Analysis on LCOE and Profit Model for Electrochemical Energy Storage in Power Systems

In order to achieve the national dual-carbon strategic goal and promote the transformation of national energy structure， it is of great significance to promote and develop electrochemical energy storage （ESS） technology. The cost and profit model are the key issues that determine the scale of its technical application and development. This paper firstly established a model of levelized cost of energy （LCOE） for ESS， then compared the economic and technological characteristics of several typical ESS technologies that have been practically applied. On this basis， the LCOE for a lithium iron phosphate battery storage was calculated. And the impact of purchasing cost， cycle life， number of cycles per year， unit capacity cost， operation and maintenance fee and other factors on the LCOE was analyzed through the calculation example. Finally， the profit model of ESS in China was analyzed from three application scenarios， namely， power supply side， grid side and user side energy storage， in the light of the actual situation in China. The case analysis shows that overall， the profitability of ESS in the power system based solely on energy revenue is not satisfactory. In the future， it is necessary to clarify the positioning of ESS， improve operational standards and profit mechanisms， and broaden profit channels.