Calculation of energy storage depreciation cost

How should energy storage be assessed?

Economic assessment of energy storage must be based on the lifetime cost of energy or power delivered, factoring in all parameters for technology cost, performance, and the service it provides.

What is year N depreciation?

Year n depreciation - M A C R S n - These are the fractions of the total capital cost which can be depreciated in year n. By default, these are set up for MACRS depreciation, but they can be modified to perform linear depreciation or other rates allowed in the target country. In this section, a unit analysis of the proposed formula is presented.

What is a levelized cost of electricity storage?

Although useful and actively pursued, a generally accepted definition of a levelized cost of electricity storage, analog to the widespread used Levelized Cost of Electricity (LCOE) , does not yet exist. Such a measure could allow for simple verification of the economic viability of certain storage technologies in a given electricity market.

What is the combined levelized cost of energy?

In general, the combined levelized cost of energy lies between the LCOE of PV and LCOE of storage. Correction factor K for LCOE calculation. Comparison between exact formula with approximation formula. ‡ .

How is levelized cost of Storage (LCOS) calculated?

Illustrative examples are presented and analyzed. In first instance, the Levelized Cost of Storage (LCOS) is calculated as formulated in eq. (1), which is analog to the LCOE formulation in , but uses charging cost as fuel cost and takes the discharged electricity instead of generated electricity.

Do negative years allow no depreciation?

Negative years allow no depreciation; and d f r a c = the fraction of capital costs that can be depreciated. To determine LCOS, taxes need to be determined for the case where the net present value of the project is exactly zero.