In November 2015, financial advisory firm Lazard released its first-ever Levelized Cost of Storage Analysis (LCOS). Well known for its Levelized Cost of Energy Analysis (LCOE) analysis—now out in version 9.0—Lazard publishing an analysis of storage is a major sign that it considers battery energy storage a critical technology that’s here to stay…But closer look at Lazard’s LCOS shows something RMI’s October 2015 Economics of Battery Energy Storagereport noted: a) battery economics are usually evaluated on the basis of single-use cases, b) stacking multiple uses can greatly enhance battery economics, and c) evaluating those economics gets difficult quickly. It’s the use cases and stacked value streams—in addition to per-kWh cell cost declines—that offer tremendous opportunity…Batteries are tricky to evaluate in part because they aren’t strictly a demand- or supply-side solution. They’re an arbiter of supply and demand, serving as either generation or load depending on whether they’re discharging or charging. So the favorable finances of storage can use all the clarity and all the study they can get…this is a comprehensive report, the bottom line being that, more bean counting is needed, to find more ways, to add to the bottom line, so storage clearly offers better return than gas peaker plants and other such.

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