🤔 Are you already using Levelised Cost of Storage (LCoS) to make tech decisions? ⚡ How do you factor in storage flexibility beyond just energy? 🌍 Are you considering ESG, space requirements, and safety? 📈 Can your LCoS analysis capture extreme market price scenarios? Check out Leon's post for all the details! 👉
𝐀𝐫𝐞 𝐲𝐨𝐮 𝐮𝐬𝐢𝐧𝐠 𝐋𝐞𝐯𝐞𝐥𝐢𝐬𝐞𝐝 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐒𝐭𝐨𝐫𝐚𝐠𝐞 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬? There are exiting times in the field of energy storage. More and more technologies are pushing to the market (so are we at phelas). While competition is great for the energy transition; utilities, renewable developer and integrators are facing an increasing number of options to choose from, risking to make suboptimal decisions. We often get asked about the Levelised Cost of Storage (LCoS) of different technologies. But giving an LCoS without providing the methodology and key assumptions is like giving a weather forecast without telling you the time and location. To navigate this complexity, established resources like the Lazard LCoS Report and "Monetizing Energy Storage" by Oliver Schmidt and Iain Staffell offer invaluable insights. By leveraging these trusted calculation methods, we provide transparency for our partners and customers, aiding informed decision-making across various use cases and technologies. While we love the LCoS for making the energy storage market more comparable, it also comes with essential downsides. 1) LCoS is focusing on the energy provided. However, Energy storage flexibility is more than just energy. Viable business cases stack successfully revenue from Ancillary and Capacity Markets, which are mainly power provision markets. 2) The LCoS focuses solely on economic parameters and misses ESG and other key parameters, such as space requirements, operational safety or maturity. 3) The LCoS does not provide information about value creation and ability to capture market prices. While a 4h Lithium system might have a better LCoS than a 12 hour LDES technology, one might better capture extreme price scenarios. Our Conclusion: It is important to have good grip on costs and the levelised cost of storage is an excellent tool to screen the market for viable solutions. However, it comes with the mentioned downsides. This is why we recommend techno-economic simulation of use cases to calculate the actual value creation for each technology Reach out for more!
