Energy storage is quite a hot topic nowadays and the three articles on the internalized costs of energy storage therefore enjoyed broad readership and thorough discussions. Results from the internalized costs of mature storage technologies, batteries and synfuels will be summarized here for ease of reference.
The metric used in the comparison is the spread between the selling and buying price of electricity required by the different technologies to break even when it comes to price arbitrage applications. More details on this metric can be found in the articles linked above.
Internalized costs of electricity storage
The internalized costs of different energy storage options are shown in the graph below. Error bars represent the range of estimates given in the comments below the original articles. Note that all energy storage options present the possibility for shaving wind/solar peaks and filling wind/solar troughs, except for thermal backup which can only fill the troughs.
It is clear that the costs of all storage technologies (aside from chemical potential energy in fuels used for thermal backup) are substantially higher than the general electricity wholesale price. The mature technologies of pumped hydro and compressed air are the most cost effective at present, but their very limited deployment globally demonstrates their lack of economic viability.
Battery technology is the hottest electricity storage topic at present, but remains about one order of magnitude away from making economic sense for arbitrage applications. Batteries make more economic sense for other storage applications such as frequency regulation and off-grid dwellings, but these markets are tiny next to the potential size of the price arbitrage market.
Power to gas to power is the only technology that makes sense for seasonal energy storage. Given that weather dependent electricity generation technologies can vary greatly between seasons, this could also be an important storage application in the long term.
Internalized costs of synfuel storage
Creating liquid synfuels from excess electricity can lead to fuel costs of $202 per barrel of oil equivalent. Given the potential for future technology improvements, this peak shaving energy storage option could form a synergistic partnership with thermal backup for trough filling in the long term.
In general, energy storage is still a very long way from large scale deployment. However, the long-term future holds more promise as technology costs decline and price variations in the wholesale electricity market increase. This will be the topic of the “future costs” chapter of the Seeking Consensus project.