Cost Projections for Utility-Scale Battery Storage: 2023 Update Wesley Cole and Akash Karmakar National Renewable Energy Laboratory NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Contract No. DE-AC36-08GO28308 Technical Report NREL/TP-6A40-85332 June 2023 Cost Projections for Utility-Scale Battery Storage: 2023 Update Wesley Cole and Akash Karmakar National Renewable Energy Laboratory Suggested Citation Cole, Wesley and Akash Karmakar. 2023. Cost Projections for Utility-Scale Battery Storage: 2023 Update. Golden, CO: National Renewable Energy Laboratory. NREL/TP-6A40-85332. https://www.nrel.gov/docs/fy23osti/85332.pdf. NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC Technical Report NREL/TP-6A40-85332 June 2023 This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. National Renewable Energy Laboratory 15013 Denver West Parkway Golden, CO 80401 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Strategic Programs, Policy and Analysis Office. The views expressed herein do not necessarily represent the views of the DOE or the U.S. Government. This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. U.S. Department of Energy (DOE) reports produced after 1991 and a growing number of pre-1991 documents are available free via www.OSTI.gov. Cover Photos by Dennis Schroeder: (clockwise, left to right) NREL 51934, NREL 45897, NREL 42160, NREL 45891, NREL 48097, NREL 46526. NREL prints on paper that contains recycled content. Acknowledgments We are grateful to ReEDS modeling team for their input on this work. We also thank Bethany Frew, Vignesh Ramasamy, and Matt Rippe for providing feedback on this year’s report. This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DEAC36-08GO28308. Funding provided by U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Strategic Analysis team. The views expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. All errors and omissions are the sole responsibility of the authors. iii This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications. Executive Summary 4-hr Battery Cost Projections (relative to 2022) In this work we describe the development of cost and performance projections for utility-scale lithium-ion battery systems, with a focus on 4-hour duration systems. The projections are developed from an analysis of recent publications that include utility-scale storage costs. The suite of publications demonstrates wide variation in projected cost reductions for battery storage over time. Figure ES-1 shows the suite of projected cost reductions (on a normalized basis) collected from the literature (shown in gray) as well as the low, mid, and high cost projections developed in this work (shown in black). Figure ES-2 shows the overall capital cost for a 4-hour battery system based on those projections, with storage costs of $245/kWh, $326/kWh, and $403/kWh in 2030 and $159/kWh, $226/kWh, and $348/kWh in 2050. Battery variable operations and maintenance costs, lifetimes, and efficiencies are also discussed, with recommended values selected based on the publications surveyed. 1 0.8 High 0.6 Mid 0.4 Literature Values Low 0.2 0 2020 2025 2030 2035 2040 2045 2050 Figure ES-1. Battery cost projections for 4-hour lithium-ion systems, with values normalized relative to 2022. The high, mid, and low cost projections developed in this work are shown as bolded lines. 4-hour Battery Capital Cost (2022$/kWh) 600 500 400 High 300 Mid 200 Low 100 0 2020 2025 2030