Backup battery cost fantasies abound


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The only technologically feasible way to make renewables reliable at in the foreseeable future is with massive amounts of grid scale batteries. Whether this is even remotely feasible depends on the cost and here things get truly strange.

On the one hand we have real utility reports of the capital cost of these big battery arrays. Battery systems that have actually been built. On the other hand we have projected capital costs, which are being used to defend the growth of unreliable renewables.

The real costs and the projected costs are wildly different. So different that the projected costs have the aspect of fantasy.

Let’s start with the reality. The EIA collected annual utility data on the cost of grid scale battery arrays. Their most recent report is “Battery Storage in the United States: An Update on Market Trends — August 2021”.

From 2013 to 2018 the average reported cost was around $1,500,000 per MWh. The range was pretty large, from under $500,000 to around $3,000,000 per MWh.

It is worth noting that in 2020 EIA excitedly reported a big drop in cost. This was from an average of $2,100,000 in 2015 way down to a low of $600,000 in 2019. I am rather skeptical that this 70% cost drop was real. There was no technological breakthrough to cause it. I suspect it was either a case of price cutting or of utilities manipulating their cost reports. Tesla has been bidding very low, at around $500,000 for some time. These are likely loss leader bids.

It is certainly the case that the cost must be going way up these days, not down, given the huge price spike in lithium and other essential constituent materials, as well as in the energy needed for making these monster battery arrays.

So it seems fair to say that the cost is at least $600,000 a MWh, quite possibly a lot more. A million dollars a MWh is not an unreasonable estimate. Keep in mind that a MWh is what an average American home uses in just a month, so it is not a lot of juice storage for a lot of money.

Now comes the fantasy. There are several recent mainstream estimates of the future capital cost of grid scale battery arrays. These estimates are often used in assessments of the economic feasibility of a transition from coal and gas fired generation to wind and solar. The battery cost estimates are crucial because it will take an enormous amount of batteries to try to make intermittent wind and solar reliable.

For example, DOE’s National Renewable Energy Laboratory has published battery cost projections through 2050 in their report “Cost Projections for Utility Scale Battery Storage: 2021 Update”. NREL is gung ho on renewables, so also on the batteries needed to try to make wind and solar reliable.

Each NREL projection is for a narrow range of costs. The low end of that range is a mere $143,000 per MWh in 2030 and $87,000 in 2050. That is right, just $87,000 for something that today costs $600,000 to $1,000,000, with costs going up.

Clearly this protection is extremely rosy, to the point of fantasy.

In a recent report — “The Future of Energy Storage” — MIT goes even lower. Their 2050 battery cost estimate is a tiny $70,000 per MWh! For something that costs upwards of a million dollars today. Surely this is pure fantasy.

Mind you given the Biden goal of zero electric power emissions by 2035, the 2050 fantasy figure may be irrelevant. But even NREL’s 2030 estimate of $143,000 is unbelievable. Given the way prices are rising, $1,000,000 is a better bet. Plus Biden’s goal is itself pure fantasy.

In short, energy policy needs to be based on sound engineering estimates, not wishful fantasies.

  • David Wojick, Ph.D. is an independent analyst working at the intersection of science, technology and policy. For origins see http://www.stemed.info/engineer_tackles_confusion.html For over 100 prior articles for CFACT see http://www.cfact.org/author/david-wojick-ph-d/ Available for confidential research and consulting.

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