies over
the next five years, driven primarily by increased manufacturing scale and design/engineering improvements
Lead-Acid
Lithium-Ion
SLOW
MEDIAN
FAST
CAGR
(3%)
(9%)
(16%)
 Improved manufacturing and design
5-YEAR
(14%)
(38%)
(58%)
 Integration time for manufacturing
 Reduction in required high cost materials
 Improvement in control and response time
 Improvements in operation sustainability (e.g., ability
1,000
500
LIKELY DRIVERS
0
5,300
CAGR
(1%)
(2%)
(12%)
5-YEAR
(5%)
(10%)
(47%)
CAGR
(1%)
(5%)
(16%)
5-YEAR
(5%)
(24%)
(58%)
CAGR
(2%)
(12%)
(13%)
5-YEAR
(10%)
(47%)
(50%)
300
2,150
1,150
150
1,150
650
150
450
Zinc
Capital Cost ($/kWh)
Flywheel(a)
Flow Battery
PROJECTED CAPIT AL COST DECREA S E S
350
CAGR
0%
(1%)
(7%)
250
5-YEAR
0%
(5%)
(30%)
 Reduction in required high cost materials and scale
to remove heat, higher efficiency motor/generator,
etc.)
 Engineering/design improvements (e.g., additives to
increase usable energy and capability envelope)
 Reduction in lead requirement
 Increased manufacturing scale (e.g., Gigafactory)
 Reduction in required high cost materials
 Improvements in battery chemistry/design
 Cost reduction depends on manufacturing at scale
 Design improvement to reduce high cost sub-
components
 Chemistry improvements will increase lifespan and
range of operation
150
2016
2017
2018
Source:
Note:
17
Copyright 2015 Lazard.
(a)
(b)
2019
2020
Lazard estimates.
Capital cost information presented on this page represents DC capital costs per kWh of usable energy, unless otherwise indicated.
Capital costs represent total capital costs, excluding EPC and administrative capital costs.
Expected capital cost declines are somewhat muted for Zinc, likely due to zinc manufacturers/developers building expected cost declines into current quotes and the absence of meaningful market
validators to such quotes.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Impact Analysis—Capital Cost Decline on Levelized Cost of Storage
Assuming that the Energy Storage Industry’s capital cost decline expectations materialize, levelized costs of storage could decrease
materially for some use case and technology combinations(a); importantly, expected decreases in the levelized cost of storage are functions
of the magnitude of capital cost decreases expected, as well as the relative weight of DC capital costs vs. balance of system and other costs
TRANSMISSION
SYSTEM
Flow Battery
Battery
Flow
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
$217
$220
$230
$222
$248
$196
Zinc
Zinc
PEAKER
REPLACEMENT
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
PV
INTEGRATION
$290
Flow Battery
Battery
Flow
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
$369
$347
$340
$321
$461
Lithium-Ion
Lithium-Ion
Flow Battery
Flow Battery
Lead-Acid
Lead-Ion
Lithium-Ion
Lithium-Ion
Zinc
Zinc
Flow
Battery
Flow Battery
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
Zinc
Zinc
$0
$200
$165 – $218 Gas
$400
Peaker(c)
$927
$619
$419
$1,247
$970
$658
$898
$989
$923
$624
$1,692
$1,316
$789
$950
$642
$1,068
$842
$686
$600
$1,429
$1,104
$739
$427
$376
$362
$211
$389
$221
$347
$215
$335
$276
$257
$211
$275
$173
$207
$288
$227
$516
$418
$400
$260
$467
$285
$426
$276
$411
$373
$282
$402
$335
$355
$243
$418
$245
$345
$239
$334
Zinc
Zinc
Flywheel(b)
Flywheel
$892
$593
$800
$1,000
Five-year LCOS with Cost Declines
$1,200
$1,400
$1,600
$1,800
Current LCOS
Levelized Cost ($/MWh)
Source:
(a)
(b)
(c)
18
Lazard estimates.
Assumes median five-year expected DC capital cost declines only, unless otherwise indicated.
Assumes median five-year expected total capital cost declines.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives).
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Impact Analysis—Capital Cost Decline on Levelized Cost of Storage (cont’d)
Assuming that the Energy Storage Industry’s capital cost decline expectations materialize, levelized costs of storage could decrease
materially for some technology and use case combinations(a); importantly, expected decreases in the levelized cost of storage are functions
of the magnitude of capital cost decreases expected, as well as the relative weight of DC capital costs vs. balance of system and other costs
Flow Battery
Battery
Flow
$429
$1,046
$364
$751
$433
$946
$380
$770
$369
$562
$291
$394
$319
$416
$314
$408
$593
$1,231
$541
$922
$700
$1,533
$617
$1,250
$581
$870
$462
$618
$523
$677
$515
$664
$349
$1,083
$280
$731
$529
$1,511
$436
$1,182
$351
$838
$252
$507
$310
$452
$302
$438
$974
$1,504
$770
$1,101
$928
$805
$784
$1,363
$605
$911
$661
$833
$648
$812
$721
$1,657
$712
$1,254
$1,101
$992
$1,034
$1,596
$846
$1,135
Lead
Lead
MICROGRID
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
Lead
Lead
ISLAND
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
COMMERCIAL &
INDUSTRIAL
Lead
Lead
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
COMMERCIAL
APPLIANCE
Lead
Lead
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
RESIDENTIAL
Lead
Lead
Lithium
Lithium
$0
$200
$400
$212 – $281 Diesel
Reciprocating Engine
19
Source:
(a)
(b)
Copyright 2015 Lazard. (c)
$600
$800
$1,000
$1,200
$1,400
Five-year LCOS with Capital Cost Declines
$1,600
$1,800
$2,291
$1,844
$2,238
$1,855
$2,000
$2,200
$2,400
Current LCOS
Levelized Cost ($/MWh)
Lazard estimates.
Assumes median five-year expected DC capital cost declines only, unless otherwise indicated.
Assumes median five-year expected total capital cost declines.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives).
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions
Transmission
Units
Power Rating
Pumped HS
Zinc
CAES
Flow Battery
Lithium
Lead
Sodium
MW
100
–
100
100
–
100
100
–
100
100
–
100
100
–
100
100
–
100
100
–
100
Duration
Hours
8
–
8
8
–
8
8
–
8
8
–
8
8
–
8
8
–
8
8
–
8
Usable Energy
MWh
800
–
800
800
–
800
800
–
800
800
–
800
800
–
800
800
–
800
800
–
800
100% Depth of Discharge Cycles/Day
Operating Days/Year
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
300
–
300
300
–
300
300
–
300
300
–
300
300
–
300
300
–
300
300
–
300
–
20
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
Project Life
Years
20
Memo: Annual Used Energy
MWh
240,000
Memo: Project Used Energy
MWh
4,800,000 – 4,800,000
Initial Capital Cost—DC
$/kWh
--
$211
–
$390
--
$300
–
$946
$399
– $1,051
$529
– $1,913
$425
– $1,344
Initial Capital Cost—AC
$/kWh
--
$24
–
$24
--
$24
–
$24
$24
–
$24
$24
–
$24
$24
–
$24
Initial Other Owners Costs
$/kWh
$32
–
$47
$35
–
$62
$26
–
$26
$49
–
$145
$63
–
$161
$83
–
$291
$67
–
$205
Total Initial Installed Cost
$/kWh
$244
–
$359
$270
–
$476
$197
–
$197
$372
– $1,115
$486
– $1,236
$636
– $2,227
$516
– $1,573
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$317
$0
–
$0
$0
–
$0
$0
After Year 10
$0
–
$0
$130
–
$202
$0
–
$0
$105
–
$253
$209
–
$304
$333
–
$686
$269
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$222
$0
–
$0
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$0
–
$0
$16
–
$16
$0
–
$0
$16
–
$16
$16
–
$16
$16
–
$16
$16
–
$16
Replacement Capital Cost—AC
– 240,000
240,000
– 240,000
4,800,000 – 4,800,000
240,000
– 240,000
4,800,000 – 4,800,000
240,000
– 240,000
4,800,000 – 4,800,000
240,000
– 240,000
4,800,000 – 4,800,000
240,000
– 240,000
4,800,000 – 4,800,000
240,000
– 240,000
4,800,000 – 4,800,000
–
$0
– $1,033
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$2
–
$11
$4
–
$12
$4
–
$4
$3
–
$33
$7
–
$13
$13
–
$55
$10
–
$31
%
1.0%
–
3.0%
1.3%
–
2.5%
2.0%
–
2.0%
0.9%
–
3.0%
1.5%
–
1.0%
2.0%
–
2.5%
2.0%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
Charging Cost Escalator
%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
Efficiency
%
82%
–
81%
80%
–
72%
75%
–
75%
65%
–
63%
93%
–
91%
86%
–
86%
75%
–
76%
$/MWh
$188
–
$274
$230
–
$376
$192
–
$192
$290
–
$892
$347
–
$739
$461
– $1,429
$396
– $1,079
O&M Cost
O&M % of Capex
Levelized Cost of Storage
Source: Lazard estimates.
20
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Peaker Replacement
Units
Power Rating
MW
Zinc
25
–
Lithium
25
25
–
Frequency Regulation
Flow Battery
25
25
–
25
Lead
25
–
Sodium
25
25
–
25
Duration
Hours
4
–
4
4
–
4
4
–
4
4
–
4
4
–
4
Usable Energy
MWh
100
–
100
100
–
100
100
–
100
100
–
100
100
–
100
100% Depth of Discharge Cycles/Day
Operating Days/Year
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
350
–
350
350
–
350
350
–
350
350
–
350
350
–
350
–
20
20
–
20
20
–
20
20
–
20
20
–
20
Project Life
Years
20
Memo: Annual Used Energy
MWh
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
Memo: Project Used Energy
MWh
700,000
– 700,000
700,000
– 700,000
700,000
– 700,000
700,000
– 700,000
700,000
– 700,000
Initial Capital Cost—DC
$/kWh
$211
–
$390
$399
– $1,051
$250
– $1,135
$529
– $1,913
$425
– $1,344
Initial Capital Cost—AC
$/kWh
$47
–
$47
$47
–
$47
$47
–
$47
$47
–
$47
$47
–
$47
Initial Other Owners Costs
$/kWh
$39
–
$66
$67
–
$165
$45
–
$177
$86
–
$294
$71
–
$209
Total Initial Installed Cost
$/kWh
$297
–
$503
$513
– $1,263
$342
– $1,360
$663
– $2,255
$543
– $1,600
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$0
$0
–
$380
$0
–
$0
$0
After Year 10
$130
–
$202
$209
–
$304
$88
–
$304
$333
–
$686
$269
After Year 15
$0
–
$0
$0
–
$0
$0
–
$266
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$32
–
$32
$32
–
$32
$32
–
$32
$32
–
$32
$32
–
$32
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Replacement Capital Cost—AC
O&M Cost
–
$0
– $1,033
$/kWh
$/kWh
$4
–
$12
$8
–
$13
$3
–
$40
$13
–
$56
$11
–
$32
%
1.4%
–
2.4%
1.5%
–
1.0%
1.0%
–
3.0%
2.0%
–
2.5%
2.0%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
$50
–
$50
%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
%
80%
–
72%
93%
–
91%
65%
–
63%
86%
–
86%
75%
–
76%
$/MWh
$221
–
$347
$321
–
$658
$248
–
$927
$419
– $1,247
$365
–
$948
O&M % of Capex
Charging Cost Escalator
Efficiency
Levelized Cost of Storage
Source: Lazard estimates.
21
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Frequency Regulation
Units
Power Rating
Lithium
Distribution Services
Flywheel
MW
10
–
10
10
–
10
Duration
Hours
0.5
–
0.5
0.5
–
0.5
Usable Energy
MWh
100% Depth of Discharge Cycles/Day
Operating Days/Year
5
–
5
5
–
5
4.8
–
4.8
4.8
–
4.8
350
–
350
350
–
350
Project Life
Years
20
–
20
20
–
20
Memo: Annual Used Energy
MWh
8,400
–
8,400
8,400
–
8,400
Memo: Project Used Energy
MWh
168,000
– 168,000
Initial Capital Cost—DC
$/kWh
$780
– $1,300
Initial Capital Cost—AC
$/kWh
$420
–
$420
Initial Other Owners Costs
$/kWh
$180
–
$258
Total Initial Installed Cost
$/kWh
$1,380
Replacement Capital Cost—DC
$/kWh
– $1,978
168,000
– 168,000
---
$270
– $1,296
$2,070
– $9,933
After Year 5
$0
–
$0
$0
–
$0
After Year 10
$0
–
$0
$0
–
$0
After Year 15
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
After Year 10
$302
–
$302
$0
–
$0
After Year 15
$0
–
$0
$0
–
$0
$/kWh
$19
–
$40
$27
–
$129
O&M % of Capex
%
1.4%
–
2.0%
1.3%
–
1.3%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$66
–
$66
$66
–
$66
%
1.5%
–
1.5%
1.5%
–
1.5%
%
93%
–
93%
82%
–
85%
$/MWh
$211
–
$275
$276
–
$989
Replacement Capital Cost—AC
O&M Cost
Charging Cost Escalator
Efficiency
Levelized Cost of Storage
$/kWh
Source: Lazard estimates.
22
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Distribution Services
Units
Power Rating
MW
Zinc
4
–
Flow Battery
4
4
–
4
Lithium
4
–
Lead
4
4
–
Sodium
4
4
–
4
Duration
Hours
4
–
4
4
–
4
4
–
4
4
–
4
4
–
4
Usable Energy
MWh
16
–
16
16
–
16
16
–
16
16
–
16
16
–
16
100% Depth of Discharge Cycles/Day
1.0
–
1.0
1.0
–
1.0
1.0
–
1.0
1.0
–
1.0
1.0
–
1.0
Operating Days/Year
300
–
300
300
–
300
300
–
300
300
–
300
300
–
300
Project Life
Years
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
Memo: Annual Used Energy
MWh
4,800
–
4,800
4,800
–
4,800
4,800
–
4,800
4,800
–
4,800
4,800
–
4,800
Memo: Project Used Energy
MWh
96,000
– 96,000
96,000
– 96,000
Initial Capital Cost—DC
$/kWh
$247
–
$420
$250
–
Initial Capital Cost—AC
$/kWh
$57
–
$57
$57
Initial Other Owners Costs
$/kWh
$46
–
$72
$46
Total Initial Installed Cost
$/kWh
$350
–
$549
$353
– $1,154
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$317
$0
–
$0
$0
–
$0
$0
After Year 10
$153
–
$202
$79
–
$253
$209
–
$304
$333
–
$0
$269
$0
–
$0
$0
–
$222
$0
–
$0
$0
–
$0
$0
–
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$38
–
$38
$38
–
$38
$38
–
$38
$38
–
$38
$38
–
$38
After Year 15
Replacement Capital Cost—AC
96,000
– 96,000
96,000
– 96,000
96,000
– 96,000
$946
$435
– $1,088
$570
– $2,485
$425
– $1,377
–
$57
$57
–
$57
$57
–
$57
$57
–
$57
–
$150
$74
–
$172
$94
–
$381
$72
–
$215
$566
– $1,316
$721
– $2,924
$555
– $1,649
–
$0
– $1,033
$0
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$5
–
$14
$4
–
$34
$9
–
$14
$15
–
$73
$11
–
$33
O&M % of Capex
%
1.5%
–
2.5%
1.1%
–
3.0%
1.6%
–
1.1%
2.0%
–
2.5%
2.0%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$53
–
$53
$53
–
$53
$53
–
$53
$53
–
$53
$53
–
$53
Charging Cost Escalator
%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
1.5%
–
1.5%
Efficiency
%
80%
–
72%
65%
–
63%
93%
–
91%
86%
–
86%
75%
–
76%
$/MWh
$285
–
$426
$288
–
$923
$400
–
$789
$516
– $1,692
$426
– $1,129
O&M Cost
Levelized Cost of Storage
Source: Lazard estimates.
23
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
PV Integration
Units
Power Rating
Zinc
Flow Battery
Lithium
Lead
Sodium
MW
2
–
2
2
–
2
2
–
2
2
–
2
2
–
2
Duration
Hours
2
–
2
2
–
2
2
–
2
2
–
2
2
–
2
Usable Energy
MWh
4
–
4
4
–
4
4
–
4
4
–
4
4
–
4
100% Depth of Discharge Cycles/Day
1.25
–
1.25
1.25
–
1.25
1.25
–
1.25
1.25
–
1.25
1.25
–
1.25
Operating Days/Year
350
–
350
350
–
350
350
–
350
350
–
350
350
–
350
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
1,750
Project Life
Years
Memo: Annual Used Energy
MWh
1,750
–
1,750
1,750
–
1,750
1,750
–
1,750
1,750
–
1,750
1,750
–
Memo: Project Used Energy
MWh
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
35,000
– 35,000
Initial Capital Cost—DC
$/kWh
$247
–
$420
$550
– $1,275
$510
– $1,313
$570
– $1,960
$499
– $1,639
Initial Capital Cost—AC
$/kWh
$112
–
$112
$112
–
$112
$112
–
$112
$112
–
$112
$112
–
$112
Initial Other Owners Costs
$/kWh
$54
–
$80
$99
–
$208
$93
–
$214
$102
–
$311
$92
–
$263
Total Initial Installed Cost
$/kWh
$413
–
$612
$761
– $1,595
$715
– $1,638
$784
– $2,383
$702
– $2,014
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$788
$0
–
$0
$0
–
$0
$0
After Year 10
$153
–
$202
$0
–
$630
$245
–
$367
$333
–
$686
$316
After Year 15
$0
–
$0
$0
–
$551
$0
–
$0
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$75
–
$75
$75
–
$75
$75
–
$75
$75
–
$75
$75
–
$75
Replacement Capital Cost—AC
–
$0
– $1,229
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$7
–
$15
$19
–
$40
$12
–
$18
$16
–
$59
$14
–
$41
O&M % of Capex
%
1.6%
–
2.5%
2.5%
–
2.5%
1.6%
–
1.1%
2.0%
–
2.5%
2.1%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$58
–
$58
$58
–
$58
$58
–
$58
$58
–
$58
$58
–
$58
Charging Cost Escalator
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Efficiency
%
80%
–
72%
76%
–
72%
93%
–
91%
86%
–
86%
75%
–
76%
$/MWh
$245
–
$345
$373
–
$950
$355
–
$686
$402
– $1,068
$379
–
$957
O&M Cost
Levelized Cost of Storage
Source: Lazard estimates.
24
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Microgrid
Units
Power Rating
Zinc
Lithium
Flow Battery
Lead
Sodium
MW
2
–
2
2
–
2
2
–
2
2
–
2
2
–
2
Duration
Hours
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
Usable Energy
MWh
2
–
2
2
–
2
2
–
2
2
–
2
2
–
2
100% Depth of Discharge Cycles/Day
2.0
–
2.0
2.0
–
2.0
2.0
–
2.0
2.0
–
2.0
2.0
–
2.0
Operating Days/Year
350
–
350
350
–
350
350
–
350
350
–
350
350
–
350
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
1,400
Project Life
Years
Memo: Annual Used Energy
MWh
1,400
–
1,400
1,400
–
1,400
1,400
–
1,400
1,400
–
1,400
1,400
–
Memo: Project Used Energy
MWh
28,000
– 28,000
28,000
– 28,000
28,000
– 28,000
28,000
– 28,000
28,000
– 28,000
Initial Capital Cost—DC
$/kWh
$315
–
$560
$435
– $1,088
$635
– $2,176
$710
– $1,960
$425
– $1,377
Initial Capital Cost—AC
$/kWh
$224
–
$224
$224
–
$224
$224
–
$224
$224
–
$224
$224
–
$224
Initial Other Owners Costs
$/kWh
$81
–
$118
$99
–
$197
$129
–
$360
$140
–
$328
$240
Total Initial Installed Cost
$/kWh
$620
–
$902
$758
– $1,508
$988
– $2,760
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$274
–
$442
$0
–
$728
After Year 10
$195
–
$269
$209
–
$304
$0
–
After Year 15
$0
–
$0
$152
–
$213
$0
–
After Year 5
$0
–
$0
$0
–
$0
$0
After Year 10
$151
–
$151
$151
–
$151
Replacement Capital Cost—AC
$97
–
– $2,512
$747
– $1,841
$0
–
$980
$284
– $1,101
$582
$415
–
$686
$269
– $1,033
$510
$0
–
$588
$254
– $1,033
–
$0
$0
–
$0
$0
–
$0
$151
–
$151
$151
–
$151
$151
–
$151
$1,074
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$11
–
$22
$13
–
$18
$24
–
$81
$22
–
$62
$16
–
$38
O&M % of Capex
%
1.7%
–
2.4%
1.8%
–
1.2%
2.4%
–
2.9%
2.1%
–
2.5%
2.1%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$108
–
$108
$108
–
$108
$108
–
$108
$108
–
$108
$108
–
$108
Charging Cost Escalator
%
2.4%
–
2.4%
2.4%
–
2.4%
2.4%
–
2.4%
2.4%
–
2.4%
2.4%
–
2.4%
Efficiency
%
80%
–
72%
93%
–
91%
67%
–
63%
86%
–
86%
75%
–
76%
$/MWh
$319
–
$416
$369
–
$562
$429
– $1,046
$433
–
$946
$411
–
$835
O&M Cost
Levelized Cost of Storage
Source: Lazard estimates.
25
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Island
Units
Power Rating
Zinc
Lithium
Co
Flow Battery
Sodium
Lead
MW
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
Duration
Hours
6
–
6
6
–
6
6
–
6
6
–
6
6
–
6
Usable Energy
MWh
6
–
6
6
–
6
6
–
6
6
–
6
6
–
6
100% Depth of Discharge Cycles/Day
Operating Days/Year
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
350
–
350
350
–
350
350
–
350
350
–
350
350
–
350
20
–
20
20
–
20
20
–
20
20
–
20
20
–
20
2,100
Project Life
Years
Memo: Annual Used Energy
MWh
2,100
–
2,100
2,100
–
2,100
2,100
–
2,100
2,100
–
2,100
2,100
–
Memo: Project Used Energy
MWh
42,000
– 42,000
42,000
– 42,000
42,000
– 42,000
42,000
– 42,000
42,000
– 42,000
Initial Capital Cost—DC
$/kWh
$247
–
$420
$435
– $1,088
$250
– $1,020
$425
– $1,377
$570
– $1,960
Initial Capital Cost—AC
$/kWh
$41
–
$41
$41
–
$41
$41
–
$41
$41
–
$41
$41
–
$41
Initial Other Owners Costs
$/kWh
$43
–
$69
$71
–
$169
$44
–
$159
$70
–
$213
$92
–
$300
Total Initial Installed Cost
$/kWh
$331
–
$530
$547
– $1,298
$335
– $1,220
$536
– $1,630
$703
– $2,301
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$0
$0
–
$630
$0
After Year 10
$153
–
$202
$209
–
$0
$88
–
$504
$269
After Year 15
$0
–
$0
$0
–
$0
$0
–
$441
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
After Year 10
$27
–
$27
$27
–
$27
$27
–
$27
$27
–
Replacement Capital Cost—AC
–
$0
$0
–
$0
$333
–
$686
$0
–
$0
$0
$0
–
$0
$27
$27
–
$27
– $1,033
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$5
–
$13
$9
–
$14
$3
–
$30
$11
–
$33
$14
–
$57
O&M % of Capex
%
1.4%
–
2.5%
1.6%
–
1.0%
1.0%
–
2.5%
2.0%
–
2.0%
2.0%
–
2.5%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$281
–
$281
$281
–
$281
$281
–
$281
$281
–
$281
$281
–
$281
Charging Cost Escalator
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Efficiency
%
80%
–
72%
93%
–
91%
65%
–
72%
75%
–
76%
86%
–
86%
$/MWh
$523
–
$677
$581
–
$870
$593
– $1,231
$663
– $1,259
$700
– $1,533
O&M Cost
Levelized Cost of Storage
Source: Lazard estimates.
26
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Commercial & Industrial
Units
Power Rating
Zinc
Lithium
Commercia
Flow Battery
Lead
Sodium
MW
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
Duration
Hours
4
–
4
4
–
4
4
–
4
4
–
4
4
–
4
Usable Energy
MWh
4
–
4
4
–
4
4
–
4
4
–
4
4
–
4
100% Depth of Discharge Cycles/Day
Operating Days/Year
1
–
1
1
–
1
1
–
1
1
–
1
1
–
1
350
–
350
350
–
350
350
–
350
350
–
350
350
–
350
10
–
10
10
–
10
10
–
10
10
–
10
10
–
10
1,400
Project Life
Years
Memo: Annual Used Energy
MWh
1,400
–
1,400
1,400
–
1,400
1,400
–
1,400
1,400
–
1,400
1,400
–
Memo: Project Used Energy
MWh
14,000
– 14,000
14,000
– 14,000
14,000
– 14,000
14,000
– 14,000
14,000
– 14,000
Initial Capital Cost—DC
$/kWh
$247
–
$420
$325
– $1,088
$250
– $1,020
$570
– $1,960
$425
– $1,377
Initial Capital Cost—AC
$/kWh
$61
–
$61
$61
–
$61
$61
–
$61
$61
–
$61
$61
–
$61
Initial Other Owners Costs
$/kWh
$46
–
$72
$58
–
$172
$47
–
$162
$95
–
$303
$73
–
$216
Total Initial Installed Cost
$/kWh
$355
–
$554
$444
– $1,321
$358
– $1,244
$726
– $2,325
$560
– $1,654
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$0
$0
–
$630
$0
–
$0
$0
–
$0
After Year 10
$0
–
$0
$0
–
$0
$84
–
$0
$0
–
$0
$0
–
$0
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$41
–
$41
$41
–
$41
$41
–
$41
$41
–
$41
$41
–
$41
Replacement Capital Cost—AC
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$5
–
$14
$5
–
$14
$4
–
$31
$15
–
$58
$11
–
$33
O&M % of Capex
%
1.5%
–
2.5%
1.2%
–
1.1%
1.1%
–
2.5%
2.0%
–
2.5%
2.0%
–
2.0%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$70
–
$70
$70
–
$70
$70
–
$70
$70
–
$70
$70
–
$70
Charging Cost Escalator
%
2.6%
–
2.6%
2.6%
–
2.6%
2.6%
–
2.6%
2.6%
–
2.6%
2.6%
–
2.6%
Efficiency
%
80%
–
72%
85%
–
91%
65%
–
72%
86%
–
86%
75%
–
76%
$/MWh
$310
–
$452
$351
–
$838
$349
– $1,083
$529
– $1,511
$444
– $1,092
O&M Cost
Levelized Cost of Storage
Source: Lazard estimates.
27
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Commercial Appliance
Units
Power Rating
Zinc
Lithium
Residential
Lead
Flow Battery
MW
0.1
–
0.1
0.1
–
0.1
0.1
–
0.1
0.1
–
0.1
Duration
Hours
2
–
2
2
–
2
2
–
2
2
–
2
Usable Energy
MWh
0.2
–
0.2
0.2
–
0.2
0.2
–
0.2
0.2
–
0.2
100% Depth of Discharge Cycles/Day
Operating Days/Year
1
–
1
1
–
1
1
–
1
1
–
1
250
–
250
250
–
250
250
–
250
250
–
250
Project Life
Years
10
–
10
10
–
10
10
–
10
10
–
10
Memo: Annual Used Energy
MWh
50
–
50
50
–
50
50
–
50
50
–
50
500
500
Memo: Project Used Energy
MWh
500
–
500
500
–
500
–
500
–
500
Initial Capital Cost—DC
$/kWh
$247
–
$390
$399
– $1,051
$529
– $1,913
$414
–
$825
Initial Capital Cost—AC
$/kWh
$235
–
$235
$235
–
$235
$235
–
$235
$235
–
$235
Initial Other Owners Costs
$/kWh
$72
–
$94
$95
–
$193
$115
–
$322
$97
–
$159
Total Initial Installed Cost
$/kWh
$555
–
$719
$729
– $1,479
$879
– $2,471
$746
– $1,219
Replacement Capital Cost—DC
$/kWh
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$276
–
$525
After Year 10
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$168
–
$168
$168
–
$168
$168
–
$168
$168
–
$168
After Year 15
Replacement Capital Cost—AC
$/kWh
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$/kWh
$11
–
$19
$14
–
$20
$20
–
$63
$19
–
$31
%
2.0%
–
2.6%
2.0%
–
1.3%
2.2%
–
2.5%
2.6%
–
2.6%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
O&M Cost
O&M % of Capex
$/MWh
$108
–
$108
$108
–
$108
$108
–
$108
$108
–
$108
Charging Cost Escalator
%
2.4%
–
2.4%
2.4%
–
2.4%
2.4%
–
2.4%
2.4%
–
2.4%
Efficiency
%
80%
–
72%
93%
–
91%
86%
–
86%
77%
–
72%
$/MWh
$661
–
$833
$784
– $1,363
$928
– $2,291
$974
– $1,504
Levelized Cost of Storage
Lithium
Source: Lazard estimates.
28
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
LAZARD'S LEVELIZED COST OF STORAGE ANALYSIS—VERSION 1.0
Levelized Cost of Storage—Key Assumptions (cont’d)
Residential
Units
Power Rating
Lithium
Lead
Flow Battery
MW
0.005
–
0.005
0.005
–
0.005
0.005
–
0.005
Duration
Hours
2
–
2
2
–
2
2
–
2
Usable Energy
MWh
0.01
–
0.01
0.01
–
0.01
0.01
–
0.01
1
–
1
1
–
1
1
–
1
100% Depth of Discharge Cycles/Day
Operating Days/Year
300
–
300
300
–
300
300
–
300
Project Life
Years
10
–
10
10
–
10
10
–
10
Memo: Annual Used Energy
MWh
3
–
3
3
–
3
3
–
3
–
30
30
–
30
30
Memo: Project Used Energy
MWh
30
30
–
Initial Capital Cost—DC
$/kWh
$471
– $1,225
$529
– $1,913
$25
– $1,129
Initial Capital Cost—AC
$/kWh
$475
–
$475
$475
–
$475
$475
–
$475
Initial Other Owners Costs
$/kWh
$142
–
$255
$151
–
$358
$75
–
$241
Total Initial Installed Cost
$/kWh
$1,088
$575
– $1,845
Replacement Capital Cost—DC
$/kWh
– $1,955
$1,155
– $2,747
After Year 5
$0
–
$0
$0
–
$0
$0
–
$381
After Year 10
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
$0
–
$0
After Year 5
$0
–
$0
$0
–
$0
$0
–
$0
After Year 10
$315
–
$315
$315
–
$315
$315
–
$0
After Year 15
$0
–
$0
$0
–
$0
$0
–
$0
After Year 15
Replacement Capital Cost—AC
O&M Cost
$/kWh
$/kWh
$35
–
$41
$39
–
$82
$28
–
$39
%
3.3%
–
2.1%
3.4%
–
3.0%
4.9%
–
2.1%
Investment Tax Credit
%
0.0%
–
0.0%
0.0%
–
0.0%
0.0%
–
0.0%
Production Tax Credit
$/MWh
$0
–
$0
$0
–
$0
$0
–
$0
Charging Cost
$/MWh
$125
–
$125
$125
–
$125
$125
–
$125
%
2.5%
–
2.5%
2.5%
–
2.5%
2.5%
–
2.5%
%
92%
–
89%
86%
–
86%
76%
–
63%
$/MWh
$1,034
$721
– $1,657
O&M % of Capex
Charging Cost Escalator
Efficiency
Levelized Cost of Storage
– $1,596
$1,101
– $2,238
Source: Lazard estimates.
29
Copyright 2015 Lazard.
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