Techno-economic assessment of energy storage systems using annualized life cycle cost of storage (LCCOS) and levelized cost of energy (LCOE) metrics

Abstract

Energy generation from renewable energy sources (RESs) is rapidly developing across the world to improve the performance of power networks and increase the share of RESs in world energy production. In this regard, energy storage (ES) technologies are the key enablers for reliable use of renewables because they introduce many benefits for modern power systems. However, the choice of a suitable technology depends on several techno-economic metrics, which require the decision-maker to investigate the applicability of the technology and whether it offers promising benefits or not. Hence, this paper presents an ES cost model that considers long-term, medium-term, and short-term ES applications, technologies and technical characteristics in an integrated framework that consider the ES technical and economic characteristics supported by in-market insight, including capital costs of the technologies; operation and maintenance costs; replacement costs during the lifetime of the system; and disposal and recycling costs, based on the current ES costs. Two key metrics, namely the annualized life cycle cost of storage (LCCOS) and the levelized cost of energy (LCOE), are used to make proper ES operational choices while complying with their technical and operational performance limits. Further, a sensitivity analysis of the governing factors that affect the storage cost is presented to introduce a powerful decision tool to empower techno-economic assessment of ES systems using the proposed cost models.