Skip to main content
The 2024 Electricity ATB is live! Join the webinar to learn what's new. Register to attend or sign up for general email updates.

Utility-Scale Battery Storage

The battery storage technologies do not calculate levelized cost of energy (LCOE) or levelized cost of storage (LCOS) and so do not use financial assumptions. Therefore, all parameters are the same for the research and development (R&D) and Markets & Policies Financials cases.

The 2024 ATB represents cost and performance for battery storage with durations of 2, 4, 6, 8, and 10 hours. It represents lithium-ion batteries (LIBs)—primarily those with nickel manganese cobalt (NMC) and lithium iron phosphate (LFP) chemistries—only at this time, with LFP becoming the primary chemistry for stationary storage starting in 2022. There are a variety of other commercial and emerging energy storage technologies; as costs are characterized to the same degree as LIBs, they will be added to future editions of the ATB.

The National Renewable Energy Laboratory's (NREL's) Storage Futures Study examined energy storage costs broadly and the cost and performance of LIBs specifically (Augustine and Blair, 2021). The costs presented here (and for distributed residential storage and distributed commercial storage) are based on that study. This work incorporates base year battery costs and breakdowns from (Ramasamy et al., 2022) (the same as the 2023 ATB), which works from a bottom-up cost model.

Base year costs for utility-scale battery energy storage systems (BESSs) are based on a bottom-up cost model using the data and methodology for utility-scale BESS in (Ramasamy et al., 2023). The bottom-up BESS model accounts for major components, including the LIB pack, the inverter, and the balance of system (BOS) needed for the installation. Using the detailed NREL cost models for LIB, we develop base year costs for a 60-megawatt (MW) BESS with storage durations of 2, 4, 6, 8, and 10 hours, (Cole and Karmakar, 2023). Base year installed capital costs for BESSs decrease with duration (for direct storage, measured in $/kWh) whereas system costs (in $/kW) increase. This inverse behavior is observed for all energy storage technologies and highlights the importance of distinguishing the two types of battery capacity when discussing the cost of energy storage.

Scenario Descriptions

Battery cost and performance projections in the 2024 ATB are based on a literature review of 16 sources published in 2022 and 2023, as described by Cole and Karmakar (Cole and Karmakar, 2023). Three projections for 2022 to 2050 are developed for scenario modeling based on this literature.

In all three scenarios of the scenarios described below, costs of battery storage are anticipated to continue to decline. The Storage Futures Study (Augustine and Blair, 2021) describes how a greater share of this cost reduction comes from the battery pack cost component with fewer cost reductions in BOS, installation, and other components of the cost. The Storage Futures Study report (Augustine and Blair, 2021) indicates NREL, BloombergNEF (BNEF), and others anticipate the growth of the overall battery industry—across the consumer electronics sector, the transportation sector, and the electric utility sector—will lead to cost reductions in the long term. In the short term, some analysts expect flat or even increasing pricing for battery storage. In addition, BNEF and others indicate changes in lithium-ion chemistry (e.g., switching from cobalt) will also reduce costs as the technology evolves. A third key factor is ongoing innovation with significant corporate and public research on batteries. Finally, the growth in the market (effective learning-by-doing) and an increased diversity of chemistries will expand and change the dynamics of the supply chain for batteries, resulting in cheaper inputs to the battery pack (Mann et al., 2022).

The three scenarios for technology innovation are as follows:

  • Conservative Technology Innovation Scenario (Conservative Scenario): The conservative projection consists of the maximum projection in 2025 and 2030 from the cost projections in the literature review (Cole and Karmakar, 2023). Defining the points in 2050 is more challenging because the projections with the least cost reduction extend only to 2030. The projection with the smallest relative cost decline after 2030 showed battery cost reductions of 5.8% from 2030 to 2050. This 5.8% is used from the 2030 point to define the conservative cost projection. In other words, the battery costs in the Conservative Scenario are assumed to decline by 5.8% from 2030 to 2050.
  • Moderate Technology Innovation Scenario (Moderate Scenario): The moderate projections are taken as the median point in 2025, 2030, and 2050 from the projections reviewed. The projections consistent with the median in 2030 do extend through 2050, which is why the median projection is also used for 2050.
  • Advanced Technology Innovation Scenario (Advanced Scenario): The advanced projections are taken as the lowest cost point in 2025, 2030, and 2050 from the projections reviewed. The lowest cost projections also extend through 2050, allowing the lowest cost projection to be used for 2050.

Scenario Assumptions

Scenario assumptions were derived using a literature review and are not based on learning curves or deployment projections.

For a 60-MW 4-hour battery, the technology innovation scenarios for utility-scale BESSs described above result in capital expenditures (CAPEX) reductions of 18% (Conservative Scenario), 37% (Moderate Scenario), and 52% (Advanced Scenario) between 2022 and 2035. The average annual reduction rates are 1.4% (Conservative Scenario), 2.9% (Moderate Scenario), and 4.0% (Advanced Scenario).

Between 2035 and 2050, the CAPEX reductions are 4% (0.3% per year average) for the Conservative Scenario, 22% (1.5% per year average) for the Moderate Scenario, and 31% (2.1% per year average) for the Advanced Scenario.


Projected Utility-Scale BESS Costs: Future cost projections for utility-scale BESSs are based on a synthesis of cost projections for 4-hour-duration systems as described by (Cole and Karmakar, 2023). The share of energy and power costs for batteries is assumed to be the same as that described in the Storage Futures Study (Augustine and Blair, 2021). The power and energy costs can be used to determine the costs for any duration of utility-scale BESS.

Capital Expenditures (CAPEX)

Definition: The bottom-up cost model documented by (Ramasamy et al., 2022) contains detailed cost components for battery-only systems costs (as well as batteries combined with photovoltaics [PV]). Though the battery pack is a significant cost portion, it is a minority of the cost of the battery system. The costs for a 4-hour utility-scale stand-alone battery are detailed in Figure 1.

Figure 1. Cost details for utility-scale storage (4-hour duration, 240-megawatt hour [MWh] usable) 

Current Year (2022): The 2022 cost breakdown for the 2024 ATB is based on (Ramasamy et al., 2023) and is in 2022$.

Within the ATB Data spreadsheet, costs are separated into energy and power cost estimates, which allows capital costs to be calculated for durations other than 4 hours according to the following equation:

$$ \text{Total System Cost (\$/kW)} = \text{Battery Pack Cost (\$/kWh)} \times \text{Storage Duration (hr)} + \text{BOS Cost (\$/kW)} $$

For more information on the power versus energy cost breakdown, see (Cole and Karmakar, 2023). For items included in CAPEX, see the table below.

Components of CAPEX

Future Projections: Future cost projections for utility-scale BESSs are based on a synthesis of cost projections for 4-hour duration systems as described by Cole and Karmakar (Cole and Karmakar, 2023), which generally used the median of published cost estimates to develop a Moderate Technology Cost Scenario and the minimum values to develop an Advanced Technology Cost Scenario. However, because the battery pack cost is anticipated to fall more quickly than the other cost components (which is similar to the recent history of PV system costs), the battery pack cost reduction is taken from BloombergNEF (BNEF, 2019) and Frith (BNEF, 2020) and is reduced more quickly. This tends to make costs for longer-duration batteries (e.g., 10 hours) decrease more quickly and shorter-duration batteries (e.g., 2 hours) decrease less quickly into the future. All durations trend toward a common trajectory as battery pack costs decrease into the future. 

Operation and Maintenance (O&M) Costs

Base Year: (Cole and Karmakar, 2023) assume no variable O&M (VOM) costs. All operating costs are instead represented using fixed O&M (FOM) costs. The FOM costs include battery augmentation costs, which enables the system to operate at its rated capacity throughout its 15-year lifetime. FOM costs are estimated at 2.5% of the capital costs in $/kW. Items included in O&M are shown in the table below.

Components of O&M Costs

Future Years: In the 2024 ATB, the FOM costs and the VOM costs remain constant at the values listed above for all scenarios.

Capacity Factor

The cost and performance of the battery systems are based on an assumption of approximately one cycle per day. Therefore, a 4-hour device has an expected capacity factor of 16.7% (4/24 = 0.167), and a 2-hour device has an expected capacity factor of 8.3% (2/24 = 0.083). Degradation is a function of the usage rate of the model, and systems might need to be replaced at some point during the analysis period. We use the capacity factor for a 4-hour device as the default value for ATB because 4-hour durations are anticipated to be more typical in the utility-scale market.

Round-Trip Efficiency

Round-trip efficiency is the ratio of useful energy output to useful energy input. Based on Cole and Karmakar (Cole and Karmakar, 2023), the 2024 ATB assumes a round-trip efficiency of 85%.


The following references are specific to this page; for all references in this ATB, see References.

Augustine, Chad, and Nate Blair. “Energy Storage Futures Study: Storage Technology Modeling Input Data Report.” Golden, CO: National Renewable Energy Laboratory, 2021.

Ramasamy, Vignesh, Jarett Zuboy, Eric O’Shaughnessy, David Feldman, Jal Desai, Michael Woodhouse, Paul Basore, and Robert Margolis. “U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, With Minimum Sustainable Price Analysis: Q1 2022.” Golden, CO: National Renewable Energy Laboratory, 2022.

Ramasamy, Vignesh, Jarett Zuboy, Michael Woodhouse, Eric O’Shaughnessy, David Feldman, Jal Desai, Andy Walker, Robert Margolis, and Paul Basore. “U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, With Minimum Sustainable Price Analysis: Q1 2023.” Golden, CO: National Renewable Energy Laboratory, 2023.

Cole, Wesley, and Akash Karmakar. “Cost Projections for Utility-Scale Battery Storage: 2023 Update.” Golden, CO: National Renewable Energy Laboratory, 2023.

Mann, Margaret, Vicky Putsche, and Benjamin Sharger. “Grid Energy Storage: Supply Chain Deep Dive Assessment.” Washington, D.C.: U.S. Department of Energy, February 24, 2022.

BNEF. “2019 Long-Term Energy Storage Outlook.” BloombergNEF, July 31, 2019.

BNEF. “Energy Storage System Costs Survey 2020.” Bloomberg New Energy Finance, December 16, 2020.

Issue Type
Problem Text