BATTERY SYSTEM CAPITAL COSTS, OPERATING COSTS, ENERGY LOSSES, AND AGING
https://www.windtaskforce.org/profiles/blogs/battery-system-capital-costs-losses-and-aging
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Utility-scale, battery system pricing usually not made public, but for this system it was.
Neoen, in western Australia, turned on its 219 MW/ 877 MWh Tesla Megapack battery, the largest in western Australia.
Ultimately, a 560 MW/2,240 MWh battery system, $1,100,000,000/2,240,000 kWh = $491/kWh, delivered as AC, late 2024 pricing. Smaller capacity systems will cost much more than $500/kWh
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Annual Cost of Megapack Battery Systems; 2023 pricing
Assume 45.3 MW/181.9 MWh; turnkey cost $104.5 million; 104,500,000/181,900 = $574/kWh, per Example 2
Amortize bank loan, 50% of $104.5 million, at 6.5%/y for 15 years, $5.484 million/y
Pay Owner return, 50% of $104.5 million, at 10%/y for 15 years, $6.765 million/y (10% due to high inflation)
Lifetime (Bank + Owner) payments 15 x (5.484 + 6.765) = $183.7 million
Assume battery daily usage, 15 years at 10%; loss factor = 1/(0.9 *0.9)
Battery lifetime output = 15 y x 365 d/y x 181.9 MWh x 0.1, usage x 1000 kWh/MWh = 99,590,250 kWh to HV grid; 122,950,926 kWh from HV grid; 233,606,676 kWh loss
(Bank + Owner) payments, $183.7 million / 99,590,250 kWh = 184.5 c/kWh
Less 50% subsidies (tax credits, 5-y depreciation, loan interest deduction) is 92.3c/kWh
Subsidies shift costs from project Owners to ratepayers, taxpayers, government debt.
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Excluded costs/kWh: 1) O&M; 2) system aging, 1.5%/y, 3) loss factor 1/(0.9*0.9), HV grid-to-HV grid, 4) grid extension/reinforcement to connect battery systems, 5) downtime of parts of the system, 6) decommissioning in year 15, i.e., disassembly, reprocessing and storing at hazardous waste sites. Excluded costs would add at least 15 c/kWh
COMMENTS ON CALCULATION
Almost all existing battery systems operate at less than 10%, per EIA annual reports i.e., new systems would operate at about 92.4 + 15 = 107.4 c/kWh. They are used to stabilize the grid, i.e., frequency control and counteracting up/down W/S outputs. If 40% throughput, 23.1 + 15 = 38.1 c/kWh.
A 4-h battery system costs 38.1 c/kWh of throughput, if operated at a duty factor of 40%.
That is on top of the cost/kWh of the electricity taken from the HV grid to feed the batteries
Up to 40% could occur by absorbing midday solar peaks and discharging during late-afternoon/early-evening, in sunny California and other such states. The more solar systems, the greater the peaks.
See URL for Megapacks required for a one-day wind lull in New England
40% throughput is close to Tesla’s recommendation of 60% maximum throughput, i.e., not charge above 80% and not discharge below 20%, to perform 24/7/365 service for 15 y, with normal aging.
Owners of battery systems with fires, likely charged above 80% and discharged below 20% to maximize profits.
Tesla’s recommendation was not heeded by the Owners of the Hornsdale Power Reserve in Australia. They excessively charged/discharged the system. After a few years, they added Megapacks to offset rapid aging of the original system, and added more Megapacks to increase the rating of the expanded system.
http://www.windtaskforce.org/profiles/blogs/the-hornsdale-power-reserve-largest-battery-system-in-australia
Regarding any project, Banks and Owners have to be paid, no matter what. I amortized the Bank loan and Owner’s investment
Divide total payments over 15 years by the throughput during 15 years, you get c/kWh, as shown.
Loss factor = 1/(0.9 *0.9), from HV grid to 1) step-down transformer, 2) front-end power electronics, 3) into battery, 4) out of battery, 5) back-end power electronics, 6) step-up transformer, to HV grid, i.e., draw about 50 units from the HV grid to deliver about 40 units to the HV grid. That gets worse with aging.
A lot of people do not like these c/kWh numbers, because they have been repeatedly told by self-serving folks, battery Nirvana is just around the corner.
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NOTE: EV battery packs cost about $135/kWh, before it is installed in the car. Such packs are good for 6 to 8 years, used about 2 h/d, at an average speed of 30 mph. Utility battery systems are used 24/7/365 for 15 years