The Economic End of Life of Electrochemical Energy Storage
For energy storage planners and operators, this work introduces a more economically relevant retirement criterion that could change system planning and assessment.
The paper proposes an economic end-of-life criterion for electrochemical energy storage, retiring it when it can no longer yield positive net economic benefit, and shows through a case study that this can occur significantly faster than the physical end-of-life criterion.
The useful life of electrochemical energy storage (EES) is a critical factor to EES planning, operation, and economic assessment. Today, systems commonly assume a physical end-of-life criterion, retiring EES when the remaining capacity reaches a threshold below which the EES is of little use because of functionality degradation. Here, we propose an economic end of life criterion, where EES is retired when it cannot earn positive net economic benefit in its intended application. This criterion depends on the use case and degradation characteristics of the EES, but is independent of initial capital cost. Using an intertemporal operational framework to consider functionality and profitability degradation, our case study shows that the economic end of life could occur significantly faster than the physical end of life. We argue that both criteria should be applied in EES system planning and assessment. We also analyze how R&D efforts should consider cycling capability and calendar degradation rate when considering the economic end-of-life of EES.