Lazards Levelized Cost of Storage Analysis 1.0

CONFIDENTIAL
LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0
NOVEMBER 2015
Introduction
Lazards Levelized Cost of Storage Analysis (LCOS) addresses the following topics:
Definition of a cost-oriented approach to energy storage technologies and applications
Description of selected energy storage technologies

Description of ten defined use cases for energy storage
Comparative levelized cost of storage for a number of use case and technology combinations
Decomposition of the levelized cost of storage for various use case and technology combinations by total capital cost,
operations and maintenance expense, charging cost and tax, as applicable

Comparison and analysis of capital costs for various use case and technology combinations, including in respect of
projected/expected capital cost declines

Summary assumptions for the various use case and technology combinations examined
Energy storage systems are be rated in terms of both instantaneous power capacity and potential energy output (or usable energy). The instantaneous
power capacity of an energy storage system is defined as the maximum output of the invertor (in MW, kW, etc.) under specific operational and physical
conditions. The potential energy output of an energy storage system is defined as the maximum amount of energy (in MWh, kWh, etc.) the system can
store at one point in time. Both capital cost divided by instantaneous power capacity and capital cost divided by potential energy output are common
Industry conventions for cost quoting. This study describes capital costs in terms of potential energy output to capture the duration of the relevant
energy storage system, as well as its capacity.
Throughout this study, use cases require fixed potential energy output values. Due to physical and operating conditions, some energy storage systems
may need to be oversized on a usable energy basis to achieve these values. This oversizing results in depth of discharge over a single cycle that is less
than 100% (i.e., some technologies must maintain a constant charge).
Other factors not covered in this report would also have a potentially significant effect on the results presented herein, but have not been examined in the
scope of this current analysis. The analysis also does not address potential social and environmental externalities, including, for example, the long-term
residual and societal consequences of various conventional generation technologies (for which energy storage is a partial substitute) that are difficult to
measure (e.g., nuclear waste disposal, environmental impacts, etc.).
While energy storage is a beneficiary of and sensitive to various tax subsidies, this report presents the LCOS on an unsubsidized basis to isolate and
compare the technological and operational components of energy storage systems and use cases, as well as to present results that are applicable to a
global energy storage market.
The inputs contained in the LCOS were developed by Lazard in consultation and partnership with Enovation Partners, a leading consultant to the Power
& Energy Industry.
Note: This study has been prepared by Lazard for general informational purposes only, and it is not intended to be, and should not be construed as, financial or other advice.
Copyright 2015 Lazard.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of Lazard.
What is Lazards Levelized Cost of Storage Analysis?

Lazards Levelized Cost of Storage study analyzes the levelized costs associated with the leading energy storage technologies
given a single assumed capital structure and cost of capital, and appropriate operational and cost assumptions derived from a
robust survey of Industry participants
The LCOS does not purport to measure the value associated with energy storage to Industry participants, as such value is
necessarily situation-, market- and owner-dependent and belies this cost-oriented and levelized analysis
WHAT THE LCOS DOES
WHAT THE LCOS DOES NOT DO
Defines operational parameters associated with systems

designed for each of the most prevalent use cases of storage
Identify the full range of use cases for energy storage,

including stacked use cases (i.e., those in which multiple
value streams are obtainable from a single storage installation)
Aggregates cost and operational survey data from original

equipment manufacturers and energy storage developers,
after validation from additional Industry participants/energy
storage users
Identifies an illustrative base case conventional alternative
to each use case for energy storage, while acknowledging that
in some use cases there is no conventional alternative (or such
comparison may be only partially apt)
Generates estimates of the installed cost over the indicated
project life required to achieve certain levelized returns for
various technologies, designed for a series of identified use
cases
Provides an apples-to-apples basis of comparison among
various technologies within use cases
Identifies a potential framework for evaluating energy storage
against certain base case conventional alternatives within
use cases
Aggregates robust survey data to define range of
future/expected capital cost decreases by technology
Authoritatively establish or predict market clearing prices for

energy storage projects/products
Propose that energy storage technologies be compared solely
against a single conventional alternative
Analyze the value of storage in any particular market
context or to specific individuals/entities
Purport to provide an apples-to-apples comparison to
conventional or renewable electric generation
Establish an authoritative framework for resource planning or
decision-making
2
The Energy Storage Value PropositionA Cost Approach

Understanding the economics of energy storage is challenging due to the highly tailored nature of potential value streams
associated with an energy storage installation. Rather than focusing on the value available to energy storage installations, this
study analyzes the levelized cost of energy storage technologies operationalized across a variety of use cases; the levelized cost
of storage may then be compared to the more specific value streams available to particular installations
ENERGY STORAGE VALUE PROPOSITION
SELECTED OBSERVATIONS
While an energy storage system may be optimized for a
System Cost &

Revenue
particular use case requiring specified operating parameters

(e.g., power rating, duration, etc.), other sources of revenue
may also be available for a given system
Value
Positive
For example, a single energy storage system could
theoretically be designed to capture value through both

providing frequency regulation for a wholesale market
and enabling deferral of an investment in a substation
upgrade
Energy storage systems are sized and developed to solve for
one or more($113.70)
specific revenue streams, as the operating
requirements of one use case may preclude
efficient/economic operations in another use case for the
same system (e.g., frequency regulation vs. PV integration)
Value
Negative
The total of all potential value streams available for a given
system thus defines the maximum, economically viable cost

for that system
LCOS
Value
Stream
1
Value
Stream
2
(a)
Value
Stream
3
Value
Stream
4
Total Value(a)
Importantly, incremental sources of revenue may only
become available as costs (or elements of levelized cost)

decrease below a certain value
Presented here as the simple sum of all available value streams. Due to operational and other factors, such stacked value would likely differ from the simple sum of all value
streams in practice.
Overview of Selected Energy Storage Technologies
There are a wide variety of energy storage technologies currently available and in development; some technologies are better
suited to particular use cases or other operational requirements (e.g., geological considerations for compressed air, heat
considerations for lithium-ion and sodium, etc.) than competing technologies
COMPRESSED AIR
DESCRIPTION
Compressed Air Energy Storage (CAES) uses electricity to compress air into confined spaces (e.g., underground mines, salt caverns,
etc.) where the pressurized air is stored
EXPECTED
USEFUL LIFE(a)
15 20 years
When required, this pressurized air is released to drive the compressor of a natural gas turbine
Flow batteries contain two electrolyte solutions in two separate tanks, circulated through two independent loops; when connected to a
FLOW BATTERY
load, the migration of electrons from the negative to positive electrolyte solution creates a current
The sub-categories of flow batteries are defined by the chemical composition of the electrolyte solution; the most prevalent of such
15 20 years
solutions are vanadium redox and zinc-bromine

Flywheels are mechanical devices that spin at high speeds, storing electricity as rotational energy, which is released by decelerating the
FLYWHEEL
flywheels rotor, releasing quick bursts of energy (i.e., high power and short duration)
Flywheels typically have a low energy density and high power ratingsthey release large amounts of power over a short period (i.e.,
20+ years
minutes); typically, maintenance is minimal and lifespans are greater than most battery technologies
Lead-acid batteries were invented in the 19th century and are the oldest and most common batteries; they are low-cost and adaptable to
LEAD-ACID
numerous uses (e.g., electric vehicles, off-grid power systems, uninterruptible power supplies, etc.)
Advanced lead-acid battery technology combines standard lead-acid battery technology with ultra-capacitors; these technologies
5 15 years
increase efficiency and lifetimes and improve partial state-of-charge operability(b)

Lithium-ion batteries are relatively established and have historically been used in the electronics and advanced transportation industries
LITHIUM-ION
Lithium-ion batteries are increasingly replacing lead-acid batteries in many applications; they have relatively high energy density, low
5 15 years
self-discharge and high charging efficiency

PUMPED HYDRO
SODIUM
Pumped hydro storage makes use of two vertically separated water reservoirs, using low cost electricity to pump water from the lower
to the higher reservoir and running as a conventional hydro power plant during high electricity cost periods
Sodium batteries are classified as high temperature and liquid-electrolyte-flow batteries, which have high power and energy density
relative to alternatives (e.g., lead-acid); they are maintained at a temperature of 300 350C
20+ years
5 15 years
Zinc batteries cover a wide range of possible technology variations, including metal-air derivatives
ZINC
Zinc battery systems are non-toxic, non-combustible and potentially low-cost due to the abundance of the primary metal; however,
5 15 years
this technology remains unproven in widespread commercial deployment

Source:
4
(a)
(b)
Lazard estimates.
Denotes battery technology.
Indicates general ranges of useful economic life for a given family of technology. Useful life will vary in practice depending on sub-technology, intensity of use/cycling, engineering factors, etc.
Advanced lead-acid is an emerging technology with wider potential applications and greater cost than traditional lead-acid batteries.
Overview of Selected Energy Storage Technologies (contd)

There are a wide variety of energy storage technologies currently available and in development; some technologies are better
suited to particular use cases or other operational requirements (e.g., geological considerations for compressed air, heat
considerations for lithium-ion and sodium, etc.) than competing technologies
SELECTED COMPARATIVE ADVANTAGES
Requires suitable geology
Low cost, flexible sizing, relatively large-scale
Relatively difficult to modularize for smaller installations
COMPRESSED
Mature technology and well-developed design
AIR
Low energy density
Leverages existing gas turbine technologies
FLOW
BATTERY
FLYWHEEL
LEAD-ACID
LITHIUMION
Reduced efficiency due to rapid charge/discharge
High power density, scalability and depth of discharge capability
Relatively low energy capacity
Compact design with integrated AC motor
High heat generation
Mature technology with established recycling infrastructure
Poor ability to operate in a partially charged state
Advanced lead-acid technologies leverage existing technologies
Relatively poor depth of discharge and short lifespan
Multiple chemistries available (partly as a result of robust deployment

in electric vehicles)
Remains relatively high cost
High power capacity solution
ZINC
Relatively high balance of system costs
No degradation in energy storage capacity
Mature technology (commercially available; leverages existing

hydropower technology)
SODIUM
Exposure to natural gas price changes
Power and energy profiles highly and independently scalable
Efficient power and energy density
PUMPED
HYDRO
SELECTED COMPARATIVE DISADVANTAGES
Requires advanced manufacturing capabilities to achieve high performance
Relatively low energy density

Limited available sites (i.e., water availability required)
Relatively mature technology (commercially available)
Although mature, inherently higher costs
High energy capacity; long duration
Operates at high temperature, resulting in potential flammability issues
Currently quoted as low cost
Currently unproven commercially
Source:
DOE Energy Storage Database; Lazard estimates.

Denotes battery technology.

Selected Energy Storage Use CasesIn Front of the Meter

Unlike technologies related to conventional generation, which have a single use case (i.e., the creation of electricity), energy storage
technologies have a variety of use cases in a modern electric system, comprising both in front of the meter (or power grid-oriented) and
behind the meter (or distributed) applications; each use case identified below solves for a particular grid or user need, which is often
most easily achieved with a subset of available energy storage technologies
Importantly, in practice, a single energy storage system may provide services across multiple use cases, although the feasibility of
multiple application energy storage units may be limited by operational and design factors (e.g., sizing for a particular use case could
preclude participation in another)
SELECTE D RELEVA NT
TECHNOLOG IE S
DESCRIP TIO N
TRANSMISSION
SYSTEM
Large-scale energy storage system to improve Lead-Acid, Sodium, Flow

transmission grid performance and assist in the
Battery, Lithium-Ion, Zinc,
integration of large-scale renewable generation
Pumped Hydro, CAES
Transmission line upgrade

Gas turbine
PEAKER
REPLACEMENT
Large-scale energy storage system designed to

replace peaking gas turbine facilities
Gas turbine
Diesel reciprocating engine
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
PV INTEGRATION
SELECTE D
CONVENTIO N A L
ALTERN A T I VE S ( a )
(a)
Lead-Acid, Sodium, Zinc,

Lithium-Ion, Flow Battery
Energy storage system designed to balance

Flywheel, Lithium
power to maintain frequency within a specified
tolerance bound (i.e., ancillary service)
Gas turbine
Energy storage system placed at substations to

provide flexible peaking capacity and mitigate
stability problems
Distribution system upgrade

Gas turbine

Energy storage system designed to reduce

potential integration challenges or improve the
value of solar generation
Gas turbine
Alteration of solar
production profile
Denotes an illustrative set of base case conventional alternatives for a given use case. Actual projects may displace a number of conventional alternatives, in certain scenarios.

Selected Energy Storage Use CasesBehind the Meter

Unlike technologies related to conventional generation, which have a single use case (i.e., the creation of electricity), energy storage
technologies have a variety of use cases in a modern electric system, comprising both in front of the meter (or power grid-oriented) and
behind the meter (or distributed) applications; each of the use cases identified below solves for a particular grid or user need, which is
often most easily achieved with a subset of available energy storage technologies
Importantly, in practice, a single energy storage system may provide services across multiple use cases, although the feasibility of
multiple application energy storage units may be limited by operational and design factors (e.g., sizing for a particular use case could
preclude participation in another)
DESCRIP TIO N
Energy storage system used to enhance the stability and Lead-Acid, Sodium, Zinc,
efficiency of a microgrid electricity system with specific
local goals, such as reliability, diversification of energy
sources and/or cost reduction, especially in the context
of ramp control/mitigation (i.e., relatively short
discharge profile)

Gas turbine
Load profile alteration
Energy storage system used to support the stability and

efficiency of an isolated electricity system with specific
local goals, such as reliability, diversification of energy
sources and/or cost reduction, especially in the context
of renewables integration (i.e., long discharge profile)


Gas turbine
COMMERCIAL &
INDUSTRIAL
Energy storage system primarily designed to provide

peak shaving and demand charge reduction for
commercial or industrial applications

COMMERCIAL
APPLIANCE
Energy storage system designed to provide demand

charge reductions on a smaller scale and at a lower
duration than commercial and industrial use cases
Lead-Acid, Zinc, LithiumIon, Flow Battery

Utility service upgrade
RESIDENTIAL
Energy storage system for residential home use

designed to provide backup power and self-generation
augmentation
Lead-Acid, Lithium-Ion,
Flow Battery

Backup generator
MICROGRID
ISLAND GRID
SELECTE D
CONVENTIO N A L
ALTERN A T I VE S ( a )
SELECTE D RELEVA NT
TECHNOLOG IE S
(a)

Gas turbine
Utility service upgrade
Denotes an illustrative set of base case conventional alternatives for a given use case. Actual projects may displace a number of conventional alternatives, in certain scenarios.

Energy Storage Use CasesOperational Parameters

For comparison purposes, this study assumes and quantitatively operationalizes ten use cases for energy storage; while there
may be alternative or combined/stacked use cases available to energy storage systems, the ten use cases below represent
prevalent current and contemplated energy storage applications and are derived from Industry survey data
PROJECT
LIFE (YEARS)
MW(a)
MWh OF
CAPACITY(b)
100% DOD
CYCLES/
DAY(c)
DAYS /
YEAR(d)
ANNUAL
MWh
PROJECT
MWh
TRANSMISSION SYSTEM
20
100
800
300
240,000
4,800,000
PEAKER
REPLACEMENT
20
25
100
350
35,000
700,000
FREQUENCY
REGULATION
20
10
4.8
350
8,400
168,000
DISTRIBUTION
SERVICES
20
16
300
4,800
96,000
PV
INTEGRATION
20
1.25
350
1,750
35,000
MICROGRID
20
350
1,400
28,000
ISLAND
GRID
20
350
2,100
42,000
COMMERCIAL &
INDUSTRIAL
10
350
1,400
14,000
COMMERCIAL
APPLIANCE
10
0.1
0.2
250
50
500
RESIDENTIAL
10
0.005
0.01
300
30
= Usable Energy(e)
(a)
(b)
(c)
8
(d)
(e)
Indicates power rating of system (i.e., system size).

Indicates total battery energy content on a single, 100% charge, or usable energy. Usable energy divided by power rating (in MW) reflects hourly duration of system.
DOD denotes depth of battery discharge (i.e., the percent of the batterys energy content that is discharged). Depth of discharge of 100% indicates that a fully charged battery discharges all of its
energy. For example, a battery that cycles 48 times per day with a 10% depth of discharge would be rated at 4.8 100% DOD Cycles per Day.
Indicates number of days of system operation per calendar year.
Usable energy indicates energy stored and able to be dispatched from system.
Unsubsidized Levelized Cost of Storage Comparison
Certain in front of the meter technology and use case combinations are cost-competitive with their dominant or base case
conventional alternatives under some scenarios, even without the benefit of subsidies or additional, non-optimized streams of
revenue; such observation does not take into account potential social or environmental externalities associated with energy
storage (e.g., environmental benefits associated with avoided gas peaker investment, etc.)
Compressed Air
TRANSMISSION
SYSTEM
$192
Flow Battery
Lead-Acid
Lithium-Ion
Pumped Hydro
$290
$892
$461
$347
$188
$396
$230
Flow Battery
PEAKER
REPLACEMENT
Lead-Acid
$927
$419
$221
$347
$211
Lithium-Ion
Sodium
Zinc
Lithium-Ion
Sodium
Zinc
$275
(a)
$1,692
$400
$789
$426
$285
$1,129
$426
$373
$950
$402
$1,068
$355
$686
$379
$245
$957
$345
$200
$165 $218 Gas
$923
$516
$0
Source:
Note:
$989
$288
Flow Battery
PV INTEGRATION
$948
$276
Lead-Acid
$658
$365
Flywheel
Lead-Acid
$1,247
$321
Sodium
Flow Battery
DISTRIBUTION
SERVICES
$376
Lithium-Ion
Lithium-Ion
$1,079
$248
Zinc
FREQUENCY
REGULATION
$739
$274
Sodium
Zinc
$1,429
$400
Peaker(a)
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
Levelized Cost ($/MWh)
Lazard estimates.
Here and throughout this presentation, unless otherwise indicated, analysis assumes 20% debt at 8% interest rate and 80% equity at 12% cost for all technologies and use cases. Assumes seven year
MACRS depreciation unless otherwise noted. Analysis does not reflect impact of evolving regulations/rules promulgated pursuant to the EPAs Clean Power Plan.
Indicates battery technology.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives). The lowest cost
conventional alternative for a particular use case may not be the lowest cost conventional alternative for another use case.
Unsubsidized Levelized Cost of Storage Comparison (contd)

While no behind the meter technology and use case combination is strictly in the money from a cost perspective as compared to an
illustrative conventional alternative, a number of combinations are within striking distance and, when paired with certain streams of
value, may currently be economic for certain system owners in some scenarios; such observation does not take into account the social and
environmental externalities associated with energy storage (e.g., the social costs of demand charge shaving, etc.)
MICROGRID
Flow Battery
$429
Lead-Acid
$433
Lithium-Ion
Sodium
$1,046
$946
$369
$562
$411
Zinc
$835
$319
$416
Flow Battery
Lead-Acid
ISLAND
Lithium-Ion
Sodium
Zinc
Flow
$1,533
$581
$870
$663
$1,259
$523
$677
$349
$1,083
$529
Lithium-Ion
Sodium
$1,231
$700
Battery
Lead-Acid
COMMERCIAL &
INDUSTRIAL
$593
$1,511
$351
$838
$444
Zinc
$310
$1,092
$452
Flow Battery
COMMERCIAL
APPLIANCE
Lead-Acid
Lithium-Ion
Zinc
$974
$928
RESIDENTIAL
Lead-Acid
Lithium-Ion
$833
$721
$1,657
$1,101
$2,238
$1,034
$200
$400
$212 $281 Diesel

Reciprocating Engine(a)
10
$1,363
$661
$0
Source:
(a)
$2,291
$784
Flow Battery
$1,504
$600
$800
$1,000
$1,596
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Lazard estimates.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives). The lowest cost conventional
alternative for a particular use case may not be the lowest cost conventional alternative for another use case.
Levelized Cost of Storage ComponentsLow End

While each use case requires different operating parameters and each technology optimizes into these parameters differently according to
its relative strengths and challenges, a key factor regarding the long-term competitiveness of energy storage across all use case and
technology combinations is the ability of technological development and increased production volumes to materially lower the capital
costs of certain energy storage technologies, and their levelized cost of energy, over time
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
$79
$15
$88
$166
$13
$98
PEAKER
REPLACEMENT
Flow Battery
Sodium
Zinc
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
$132
$11
$14
$106
$70
$13
$38
$75
$31
$92
$23
$166
$58
$20
$75
$23
$50
$253
$229
$134
$0
$39
$18
$74
Capital
$200
$48
$516
$400
$37
$426
$285
$77
$32
$70
$38
$80
$43
$227
$65
$45
$217
$365
$288
$36
$264
$419
$14 $211
$340
Flow Battery
Zinc
$66
$321
$20 $276
$261
Sodium
$29
$17 $221
$15
Lithium-Ion
Lithium-Ion
$61
$89
$79
$158
$396
$19 $248
$45
$19
Lead-Acid
Lead-Acid
$86
$36
$149
$35
$18 $230
$221
Battery
Zinc
$70
$27
$120
$461
$347
$75
$270
$43
$13 $188
$204
$66
$32
$41
$14
Lithium-Ion
Sodium
PV INTEGRATION
$68
$127
Flywheel
Flow
$290
$61
$245
Lead-Acid
Lithium-Ion
$29
$9
Sodium
$24
$50
$225
Pumped Hydro
Zinc
$86
$302
$10 $192
$29
$69
$64
$33
$79
$373
$36
$402
$355
$32
$379
$19 $245
O&M
Charging/ Discharging
$400
Taxes
$600
11
Source:
Lazard estimates.
Levelized Cost of Storage ComponentsLow End (contd)

A notable exception to the general theme of high capital cost components of levelized cost is the island use case, where high absolute
costs of local electricity (e.g., fuel oil, diesel, renewables, etc.) result in materially greater charging costs as a percentage of LCOS
Flow Battery
Lead-Acid
MICROGRID
Lithium-Ion
Sodium
Zinc
Flow Battery
Lead-Acid
ISLAND
Lithium-Ion
Sodium
Zinc
Flow Battery
COMMERCIAL
INDUSTRIAL
Lead-Acid
Zinc
COMMERCIAL
APPLIANCE
Lead-Acid
Lithium-Ion
Zinc
Lead-Acid
Lithium-Ion
$185
$139
$27
$125
$18
$127
$11
$159
$27 $369
$27 $411
$17 $319
$19 $593
$437
$47
$213
$29
$215
$36
$182
$333
$31 $581
$381
$121
$34 $349
$341
$210
$47
$17
$264
$93
$98
$92
$50
$105
$39 $444
$26 $310
$613
$87
$601
$64
$390
$50
$358
$150
$104
$86
$75
$721
$164
$132
$400
$600
O&M
$928
$784
$146
$637
$200
$99
$974
$661
$672
Lazard estimates.
$70
$115
$140
$130
$184
Capital
Source:
$159
$88
$504
$0
12
$529
$31 $351
$36
$17
$30 $663
$19 $523
$356
$12
$40 $700
$308
$16
$169
$30 $433
$172
$280
$132
$22 $429
$149
Flow Battery
RESIDENTIAL
$23
Sodium
$189
$37
$181
$40
$216
Lithium-Ion
Flow Battery
$178
$152
$800
Charging
$118
$113
$1,000
$1,101
$1,034
$1,200
Taxes

Levelized Cost of Storage ComponentsHigh End
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
$79 $15$88 $10 $192

$576
Sodium
Zinc
Flow Battery
Lead-Acid
Lithium-Ion
Sodium
$545
DISTRIBUTION
SERVICES
$220
$125
$137
$479
$44 $62 $73
Sodium
$91
$97
$927
$66
$127
$108
$74
$90
$595
$93
$948
$86
$98
$989
$136
$97
$96
$923
$1,181
$580
$283
$55 $66 $87
$132
$655
$109
$731
$497
$194
$0
$85
$160
$49 $66 $75

$674
$159
$1,692
$79
$112
$1,129
$53 $84 $36 $426
$69
$789
$806
$253
$1,247
$28 $79$20 $275
Sodium
Zinc
$1,079
$41 $78 $28 $347
Lithium-Ion
Lithium-Ion
$1,429
$658
$673
$200
$149
$108
$189
$716
$74
$865
Lead-Acid
Lead-Acid
$147
$46 $79 $31 $376

$602
Zinc
PV INTEGRATION
$66
$739
$773
Lithium-Ion
Flow Battery
$892
$219
$50 $62 $82
Flywheel
Flow Battery
$93
$145 $42 $68$19 $274
Zinc
FREQUENCY
REGULATION
$91
$997
Pumped Hydro
PEAKER
REPLACEMENT
$132
$102
$69
$950
$108
$1,068
$686
$110
$78
$94
$957
$40 $83 $28 $345
$200
$400
$600
Capital
$800
O&M
$1,000
$1,200
Charging/ Discharging
$1,400
$1,600
$1,800
Taxes
13
Source:
Lazard estimates.
Levelized Cost of Storage ComponentsHigh End (contd)
A notable exception to the general theme of high capital cost components of levelized cost is the island use case, where high absolute
costs of local electricity (e.g., fuel oil, diesel, renewables) result in materially greater charging costs as a percentage of LCOS
Flow Battery
Lead-Acid
MICROGRID
$606
$595
Lithium-Ion
$336
Sodium
Zinc
ISLAND
Lithium-Ion
Sodium
Zinc
Flow
COMMERCIAL
INDUSTRIAL
Lead-Acid
Lithium-Ion
Sodium
Zinc
$65
$624
$450
Lithium-Ion
Zinc
$45
RESIDENTIAL
Lead-Acid
Lithium-Ion
$206
$80 $835
$406
$313
$44
$397
$94
$129
$1,533
$1,259
$30 $677
$100 $112
$128
$1,083
$1,082
$618
$184
$45 $87 $88
$772
$261
$1,231
$335
$377
$92
$153
$1,511
$838
$106 $103 $110
$1,092
$43 $110$39 $452

$1,010
$141
$170
$183
$1,504
$1,632
$278
$991
$497
$87 $132
$83
$168
$152
$1,111
$146
$225
$175
$600
Lazard estimates.
$2,291
$1,657
$305
$1,107
$400
$240
$1,363
$1,532
$200
$140
$85 $833
$154
$800
$1,000
Capital
Source:
$97
$62 $870
$742
$0
14
$946
$110
Flow Battery
$1,046
$193
$677
Lead-Acid
$171
$104
Flow Battery
COMMERCIAL
APPLIANCE
$93
$876
$151
$97
$178 $37 $177 $24 $416
Battery
$206
$31 $143 $52 $562
Flow Battery
Lead-Acid
$107
$520
$138
$1,200
O&M
$157
$1,400
Charging
$178
$164
$236
$2,238
$1,596
$1,600
$1,800
$2,000
$2,200
$2,400
Taxes

Capital Cost Comparison

While capital costs of certain energy storage technology and use case combinations are currently high relative to selected conventional
alternatives and, in some cases, more established energy storage technologies (e.g., pumped hydro, compressed air, etc.), capital costs
must be considered along with a number of other factors that impact the levelized cost of energy storage (e.g., energy density, cycling
capability, etc.)
Compressed Air
Flow Battery
TRANSMISSION
SYSTEM
Lead-Acid
Lithium-Ion
$171
$324
Zinc
$213
$449
(a)
Flow Battery
PEAKER
REPLACEMENT
Lead-Acid
Lithium-Ion
Sodium
Zinc
FREQUENCY
REGULATION
Lithium-Ion
Lead-Acid
Lithium-Ion
Sodium
$414
$1,182
$576
$1,960
$446
$1,098
$472
(a)
$1,391
$258
$437
$1,200
$307
$627
$304
$477
$1,387
$682
$2,072
$622
$1,425
$611
(a)
$0
(a)
$1,434
$662
Lithium-Ion
Source:
Note:
$1,145
$483
(a)
Lead-Acid
$2,542
$492
$1,720
$1,003
Zinc
$3,000+
$1,800
Flow Battery
Sodium
15
$234
Flywheel
Zinc
PV INTEGRATION
$1,367
$297
Flow Battery
DISTRIBUTION
SERVICES
$1,075
$313
$1,937
$422
Pumped Hydro
Sodium
$970
$553
$359
$1,751
$532
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Capital Cost ($/kWh)
Lazard estimates.
Capital cost information presented on this page as the sum of AC and DC capital costs per kWh of usable energy. Figures as presented on this page exclude assumed EPC and administrative costs
(assumed to be 15% of AC and DC capital costs).
Zinc technologies are not currently widely commercially deployed. Capital costs are likely lower than other energy storage technologies due to survey participants willingness to incorporate possible future
capital cost decreases into current quotes/estimates.

Capital Cost Comparison (contd)

While capital costs of certain energy storage technology and use case combinations are currently high relative to selected conventional
alternatives and, in some cases, more established energy storage technologies (e.g., pumped hydro, compressed air, etc.), capital costs
must be considered along with a number of other factors that impact the levelized cost of energy storage (e.g., energy density, cycling
capability, etc.)
Flow Battery
Lead-Acid
MICROGRID
$659
$650
(a)
Battery
Lithium-Ion
$476
Sodium
$466
$611
(a)
Flow Battery
COMMERCIAL
INDUSTRIAL
Lithium-Ion
Sodium
Zinc
COMMERCIAL
APPLIANCE
Flow Battery
Lead-Acid
Lithium-Ion
Zinc
Flow Battery
Lead-Acid
Lithium-Ion
RESIDENTIAL
(a)
16
$1,418
$288
$461
$1,081
$2,021
$386
$1,149
$487
$309
$1,438
$481
$649
$1,060
$764
$2,148
$634
$482
$1,286
$625
$500
$1,604
$1,004
$2,388
$946
$0
Source:
Note:
$1,128
$631
(a)
$2,001
$311
(a)
$784
$1,061
$1,601
$291
Lead-Acid
Lead-Acid
$2,184
$1,312
$540
Zinc
$2,400
$934
Sodium
Zinc
ISLAND
$859
Lithium-Ion
Flow
$500
$1,700
$1,000
$1,500
$2,000
$2,500
$3,000
Lazard estimates.
Capital cost information presented on this page as the sum of AC and DC capital costs per kWh of usable energy. Figures as presented on this page exclude assumed EPC and administrative costs
(assumed to be 15% of AC and DC capital costs).
Zinc technologies are not currently widely commercially deployed. Capital costs are likely lower than other energy storage technologies due to survey participants willingness to incorporate possible
future capital cost decreases into current quotes/estimates.

Industry Estimated Capital Cost Outlook

Survey results indicate that Industry participants expect significant capital cost declines for the selected energy storage technologies over
the next five years, driven primarily by increased manufacturing scale and design/engineering improvements
Lead-Acid
Lithium-Ion
SLOW
MEDIAN
FAST
CAGR
(3%)
(9%)
(16%)
Improved manufacturing and design
5-YEAR
(14%)
(38%)
(58%)
Integration time for manufacturing

Reduction in required high cost materials
Improvement in control and response time
Improvements in operation sustainability (e.g., ability
1,000
500
LIKELY DRIVERS
5,300
CAGR
(1%)
(2%)
(12%)
5-YEAR
(5%)
(10%)
(47%)
CAGR
(1%)
(5%)
(16%)
5-YEAR
(5%)
(24%)
(58%)
CAGR
(2%)
(12%)
(13%)
5-YEAR
(10%)
(47%)
(50%)
300
2,150
1,150
150
1,150
650
150
450
Zinc
Flywheel(a)
Flow Battery
PROJECTED CAPIT AL COST DECREA S E S
350
CAGR
0%
(1%)
(7%)
250
5-YEAR
0%
(5%)
(30%)
Reduction in required high cost materials and scale
to remove heat, higher efficiency motor/generator,

etc.)
Engineering/design improvements (e.g., additives to
increase usable energy and capability envelope)

Reduction in lead requirement
Increased manufacturing scale (e.g., Gigafactory)

Reduction in required high cost materials
Improvements in battery chemistry/design
Cost reduction depends on manufacturing at scale
Design improvement to reduce high cost sub-
components
Chemistry improvements will increase lifespan and
range of operation
150
2016
2017
2018
Source:
Note:
17
(a)
(b)
2019
2020
Lazard estimates.
Capital cost information presented on this page represents DC capital costs per kWh of usable energy, unless otherwise indicated.
Capital costs represent total capital costs, excluding EPC and administrative capital costs.
Expected capital cost declines are somewhat muted for Zinc, likely due to zinc manufacturers/developers building expected cost declines into current quotes and the absence of meaningful market
validators to such quotes.
Impact AnalysisCapital Cost Decline on Levelized Cost of Storage

Assuming that the Energy Storage Industrys capital cost decline expectations materialize, levelized costs of storage could decrease
materially for some use case and technology combinations(a); importantly, expected decreases in the levelized cost of storage are functions
of the magnitude of capital cost decreases expected, as well as the relative weight of DC capital costs vs. balance of system and other costs
TRANSMISSION
SYSTEM
Flow Battery
Battery
Flow
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
$217
$220
$230
$222
$248
$196
Zinc
Zinc
PEAKER
REPLACEMENT
FREQUENCY
REGULATION
DISTRIBUTION
SERVICES
PV
INTEGRATION
$290
Flow Battery
Battery
Flow
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
$369
$347
$340
$321
$461
Lithium-Ion
Lithium-Ion
Flow Battery
Flow Battery
Lead-Acid
Lead-Ion
Lithium-Ion
Lithium-Ion
Zinc
Zinc
Flow
Battery
Flow Battery
Lead-Acid
Lead-Acid
Lithium-Ion
Lithium-Ion
Zinc
Zinc
$0
$200
$165 $218 Gas
$400
Peaker(c)
$927
$619
$419
$1,247
$970
$658
$898
$989
$923
$624
$1,692
$1,316
$789
$950
$642
$1,068
$842
$686
$600
$1,429
$1,104
$739
$427
$376
$362
$211
$389
$221
$347
$215
$335
$276
$257
$211
$275
$173
$207
$288
$227
$516
$418
$400
$260
$467
$285
$426
$276
$411
$373
$282
$402
$335
$355
$243
$418
$245
$345
$239
$334
Zinc
Zinc
Flywheel(b)
Flywheel
$892
$593
$800
$1,000
Five-year LCOS with Cost Declines
$1,200
$1,400
$1,600
$1,800
Current LCOS

Source:
(a)
(b)
(c)
18
Lazard estimates.
Assumes median five-year expected DC capital cost declines only, unless otherwise indicated.
Assumes median five-year expected total capital cost declines.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives).

Impact AnalysisCapital Cost Decline on Levelized Cost of Storage (contd)

Assuming that the Energy Storage Industrys capital cost decline expectations materialize, levelized costs of storage could decrease
materially for some technology and use case combinations(a); importantly, expected decreases in the levelized cost of storage are functions
of the magnitude of capital cost decreases expected, as well as the relative weight of DC capital costs vs. balance of system and other costs
Flow Battery
Battery
Flow
$429
$1,046
$364
$751
$433
$946
$380
$770
$369
$562
$291
$394
$319
$416
$314
$408
$593
$1,231
$541
$922
$700
$1,533
$617
$1,250
$581
$870
$462
$618
$523
$677
$515
$664
$349
$1,083
$280
$731
$529
$1,511
$436
$1,182
$351
$838
$252
$507
$310
$452
$302
$438
$974
$1,504
$770
$1,101
$928
$805
$784
$1,363
$605
$911
$661
$833
$648
$812
$721
$1,657
$712
$1,254
$1,101
$992
$1,034
$1,596
$846
$1,135
Lead
Lead
MICROGRID
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
Lead
Lead
ISLAND
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
COMMERCIAL &
INDUSTRIAL
Lead
Lead
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
COMMERCIAL
APPLIANCE
Lead
Lead
Lithium
Lithium
Zinc
Zinc
Flow Battery
Battery
Flow
RESIDENTIAL
Lead
Lead
Lithium
Lithium
$0
$200
$400
$212 $281 Diesel

Reciprocating Engine
19
Source:
(a)
(b)
Copyright 2015 Lazard. (c)
$600
$800
$1,000
$1,200
$1,400
Five-year LCOS with Capital Cost Declines
$1,600
$1,800
$2,291
$1,844
$2,238
$1,855
$2,000
$2,200
$2,400
Current LCOS
Lazard estimates.
Assumes median five-year expected DC capital cost declines only, unless otherwise indicated.
Assumes median five-year expected total capital cost declines.
Indicates illustrative conventional alternative to energy storage. Not intended to reflect the sole conventional alternative (or source of value from replacing such alternatives).
Levelized Cost of StorageKey Assumptions

Transmission
Units
Power Rating
Pumped HS
Zinc
CAES
Flow Battery
Lithium
Lead
Sodium
MW
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Duration
Hours
Usable Energy
MWh
800
800
800
800
800
800
800
800
800
800
800
800
800
800
100% Depth of Discharge Cycles/Day

Operating Days/Year
300
300
300
300
300
300
300
300
300
300
300
300
300
300
20
20
20
20
20
20
20
20
20
20
20
20
20
Project Life
Years
20
Memo: Annual Used Energy
MWh
240,000
Memo: Project Used Energy
MWh
4,800,000 4,800,000
Initial Capital CostDC
$/kWh
--
$211
$390
--
$300
$946
$399
$1,051
$529
$1,913
$425
$1,344
Initial Capital CostAC
$/kWh
--
$24
$24
--
$24
$24
$24
$24
$24
$24
$24
$24
Initial Other Owners Costs
$/kWh
$32
$47
$35
$62
$26
$26
$49
$145
$63
$161
$83
$291
$67
$205
Total Initial Installed Cost
$/kWh
$244
$359
$270
$476
$197
$197
$372
$1,115
$486
$1,236
$636
$2,227
$516
$1,573
Replacement Capital CostDC
$/kWh
After Year 5
$0
$0
$0
$0
$0
$0
$0
$317
$0
$0
$0
$0
$0
After Year 10
$0
$0
$130
$202
$0
$0
$105
$253
$209
$304
$333
$686
$269
After Year 15
$0
$0
$0
$0
$0
$0
$0
$222
$0
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$0
$0
$16
$16
$0
$0
$16
$16
$16
$16
$16
$16
$16
$16
Replacement Capital CostAC
240,000
240,000
240,000
4,800,000 4,800,000
240,000
240,000
4,800,000 4,800,000
240,000
240,000
4,800,000 4,800,000
240,000
240,000
4,800,000 4,800,000
240,000
240,000
4,800,000 4,800,000
240,000
240,000
4,800,000 4,800,000
$0
$1,033
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$2
$11
$4
$12
$4
$4
$3
$33
$7
$13
$13
$55
$10
$31
1.0%
3.0%
1.3%
2.5%
2.0%
2.0%
0.9%
3.0%
1.5%
1.0%
2.0%
2.5%
2.0%
2.0%
Investment Tax Credit
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Production Tax Credit
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
Charging Cost Escalator
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
Efficiency
82%
81%
80%
72%
75%
75%
65%
63%
93%
91%
86%
86%
75%
76%
$/MWh
$188
$274
$230
$376
$192
$192
$290
$892
$347
$739
$461
$1,429
$396
$1,079
O&M Cost
O&M % of Capex
Levelized Cost of Storage
Source: Lazard estimates.
20
Levelized Cost of StorageKey Assumptions (contd)

Peaker Replacement
Units
Power Rating
MW
Zinc
25
Lithium
25
25
Frequency Regulation
Flow Battery
25
25
25
Lead
25
Sodium
25
25
25
Duration
Hours
Usable Energy
MWh
100
100
100
100
100
100
100
100
100
100

Operating Days/Year
350
350
350
350
350
350
350
350
350
350
20
20
20
20
20
20
20
20
20
Project Life
Years
20
MWh
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
MWh
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
700,000
$/kWh
$211
$390
$399
$1,051
$250
$1,135
$529
$1,913
$425
$1,344
$/kWh
$47
$47
$47
$47
$47
$47
$47
$47
$47
$47
$/kWh
$39
$66
$67
$165
$45
$177
$86
$294
$71
$209
$/kWh
$297
$503
$513
$1,263
$342
$1,360
$663
$2,255
$543
$1,600
$/kWh
After Year 5
$0
$0
$0
$0
$0
$380
$0
$0
$0
After Year 10
$130
$202
$209
$304
$88
$304
$333
$686
$269
After Year 15
$0
$0
$0
$0
$0
$266
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$32
$32
$32
$32
$32
$32
$32
$32
$32
$32
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
O&M Cost
$0
$1,033
$/kWh
$/kWh
$4
$12
$8
$13
$3
$40
$13
$56
$11
$32
1.4%
2.4%
1.5%
1.0%
1.0%
3.0%
2.0%
2.5%
2.0%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$50
$50
$50
$50
$50
$50
$50
$50
$50
$50
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
80%
72%
93%
91%
65%
63%
86%
86%
75%
76%
$/MWh
$221
$347
$321
$658
$248
$927
$419
$1,247
$365
$948
O&M % of Capex

Efficiency
21

Frequency Regulation
Units
Power Rating
Lithium
Distribution Services
Flywheel
MW
10
10
10
10
Duration
Hours
0.5
0.5
0.5
0.5
Usable Energy
MWh

Operating Days/Year
4.8
4.8
4.8
4.8
350
350
350
350
Project Life
Years
20
20
20
20
MWh
8,400
8,400
8,400
8,400
MWh
168,000
168,000
$/kWh
$780
$1,300
$/kWh
$420
$420
$/kWh
$180
$258
$/kWh
$1,380
$/kWh
$1,978
168,000
168,000
---
$270
$1,296
$2,070
$9,933
After Year 5
$0
$0
$0
$0
After Year 10
$0
$0
$0
$0
After Year 15
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
After Year 10
$302
$302
$0
$0
After Year 15
$0
$0
$0
$0
$/kWh
$19
$40
$27
$129
O&M % of Capex
1.4%
2.0%
1.3%
1.3%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
Charging Cost
$/MWh
$66
$66
$66
$66
1.5%
1.5%
1.5%
1.5%
93%
93%
82%
85%
$/MWh
$211
$275
$276
$989
O&M Cost

Efficiency
$/kWh
22

Distribution Services
Units
Power Rating
MW
Zinc
4
Flow Battery
4
Lithium
4
Lead
4
Sodium
4
Duration
Hours
Usable Energy
MWh
16
16
16
16
16
16
16
16
16
16
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
1.0
Operating Days/Year
300
300
300
300
300
300
300
300
300
300
Project Life
Years
20
20
20
20
20
20
20
20
20
20
MWh
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
4,800
MWh
96,000
96,000
96,000
96,000
$/kWh
$247
$420
$250
$/kWh
$57
$57
$57
$/kWh
$46
$72
$46
$/kWh
$350
$549
$353
$1,154
$/kWh
After Year 5
$0
$0
$0
$317
$0
$0
$0
$0
$0
After Year 10
$153
$202
$79
$253
$209
$304
$333
$0
$269
$0
$0
$0
$222
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$38
$38
$38
$38
$38
$38
$38
$38
$38
$38
After Year 15
96,000
96,000
96,000
96,000
96,000
96,000
$946
$435
$1,088
$570
$2,485
$425
$1,377
$57
$57
$57
$57
$57
$57
$57
$150
$74
$172
$94
$381
$72
$215
$566
$1,316
$721
$2,924
$555
$1,649
$0
$1,033
$0
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$5
$14
$4
$34
$9
$14
$15
$73
$11
$33
O&M % of Capex
1.5%
2.5%
1.1%
3.0%
1.6%
1.1%
2.0%
2.5%
2.0%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$53
$53
$53
$53
$53
$53
$53
$53
$53
$53
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
1.5%
Efficiency
80%
72%
65%
63%
93%
91%
86%
86%
75%
76%
$/MWh
$285
$426
$288
$923
$400
$789
$516
$1,692
$426
$1,129
O&M Cost
23

PV Integration
Units
Power Rating
Zinc
Flow Battery
Lithium
Lead
Sodium
MW
Duration
Hours
Usable Energy
MWh
1.25
1.25
1.25
1.25
1.25
1.25
1.25
1.25
1.25
1.25
Operating Days/Year
350
350
350
350
350
350
350
350
350
350
20
20
20
20
20
20
20
20
20
20
1,750
Project Life
Years
MWh
1,750
1,750
1,750
1,750
1,750
1,750
1,750
1,750
1,750
MWh
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
$/kWh
$247
$420
$550
$1,275
$510
$1,313
$570
$1,960
$499
$1,639
$/kWh
$112
$112
$112
$112
$112
$112
$112
$112
$112
$112
$/kWh
$54
$80
$99
$208
$93
$214
$102
$311
$92
$263
$/kWh
$413
$612
$761
$1,595
$715
$1,638
$784
$2,383
$702
$2,014
$/kWh
After Year 5
$0
$0
$0
$788
$0
$0
$0
$0
$0
After Year 10
$153
$202
$0
$630
$245
$367
$333
$686
$316
After Year 15
$0
$0
$0
$551
$0
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$75
$75
$75
$75
$75
$75
$75
$75
$75
$75
$0
$1,229
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$7
$15
$19
$40
$12
$18
$16
$59
$14
$41
O&M % of Capex
1.6%
2.5%
2.5%
2.5%
1.6%
1.1%
2.0%
2.5%
2.1%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$58
$58
$58
$58
$58
$58
$58
$58
$58
$58
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Efficiency
80%
72%
76%
72%
93%
91%
86%
86%
75%
76%
$/MWh
$245
$345
$373
$950
$355
$686
$402
$1,068
$379
$957
O&M Cost
24

Microgrid
Units
Power Rating
Zinc
Lithium
Flow Battery
Lead
Sodium
MW
Duration
Hours
Usable Energy
MWh
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
Operating Days/Year
350
350
350
350
350
350
350
350
350
350
20
20
20
20
20
20
20
20
20
20
1,400
Project Life
Years
MWh
1,400
1,400
1,400
1,400
1,400
1,400
1,400
1,400
1,400
MWh
28,000
28,000
28,000
28,000
28,000
28,000
28,000
28,000
28,000
28,000
$/kWh
$315
$560
$435
$1,088
$635
$2,176
$710
$1,960
$425
$1,377
$/kWh
$224
$224
$224
$224
$224
$224
$224
$224
$224
$224
$/kWh
$81
$118
$99
$197
$129
$360
$140
$328
$240
$/kWh
$620
$902
$758
$1,508
$988
$2,760
$/kWh
After Year 5
$0
$0
$274
$442
$0
$728
After Year 10
$195
$269
$209
$304
$0
After Year 15
$0
$0
$152
$213
$0
After Year 5
$0
$0
$0
$0
$0
After Year 10
$151
$151
$151
$151
$97
$2,512
$747
$1,841
$0
$980
$284
$1,101
$582
$415
$686
$269
$1,033
$510
$0
$588
$254
$1,033
$0
$0
$0
$0
$0
$151
$151
$151
$151
$151
$151
$1,074
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$11
$22
$13
$18
$24
$81
$22
$62
$16
$38
O&M % of Capex
1.7%
2.4%
1.8%
1.2%
2.4%
2.9%
2.1%
2.5%
2.1%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$108
$108
$108
$108
$108
$108
$108
$108
$108
$108
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
Efficiency
80%
72%
93%
91%
67%
63%
86%
86%
75%
76%
$/MWh
$319
$416
$369
$562
$429
$1,046
$433
$946
$411
$835
O&M Cost
25

Island
Units
Power Rating
Zinc
Lithium
Co
Flow Battery
Sodium
Lead
MW
Duration
Hours
Usable Energy
MWh

Operating Days/Year
350
350
350
350
350
350
350
350
350
350
20
20
20
20
20
20
20
20
20
20
2,100
Project Life
Years
MWh
2,100
2,100
2,100
2,100
2,100
2,100
2,100
2,100
2,100
MWh
42,000
42,000
42,000
42,000
42,000
42,000
42,000
42,000
42,000
42,000
$/kWh
$247
$420
$435
$1,088
$250
$1,020
$425
$1,377
$570
$1,960
$/kWh
$41
$41
$41
$41
$41
$41
$41
$41
$41
$41
$/kWh
$43
$69
$71
$169
$44
$159
$70
$213
$92
$300
$/kWh
$331
$530
$547
$1,298
$335
$1,220
$536
$1,630
$703
$2,301
$/kWh
After Year 5
$0
$0
$0
$0
$0
$630
$0
After Year 10
$153
$202
$209
$0
$88
$504
$269
After Year 15
$0
$0
$0
$0
$0
$441
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
After Year 10
$27
$27
$27
$27
$27
$27
$27
$0
$0
$0
$333
$686
$0
$0
$0
$0
$0
$27
$27
$27
$1,033
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$5
$13
$9
$14
$3
$30
$11
$33
$14
$57
O&M % of Capex
1.4%
2.5%
1.6%
1.0%
1.0%
2.5%
2.0%
2.0%
2.0%
2.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$281
$281
$281
$281
$281
$281
$281
$281
$281
$281
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Efficiency
80%
72%
93%
91%
65%
72%
75%
76%
86%
86%
$/MWh
$523
$677
$581
$870
$593
$1,231
$663
$1,259
$700
$1,533
O&M Cost
26

Commercial & Industrial
Units
Power Rating
Zinc
Lithium
Commercia
Flow Battery
Lead
Sodium
MW
Duration
Hours
Usable Energy
MWh

Operating Days/Year
350
350
350
350
350
350
350
350
350
350
10
10
10
10
10
10
10
10
10
10
1,400
Project Life
Years
MWh
1,400
1,400
1,400
1,400
1,400
1,400
1,400
1,400
1,400
MWh
14,000
14,000
14,000
14,000
14,000
14,000
14,000
14,000
14,000
14,000
$/kWh
$247
$420
$325
$1,088
$250
$1,020
$570
$1,960
$425
$1,377
$/kWh
$61
$61
$61
$61
$61
$61
$61
$61
$61
$61
$/kWh
$46
$72
$58
$172
$47
$162
$95
$303
$73
$216
$/kWh
$355
$554
$444
$1,321
$358
$1,244
$726
$2,325
$560
$1,654
$/kWh
After Year 5
$0
$0
$0
$0
$0
$630
$0
$0
$0
$0
After Year 10
$0
$0
$0
$0
$84
$0
$0
$0
$0
$0
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$41
$41
$41
$41
$41
$41
$41
$41
$41
$41
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$5
$14
$5
$14
$4
$31
$15
$58
$11
$33
O&M % of Capex
1.5%
2.5%
1.2%
1.1%
1.1%
2.5%
2.0%
2.5%
2.0%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$70
$70
$70
$70
$70
$70
$70
$70
$70
$70
2.6%
2.6%
2.6%
2.6%
2.6%
2.6%
2.6%
2.6%
2.6%
2.6%
Efficiency
80%
72%
85%
91%
65%
72%
86%
86%
75%
76%
$/MWh
$310
$452
$351
$838
$349
$1,083
$529
$1,511
$444
$1,092
O&M Cost
27

Commercial Appliance
Units
Power Rating
Zinc
Lithium
Residential
Lead
Flow Battery
MW
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
Duration
Hours
Usable Energy
MWh
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2

Operating Days/Year
250
250
250
250
250
250
250
250
Project Life
Years
10
10
10
10
10
10
10
10
MWh
50
50
50
50
50
50
50
50
500
500
MWh
500
500
500
500
500
500
$/kWh
$247
$390
$399
$1,051
$529
$1,913
$414
$825
$/kWh
$235
$235
$235
$235
$235
$235
$235
$235
$/kWh
$72
$94
$95
$193
$115
$322
$97
$159
$/kWh
$555
$719
$729
$1,479
$879
$2,471
$746
$1,219
$/kWh
After Year 5
$0
$0
$0
$0
$0
$0
$276
$525
After Year 10
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
$0
$0
After Year 10
$168
$168
$168
$168
$168
$168
$168
$168
After Year 15
$/kWh
After Year 15
$0
$0
$0
$0
$0
$0
$0
$0
$/kWh
$11
$19
$14
$20
$20
$63
$19
$31
2.0%
2.6%
2.0%
1.3%
2.2%
2.5%
2.6%
2.6%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
$0
$0
Charging Cost
O&M Cost
O&M % of Capex
$/MWh
$108
$108
$108
$108
$108
$108
$108
$108
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
Efficiency
80%
72%
93%
91%
86%
86%
77%
72%
$/MWh
$661
$833
$784
$1,363
$928
$2,291
$974
$1,504
Lithium
28

Residential
Units
Power Rating
Lithium
Lead
Flow Battery
MW
0.005
0.005
0.005
0.005
0.005
0.005
Duration
Hours
Usable Energy
MWh
0.01
0.01
0.01
0.01
0.01
0.01

Operating Days/Year
300
300
300
300
300
300
Project Life
Years
10
10
10
10
10
10
MWh
30
30
30
30
MWh
30
30
$/kWh
$471
$1,225
$529
$1,913
$25
$1,129
$/kWh
$475
$475
$475
$475
$475
$475
$/kWh
$142
$255
$151
$358
$75
$241
$/kWh
$1,088
$575
$1,845
$/kWh
$1,955
$1,155
$2,747
After Year 5
$0
$0
$0
$0
$0
$381
After Year 10
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
After Year 5
$0
$0
$0
$0
$0
$0
After Year 10
$315
$315
$315
$315
$315
$0
After Year 15
$0
$0
$0
$0
$0
$0
After Year 15
O&M Cost
$/kWh
$/kWh
$35
$41
$39
$82
$28
$39
3.3%
2.1%
3.4%
3.0%
4.9%
2.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$/MWh
$0
$0
$0
$0
$0
$0
Charging Cost
$/MWh
$125
$125
$125
$125
$125
$125
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
92%
89%
86%
86%
76%
63%
$/MWh
$1,034
$721
$1,657
O&M % of Capex

Efficiency
$1,596
$1,101
$2,238
29

Lazards Levelized Cost of Storage Analysis 1.0

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Lazards Levelized Cost of Storage Analysis 1.0

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CONFIDENTIAL

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

Description of selected energy storage technologies

operations and maintenance expense, charging cost and tax, as applicable

projected/expected capital cost declines

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

What is Lazards Levelized Cost of Storage Analysis?

WHAT THE LCOS DOES NOT DO

Defines operational parameters associated with systems

Identify the full range of use cases for energy storage,

Aggregates cost and operational survey data from original

Authoritatively establish or predict market clearing prices for

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

The Energy Storage Value PropositionA Cost Approach

System Cost &

particular use case requiring specified operating parameters

For example, a single energy storage system could

theoretically be designed to capture value through both

The total of all potential value streams available for a given

system thus defines the maximum, economically viable cost

Importantly, incremental sources of revenue may only

become available as costs (or elements of levelized cost)

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

Overview of Selected Energy Storage Technologies

solutions are vanadium redox and zinc-bromine

increase efficiency and lifetimes and improve partial state-of-charge operability(b)

self-discharge and high charging efficiency

this technology remains unproven in widespread commercial deployment

LAZARD'S LEVELIZED COST OF STORAGE ANALYSISVERSION 1.0

Overview of Selected Energy Storage Technologies (contd)

Requires suitable geology

Low cost, flexible sizing, relatively large-scale

Relatively difficult to modularize for smaller installations

Low energy density

Leverages existing gas turbine technologies

Reduced efficiency due to rapid charge/discharge

High power density, scalability and depth of discharge capability

Relatively low energy capacity

Compact design with integrated AC motor

High heat generation

Mature technology with established recycling infrastructure

Poor ability to operate in a partially charged state

Advanced lead-acid technologies leverage existing technologies

Relatively poor depth of discharge and short lifespan

Multiple chemistries available (partly as a result of robust deployment

Remains relatively high cost

High power capacity solution

Relatively high balance of system costs

No degradation in energy storage capacity

Mature technology (commercially available; leverages existing

Exposure to natural gas price changes

Power and energy profiles highly and independently scalable

Efficient power and energy density

SELECTED COMPARATIVE DISADVANTAGES

Requires advanced manufacturing capabilities to achieve high performance

Relatively low energy density

Relatively mature technology (commercially available)

Although mature, inherently higher costs

High energy capacity; long duration

Operates at high temperature, resulting in potential flammability issues

Currently quoted as low cost

Currently unproven commercially

DOE Energy Storage Database; Lazard estimates.