Difficulties in bank support for energy storage industry

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.

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 hinder energy storage system adoption?

Challenges hindering energy storage system adoption As the demand for cleaner, renewable energy grows in response to environmental concerns and increasing energy requirements, the integration of intermittent renewable sources necessitates energy storage systems (ESS) for effective utilization.

Why do energy storage projects need project financing?

The rapid growth in the energy storage market is similarly driving demand for project financing. The general principles of project finance that apply to the financing of solar and wind projects also apply to energy storage projects.

Can energy storage technologies help drive development in emerging economies?

Energy storage technologies hold significant potential to help drive development in emerging economies by improving the quality of the electricity supply and facilitating the effective integration of renewable energy.

What are the challenges facing the utility-scale energy storage industry?

A number of challenges remain for the growing utility-scale ESS industry, especially in developing markets. As is the case with the entire energy storage industry, the high upfront cost for systems remain the most significant barrier to growth. However there are additional issues that are specific to the utility-scale segment.