Skip to main content

U.S. Energy Department aims for 90% reduction in long-duration battery storage costs by 2030

December 23, 2020

S&P Global Market Intelligence ($):

With U.S. energy storage additions on pace to smash records in 2020 and 2021, despite delays related to the COVID-19 pandemic, the U.S. Energy Department on Dec. 21 released its first comprehensive storage strategy.

The DOE road map aims to scale-up America’s domestic manufacturing industry to meet all of the country’s demand for energy storage by 2030. Given Asia’s early dominant position in producing lithium-ion batteries, however, the United States faces a challenging game of catch-up.

The DOE’s strategy appeared the same day Congress passed a $900 billion coronavirus economic relief package that contains $1 billion in investments for energy storage research, development and demonstration as well as extended tax incentives for energy storage systems coupled with solar arrays.

As part of its overarching ambition to stimulate domestic energy storage manufacturing, initially announced in January, the DOE is betting on the need for long-duration storage to balance electric grids that increasingly rely on variable renewable energy resources. The agency set a goal for the levelized cost of energy from such resources, which it defines as capable of providing more than 10 hours of storage, to plummet to 5 cents/kWh by 2030, an estimated 90% reduction.

Levelized premiums for recent solar-plus-storage contracts in the U.S. Southwest, including mostly four-hour lithium-ion battery systems, have ranged from roughly 0.3 to 1.8 cents per kWh, according to the Lawrence Berkeley National Laboratory, depending on battery system size. The DOE is also exploring alternative technologies to lithium-ion batteries, including pumped hydroelectric storage, zinc-based batteries, flow batteries and green hydrogen.

“Achieving this levelized cost target would facilitate commercial viability for storage across a wide range of uses,” the DOE said. That includes meeting peak demand, preparing the grid for electric-vehicle fast charging, ensuring system reliability, boosting the flexibility of individual systems and facilitating “the transformation of the power system,” the agency said.

[Garrett Hering]

More ($): U.S. energy storage strategy targets domestic manufacturing boom

Join our newsletter

Keep up to date with all the latest from IEEFA