Energy and natural resources
Round-trip efficiency
The share of energy put into storage that comes back out.
Facts checked against sources onWhat does Round-trip efficiency mean?
Round-trip efficiency is the energy a storage system gives back divided by the energy used to charge it. Some energy is always lost as heat. Lithium-ion batteries typically return around 85 to 90 percent, and pumped hydro storage somewhat less. Example: a battery charged with 100 MWh returns 85 MWh, an efficiency of 85 percent. If it buys power at 20 per MWh in the sunny afternoon and sells at 80 in the evening, each MWh sold effectively cost 20 / 0.85 = about 23.5, leaving a spread of about 56.5 before other costs. Storage profits depend on this price spread, how often the battery cycles, and how fast it wears out.
Where does it come up in case interview prep?
Related terms
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- Unit economicsThe revenue and cost of one unit: one product, order or customer.
- Barrel of oil equivalent (boe)A unit that converts gas into barrels of oil by energy content, so oil and gas can be added together.
- Lifting costThe cost of producing oil or gas from wells that already exist, per barrel.
- Full-cycle breakevenThe oil price a project needs to cover all its costs, including building it, and earn its required return.
- Fiscal breakeven oil priceThe oil price a government needs to balance its budget.
- Crack spread (refining margin)The gap between the price of crude oil and the prices of the fuels made from it.
Learn it in context
See Round-trip efficiency at work in a lesson from Power, utilities and renewables, with checks as you go.
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