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4
COST/BENEFIT ANALYSIS
4.1 NAS Battery Pricing and Integrated System Costs
In April 2002, NGK announced construction of expanded manufacturing facilities in Japan with
an initial capacity commitment for 1000 modules per year in April 2003. Plans for future
expansion include achieving 3600 modules per year in 2006 and 8000 by 2010. Nominal unit
prices for utility scale applications of the NAS PQ and PS Modules addressed herein are:
NAS 2003 2006 2010
Module Price, K$ Price, K$ Price, K$
PS $94.5 $75 $55
PQ $92.5 $75 $55
The NAS scope of supply for the prices indicated includes NAS battery modules, the battery
management system, DC circuit breakers (PQ modules only), exterior enclosures, import duties
and fees, shipment from Japan to an inland US site, plus technical support for system integration,
installation and startup. For the purposes of this document, NAS prices for year 2006 are used
for initial costs, and replacement costs are based on the 2010 mature prices.
The cost of integrated systems is obtained by combining the cost of the NAS battery scope of
supply with PCS and system interface equipment, plus balance of plant (BOP) scope. PCS and
system interface equipment is assumed to include grid disconnect and breaker protection,
transformers, controller(s) to synchronize one or more NAS system trains with the grid, and all
equipment necessary for power conversion and isolation of the NAS battery system. Installed
PCS and system interface equipment is valued at $230/kW for non-grid interactive systems and
$280/kW for grid interactive systems. The BOP scope of supply consists of grid connection at
the point of common coupling, land and improvements (e.g., access, services, etc.) and is valued
at $20/kW. Cost components for the applications described in Section 3 are shown in Table 4-1.
4.2 Lifecycle Cost Analysis
Further insight to the value of energy storage can be gained through lifecycle cost analyses using
a net present value (NPV) methodology and comparison with alternatives. The financial
parameters in Table 4-2 are used to assess the applications described in the preceding sections
and, except for wind stabilization, the assumed electricity rate structure is presented in Table 4-3.
The electricity rate structure used to characterize wind stabilization is presented in Section 4.2.4.
4-1