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The most cost-effective way to store energy by far, without any
competitors coming even close, to my knowledge is using a water
reservoir. The simple effect of gravity (potential energy) provides
all of energy storage. To build one you need access to land (a valley)
and then just build a dam (ideally with minimal wildlife) to allow
the water to build up. Brookfield Asset Management enjoyed buying
them because of the absence of technological outdating. Buying batteries
produces an earnings yield right away, but if something cheaper comes
out in 5 years, then you have an opportunity loss on the capital,
so there's a lack of investment until the capital costs comes reasonably
close to bottoming. That's not a problem with water reservoirs, as
they don't depreciate at all - though the generator machinery
can be optionally updated to squeeze out a small amount of extra
efficiency but that is a tiny and extremely inexpensive part of the
massive whole, which stays exactly the same after 500+ years
and requires no maintenance.

It seems to me you are overlooking the continuing maintenance cost of operating a dam. The material (generally reinforced concrete) deteriorates and needs maintenance all the time. The area upstream of the dam silts up until the actual storage capacity of the dam is greatly reduced. The variability of the flow rate of the water means that sometimes there is no surplus power to provide. Competing interests (e.g., farmers wanting water at the time that water should not be released), flood protection, and so on, must be dealt with.

When it comes to depreciation and maintenance, consider this:
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