Life Cycle Assessment and Costing of Large-Scale Battery Energy Storage Integration in Lombok’s Power Grid

One of the main challenges of Lombok Island, Indonesia, is the significant disparity between peak load and base load, reaching 100 MW during peak hours, which is substantial considering the island’s specific energy dynamics. Battery energy storage systems provide power during peak times, alleviating grid stress and reducing the necessity for grid upgrades. By 2030, one of the proposed capacity development scenarios on the island involves deploying large-scale lithium-ion batteries to better manage the integration of solar generation. This paper focuses on the life cycle assessment and life cycle costing of a lithium iron phosphate large-scale battery energy storage system in Lombok to evaluate the environmental and economic impacts of this battery development scenario. This analysis considers a cradle-to-grave model and defines 10 environmental and 4 economic midpoint indicators to assess the impact of battery energy storage system integration with Lombok’s grid across manufacturing, operation, and recycling processes. From a life cycle assessment perspective, the operation subsystem contributes most significantly to global warming, while battery manufacturing is responsible for acidification, photochemical ozone formation, human toxicity, and impacts on marine and terrestrial ecosystems. Recycling processes notably affect freshwater due to their release of 4.69 × 10−4 kg of lithium. The life cycle costing results indicate that over 85% of total costs are associated with annualized capital costs at a 5% discount rate. The levelized cost of lithium iron phosphate batteries for Lombok is approximately 0.0066, demonstrating that lithium-ion batteries are an economically viable option for Lombok’s 2030 capacity development scenario. A sensitivity analysis of input data and electricity price fluctuations confirms the reliability of our results within a 20% margin of error. Moreover, increasing electricity prices for battery energy storage systems in Lombok can reduce the payback period to 3.5 years.