Levelized Cost of Energy for PV and Grid Scale Energy Storage Systems

Abstract

With the increasing penetration of renewable energy sources and energy storage devices in the power system, it is important to evaluate the cost of the system by using Levelized Cost of Energy (LCOE). In this paper a new metric, Levelized Cost of Delivery (LCOD) is proposed to calculate the LCOE for the energy storage. The recent definitions in LCOE for renewable energy system has been reviewed. From fundamental principles, it is demonstrated that there is a need to introduce a new method to evaluate LCOE of the system as the conventional LCOE is not applicable for renewable energy storage systems. Three years of solar irradiance data in Africa collected from Johannesburg and the national load data from Kenya are obtained for case studies. The proposed cost calculation methods are evaluated for two types of storage technologies (Vanadium Redox Battery (VRB) and Lithium-ion) with real-life data. It shows that the marginal LCOE and LCOD indices can be used to assist policymakers to consider the discount rate and the type of storage technology for a cost effective renewable storage energy system.