Economics of the Li-ion batteries and reversible fuel cells as energy storage systems when coupled with dynamic electricity pricing schemes

Abstract The intermittent nature of power generated by renewable energy systems makes it harder for many power grids to accommodate large generations in short period of times. In this paper, we quantify and discuss the cost associated with storing excess energy from the wholesale electricity markets in the United States in the form of hydrogen using proton exchange membrane reversible fuel cells (PEM-RFC) and in the form of electrochemical energy stored in lithium-ion batteries (LIB). The key financial metric used in this study is the levelized cost of electricity storage (LCOS). Results show that electricity can be stored in many regions in the U.S. at very competitive costs, reaching as low as 16.6¢/kWh using RFC and 8.6¢/kWh using LIB using electricity purchased from California Independent System Operator (CAISO). These values are near the future targets set by the U.S. Department of Energy of 5¢/kWh. Sensitivity analysis revealed that the LCOS using both ESSs is dependent on the following design and financial parameters from higher to lower effect: ESS roundtrip efficiency, system capital cost and the expected system lifetime, respectively. Analysis of system performance and economics showed that LIB seem to have better economic advantage based on the LCOS values, but lack the flexibility of the RFC system. RFC, on the other hand, has more advantages in terms of the size of energy storage capacity, operational charging/discharging flexibility, and the effect on increasing the grid resiliency, especially during long periods of power outages.