Comprehensive Economic Assessment of Large-Scale Energy Storage Systems: Lifecycle LCOE and Net LCOS Analysis

The increasing penetration of renewable energy has created an urgent need for economically competitive large-scale energy storage technologies. Conventional economic evaluations mainly focus on lifecycle costs while neglecting market participation, revenue diversification, and investment uncertainty. This study proposes an integrated lifecycle economic assessment framework combining discounted cash flow (DCF) theory, lifecycle cost analysis, multi-market revenue modeling, and uncertainty analysis. A revenue-adjusted indicator, termed Net Levelized Cost of Storage (Net LCOS), is introduced to quantify the actual economic competitiveness of energy storage technologies by incorporating revenues from energy arbitrage, ancillary services, and capacity remuneration. The proposed framework is applied to three representative large-scale energy storage technologies: pumped hydro storage (PHS), compressed air energy storage (CAES), and battery energy storage (BES). The results show that PHS exhibits the lowest levelized cost of energy (LCOE) (0.519 RMB/kWh) and the strongest economic robustness owing to its long service life and superior capital amortization capability. Incorporating multi-market revenues substantially improves the economic performance of all storage technologies. BES exhibits the largest reduction in Net LCOS, whereas PHS maintains the lowest Net LCOS and the strongest overall economic competitiveness. Sensitivity analysis identifies conversion efficiency, capital investment, capacity remuneration, and operational utilization as the dominant determinants of storage economics. The proposed framework extends a comprehensive approach for comparing large-scale energy storage technologies by integrating lifecycle costs, market revenues, and uncertainties, supporting investment decisions and electricity market design.