Business opportunities and risks in the energy storage industry

What technology risks are associated with energy storage systems?

Technology Risks Lithium-ion batteries remain the most widespread technology used in energy storage systems, but energy storage systems also use hydrogen, compressed air, and other battery technologies. Project finance lenders view all of these newer technologies as having increased risk due to a lack of historical data.

What challenges do energy storage resources face?

Energy storage resources present a distinct set of challenges given their unique nature: unlike conventional or renewable generation, energy storage resources must be charged with electric power, which will sometimes (but not always) be provided by the offtaker.

Are energy storage projects a good investment?

Investors and lenders are eager to enter into the energy storage market. In many ways, energy storage projects are no different than a typical project finance transaction. Project finance is an exercise in risk allocation. Financings will not close until all risks have been catalogued and covered.

Why is energy storage important?

Continued expansion of intermittent renewable energy, ESG-focused investments, the growing versatility of storage technologies to provide grid and customer services, and declining costs for key components like lithium-ion batteries all played a significant role in driving the investment and development of energy storage.

Can emerging markets benefit from energy storage?

In emerging markets around the world, there is only limited experience with energy storage, yet vast potentials exist to benefit from the technology. Many of these markets share similar energy market dynamics and needs for new resources.

What is the future of energy storage?

Chart 3.1 provides forecasts for new energy storage capacity and revenue for each of the six major developing regions identified in this report. The development of distributed and local energy resources, including renewables and energy storage, can provide significant economic growth, jobs, and a sustainable energy future in emerging markets.