>>715095118>CopeLCOE is not a complete metric of competitiveness, as it lacks representation of
the value provided to the system. Power generation technologies primarily generate electricity
(or energy) but also provide other services that are critical to the adequacy, reliability and quality
of electricity supply. Among technologies that have similar operational characteristics and play
similar roles in power systems โ and therefore have similar value to the overall system โ the LCOE
can provide a robust metric of competitiveness. But not all power technologies contribute equally
to these essential services.
A comparison of a utility-scale solar PV project with and without a battery storage system
highlights the need to look beyond the LCOE alone. In terms of costs, adding a battery storage
system to a solar PV project necessarily raises the total costs of the project and, when charged only
by the solar PV array, reduces the total output due to the round-trip efficiency of storage. In this
case, both factors indicate a higher LCOE for solar PV plus storage compared with solar PV alone. At
the same time, the addition of a battery storage system would increase the value proposition of the
project for the owner and system. Output could be aligned dynamically to system needs, providing
energy when it is most valuable. The battery could provide ancillary services to the grid, including
frequency control, and could displace the need for other types of dispatchable capacity. For a system
planner or an investor considering both the costs and value aspects, solar PV plus storage could be
the better choice despite having a higher LCOE.