Energy Storage Analysis

Michael Penev, Chad Hunter

National Renewable Energy Laboratory

April 30, 2019

DOE Hydrogen and Fuel Cells Program 

2019 Annual Merit Review and Peer Evaluation Meeting

This presentation does not contain any proprietary, confidential, or otherwise restricted information.

Project ID # SA173 
NREL | 2

Overview

Timeline Barriers

Start: October, 2018

End: September, 2019*

* Annual direction determined by DOE

4.5B Stove-piped/Siloed Analytical Capability

4.5C Inconsistent Data, Assumptions and Guidelines

4.5E Unplanned Studies and Analysis

Budget Partners

FY19 Planned DOE Funding: $155K

Funds Received to Date: $155K

Collaborators

• DOE, Office of Energy Efficiency and Renewable 

Energy (EERE), Fuel Cell Technologies Office

• DOE, EERE, Vehicle Technologies Office

• Xcel Energy

• Southern Company Services

• Argonne National Laboratory

• National Renewable Energy Laboratory
NREL | 3

Energy storage analysis assesses market relevance and 

competitiveness for hydrogen.

Analysis assesses hydrogen system 

competitive space and valuation in 

the landscape of energy storage 

technologies. 

Analysis 

Framework

• H2FAST

• Cost estimation

• Competitive market 

analysis

• Financial analysis

• Data: HDSAM, 

MYRD&D, H2A, VTO 

targets, AMO 

targets

Models & Tools

• H2FAST

• RODeO

Studies & 

Analysis • Competitive tech. 

assessment

• Grid support & coproducts

Outputs & 

Deliverables

• Annual report

• Inputs to working 

groups 

• Input to HTAC

NREL: H2FAST

• H2@Scale

• Additional external 

reviewers

• Fuel Cell 

Technologies Office

• H2@Scale

Acronyms

H2FAST: Hydrogen Financial Analysis Scenario Tool

HDSAM: H2A Delivery Scenario Analysis Model

H2@Scale: Hydrogen at Scale

Relevance/Impact 1
NREL | 4

Energy Storage Market Segmentation

Relevance/Impact 2

Duration

Service Ancillary

Services Ramping Smoothing Peaking

Wind

Energy

Balancing

Seasonal

Storage

SecondsMinutes

~30

Minutes

~1-4

Hours

~2-4

Hours

DaysWeeks Months

Current Trends: 

Shorter Duration

Emerging Trends: 

Longer Duration

Integrated Hydrogen Energy Storage + Coproduction 

Current and emerging energy market trends can be met using integrated 

hydrogen energy storage while also co-producing hydrogen for high value uses

Market Segmentation of Energy Storage
NREL | 5

Energy Storage Needs Examples

0

10,000

20,000

30,000

40,000

50,000

60,000

2/1/152/2/152/3/152/4/152/5/152/6/152/7/152/8/152/9/15

2/10/152/11/152/12/152/13/152/14/152/15/152/16/152/17/152/18/152/19/152/20/152/21/152/22/152/23/152/24/152/25/152/26/152/27/152/28/15

Spain

France

Britain

Germany

Denmark

Wind power (MW)

Diurnal “Duck Curve”:

- hours of storage is needed

- this happens daily

Wind gaps:

- days of storage is needed

- this happens few times a year

- long distance transmission 

does not address such gaps

Relevance/Impact 3

Source: https://www.energy.ca.gov/renewables/tracking_progress/documents/resource_flexibility.pdf

http://www.pfbach.dk/
NREL | 6

42%

37%

13%

5.6%

1%

1%

0.3%

0.09%

0 1,000 2,000 3,000

Thermal storage

Batteries

Flywheels

Compressed air w/ natural gas

Capacitors

Flow batteries

Hydrogen (power to gas)

Compressed air

Global operational capacity in 2018 (MW)

Global Energy Storage Market Inventory, 2018

Relevance/Impact 4

Source: DOE Global Energy Storage Database

Global Energy Storage Inventory: 

• 96% is pumped hydro serving diurnal operation

• Batteries typically provide few hours of storage

• Thermal storage is predominantly molten salt for concentrated solar 

• Fly wheels provide very short duration storage (frequency regulation)

Pumped hydro

96%
NREL | 7

Landscape of Energy Storage Technologies

Source: DOE/EPRI Electricity Storage Handbook, 2015

Relevance/Impact 5
NREL | 8

Modeling Approach: Subsystem Boundaries

Approach 1

Electrolyzer

8

Hydrogen 

Storage

Power 

Conditioning 

System

Inverter

Rectifier

AC DC

AC DC

Fuel Cell

Compressor

H2 H2

H2

Electrolyzer + 

tank H2 storage 

+ PEM fuel cell

Storage duration (h) 24+

Round trip efficiency 35%

Power capital ($/kW) 1,500

Storage capital ($/kWh-DC) 35

Stack life years (years) 8 – 10

Usable depth of discharge ~83%

Hydrogen systems also decouple power 

components (stacks, power conditioning) and 

energy components (hydrogen tanks), allowing 

more flexible design for storage duration. 

Hydrogen systems also can co-produce hydrogen.
NREL | 9

Other System Configurations

ESS

(Energy Storage System)

ESS+ELZR

(ESS + Electrolyzer H2 Production)

ELZR

(Electrolysis H2 Production)

Off-peak electricity

24/day electricity

24/day electricity

On-peak electricity

Hydrogen

Hydrogen

On-peak electricity

Three systems are evaluated in the same framework to assess integration of ESS and ELZR.

H2 storage technology can have other economic activity once storage is full. 

Approach 3
NREL | 10

Simple diurnal cycle:

 4 hours power generation 

 8 hours storage recharge

 12 hours hydrogen co-production

H2 co-production would improve 

economics if H2 price exceeds 

variable operating costs. 

Approach 4

Hydrogen Co-Production

-100%

0%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 24 48 72 96 120 144 168

Time (hours)

Discharging |charging (%power) 

State of charge (%)

-100%

0%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 24 48 72 96 120 144 168

Time (hours)

Discharging |charging (%power) |production

State of charge (%)
NREL | 11

System Sizing Assumptions

Above system sizing allows meaningful unit capacity for grid support and 

hydrogen production volume. Approximately 2x installed capacity can 

provide sufficient hydrogen volume for large heavy duty stations.

ESS only ESS+ELZR ELZR only

Peak power production (h/day) h/day 4 4

Recharge time (h/day) h/day 8 8

H2 production (h/day) h/day 12 24

Power generation (MW) MW 10 10

Power for recharging (MW) MW 11.6 11.6 11.6

Power consumption (MWh/y) MWh/y 33,977 84,943 101,932

Power production (MWh/y) MWh/y 14,600 14,600

H2 production (kg/day) kg/day 2,530 5,061

ESS: Energy Storage System

ESS + ELZR: Energy Storage System + Electrolyzer Hydrogen Production

ELZR: Electrolyzer Hydrogen Production

Accomplishments 1
NREL | 12

Component Cost & Performance Assumptions

Subsystem Technology Staus & Targets, all costs in 2016$ Current status

Rectifiers Rectifier efficiency 98.4%

Rectifier cost ($/kW AC) $ 196

Total installation cost factor (% of equipment capital) 57%

System O&M (% of capital cost) 1.0%

Electrolyzers Electrolyzer power use (kWh DC/kg) 54.3

Electrolyzer cost ($/kW DC) $ 737

System life (years) 20

Total installation cost factor (% of equipment capital) 57%

System O&M (% of capital cost) 7.8%

Compressors Power use (kWh AC/kg) 1.42

Compressor cost factor A (equation form c=A*p^B; where p is power) 2290

Compressor cost exponent B (equation form c=A*p^B; where p is power) 0.8225

Cost factor for inclusion of oxygen compression 50%

Total installation cost factor (% of equipment capital) 187%

System O&M (% of capital cost) 4.0%

Storage Terrestrial storage installed cost ($/kg) 1,168

Terrestrial storage installed cost ($/kWh LHV) 35

Terrestrial storage O&M (% of capital cost) 1.0%

Cushion gas (%) 17.1%

Fuel cells Fuel cell power production (kWh DC/kg) 20.0

Fuel cell cost ($/kW DC) 507

Total installation cost factor (% of equipment capital) 20%

System O&M (% of capital cost) 6.0%

Inverters Inverter efficiency (%) 98.6%

Inverter cost ($/kW) $ 384

Total installation cost factor (% of equipment capital) 20%

System O&M (% of capital cost) 1.0%

Feedstock Electricity cost ($/kWh) 0.033

Cost and 

performance 

inputs have been 

peer reviewed by 

all stakeholders.

Feedstock 

electricity cost of 

3.3¢/kWh is used.

Accomplishments 2
NREL | 13

0.59 

0.17 

0.13 

0.03 

0.00 

0.21 

0.17 

0.12 

0.10 

0.09 

0.08 

0.04 

0.04 

0.03 

0.02 

0.01 

0.01 

0.00 

0.00 

0.00 

0.00 

Peak electricity sales

Inflow of equity

Inflow of debt

Monetized tax losses

Cash on hand recovery

Dividends paid

Off-peak electricity

Hydrogen storage

Planned & unplanned...

Repayment of debt

Interest expense

Income taxes payable

Electrolyzer

Installation cost

Fuel cell

Rectifier

Property insurance

Selling & administrative...

Cash on hand reserve

Inverter

Compressor

Operating revenue

Financing cash inflow

Operating expense

Financing cash outflow

Real levelized value breakdown of peak electricity ($/kWh)

H2FAST Model Used For Levelized Cost Analysis

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 24 48 72 96 120 144 168

Time (hours)

Discharging | charging (%/h)

State of charge (%)

• Equipment sizing

• Cost estimation

• Efficiency estimation

• Energy Use

• Energy Costs

• Financial Assumptions

Techno-economic assessment is made based 

on minimal equipment sizing to achieve 

benchmark cycle. H2FAST model was used to 

evaluate financial performance of scenarios.

https://www.nrel.gov/hydrogen/h2fast.html

Accomplishments 4
NREL | 14

Financial Assumptions

Financing Information

Total tax rate (state, federal, local)

Capital gains tax

Are tax losses monetized (tax equity application)

Allowable tax loss carry-forward 

General inflation rate

Depreciation method

Depreciation period

Leveraged after-tax nominal discount rate

Debt/equity financing

Debt type

Debt interest rate (compounded monthly)

Cash on hand (% of monthly expenses)

10.0%

 5 year

MACRS

1.90%

 7 year

Yes

100%

4.00%

Revolving debt

 1.50

15.00%

27.00%

Accomplishments 3
NREL | 15

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0.08 0.10 0.12 0.14 0.16 0.18 0.20 0.22 0.24 0.26 0.28 0.30 0.32 0.34 0.36 0.38 0.40

ELZR only

ESS+ELZR

ESS only

Price of power sold ($/kWh)

Production revenue from hydrogen ($/kg)

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ELZR only

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ESS only

Price of power sold ($/kWh)

Production revenue from hydrogen ($/kg)

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ELZR only

ESS+ELZR

ESS only

Price of power sold ($/kWh)

Production revenue from hydrogen ($/kg)

IRR% Sensitivity Vs. Co-Product Value

• Bubble size is proportional to project internal rate of return IRR (%)

• Depending on value of electricity and hydrogen, ESS, ELZR or ESS+ELZR system yields highest IRR

• ESS +ELZR can lower the price of hydrogen from ~$3 to ~$2

• H2 co-production reduces the cost of produced peak power.

ELZR IRR>10%

ESS+ELZR IRR>10%

ESS > 10%

Synergistic 

advantage: ~+8% IRR

Accomplishments 5
NREL | 16

Key Stakeholders

Reviewers

• DOE Fuel Cell Technologies Office

• DOE Vehicle Technologies Office

• Xcel Energy

• Southern Company Services, Inc.

• Argonne National Laboratory

• H2@Scale stakeholders

Collaboration
NREL | 17

Remaining Challenges and Barriers

Valuation of long duration storage is uncertain

– Most storage projects serve diurnal needs (<24h)

– Function of long-duration storage is currently served by fossil peaking plants

Limited operational data from existing energy storage projects for 

benchmarking

Inconsistent valuation of ancillary services by region in the US

Challenges
NREL | 18

Evaluate Means of Improving 

Round Trip Efficiency

Increased efficiency can be traded for capital expenses

1. Increase electrolysis & fuel cell active area

2. Consider solid oxide electrolysis (SOEC)

3. Consider SOEC with thermal storage (store waste heat from 

power generation and use for thermal needs in electrolysis)

4. Consider high pressure electrolysis (reduce compression needs)

5. Consider compression energy recovery with turbo expander

Round trip efficiency is more important than capital cost. 

Improving efficiency can be traded for increased capital cost.

Future Work 1
NREL | 19

Expand Peripheral Analysis

Incorporation of portfolio of hydrogen technologies

– Reversible solid oxide fuel cell systems with thermal storage

– Use of spinning equipment for power generation

– Use of geologic and isostatic hydrogen storage (deep water) for larger 

scales

Extend analysis into larger systems in service of H2@Scale applications

Perform select system analysis using RODeO

– Detailed grid model

– Perform near-term simulation of ESS economic performance

– Feed into on-going work for valuation of long duration storage

Future Work 2
NREL | 20

Summary

• NREL is performing integrated energy storage and hydrogen co-production 

analysis

– energy storage system operation can be enhanced with H2 co-production

• Simple analysis framework was used to facilitate conception of integrated 

systems, and evaluate impact of technology tech. targets.

• Diverse stakeholder input is received

– DOE Vehicle Technology Office

– DOE Fuel Cell Technology Office

– Argonne National Laboratory

– Xcel Energy

– Southern Company Services, Inc.

• Further exploration of technology options and grid services may expand 

the economic viability window of hydrogen technologies 
NREL | 21

BACKUP SLIDES
NREL | 22

List of Acronyms

AC Alternating Current (electricity)

AMO Advanced Manufacturing Office

DC Direct Current (electricity)

DOE United States Department of Energy

EERE Energy Efficiency and Renewable Energy

ESS Energy storage system

FCTO Fuel Cell Technologies Office

H2 Hydrogen

H2@SCALE Hydrogen at scale

H2A Hydrogen Analysis model

H2FAST Hydrogen Financial Analysis Scenario Tool

HDSAM Hydrogen Delivery Scenario Analysis Model

HTAC Hydrogen Technology Advisory Committee

kW kilowatt (unit of power)

kWh kilowatt hour (unit of energy)

LCOE Levelized Cost of Energy

MACRS Modified Accelerated Cost Recovery System (depreciation schedule)

MW megawatt (unit of power)

O2 Oxygen

RODeO Revenue Operation and Device Optimization Model

SOEC Solid Oxide Electrolysis

VTO Vehicle Technologies Office
www.nrel.gov

NREL/PR-5400-73481

This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, 

LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by U.S. 

Department of Energy Office of Energy Efficiency and Renewable Energy Fuel Cell Technologies Office. The views 

expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S. 

Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S. 

Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published 

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