Investigation on Levelized Cost of Electricity for Lithium Iron Phosphate Batteries

With the rapid development of renewable energy based generation, energy storage plays a crucial role in improving the security, reliability and stability of the power system concerned and facilitating large-scale integration of renewable energy generation. The levelized cost of electricity (LCOE) of an energy storage system is a key factor in evaluating its economic feasibility and operational benefits. This study presents a model to analyze the LCOE of lithium iron phosphate batteries and conducts a comprehensive cost analysis using a specific case study of a 200 MW·h/100 MW lithium iron phosphate energy storage station in Guangdong. The model considers various components such as initial investment cost, charging cost, taxes and fees, financial expenses, and operational costs. By employing the discounted cash flow method, the total cost of the project is calculated. The LCOE calculation and sensitivity analysis are next performed to explore the key factors influencing electricity cost. The simulation results show that the LCOE for the project is 1.247 RMB/kWh. The attained results of energy storage station costs and sensitivity of key factors could provide valuable insights for decision-making and planning in energy storage project investment.