(You can also read The Importance of Project Finance to Energy Storage.)
Grid stabilisation, grid modernisation, and risk analysis are the top three reasons why energy storage is relevant to project finance.
- Grid modernisation
It is difficult to modernise the electric grid without incorporating energy storage. Whether the storage is necessary to integrate renewable generation, ancillary services, or for asset management, the future of the grid requires energy storage as a key component. (1) An important role for energy storage, with an increasingly uncertain weather environment, is providing resiliency for a modernised electric grid.
- Grid stabilisation
According to the World Bank, the majority of global GDP growth through 2025 will come from emerging economies.(2, 3) Besides a bright future, these countries share a need to build new and stabilise existing grid infrastructure in order to achieve projected growth. Energy storage will participate in both private and public sector contexts as regional and site-specific solutions are deployed. This is a classic opportunity for project finance.
- Risk analysis and management The introduction of energy storage as a viable component of energy infrastructure disrupts the existing risk analysis schema for (renewable) energy infrastructure projects with important impacts to risk allocation strategies. This blog aims to address these issues by being a resource and discussion forum on these matters.
1) Laurel Passera (July 14, 2014). The New Mod Squad – Grid modernization for our shifting energy resources. IREC blog. Retrieved 2014-08-13. (http://www.irecusa.org/2014/07/the-new-mod-squad-grid-modernization-for-our-shifting-energy-resources/)
2) Global Development Horizons 2011—Multipolarity: The New Global Economy. The World Bank. Retrieved 2014-08-12. (http://go.worldbank.org/0BAB8YNG90)
3) 2013 Capital for the Future: Saving and Investment in an Interdependent World. The World Bank. Retrieved 2014-08-12. (http://go.worldbank.org/T3OEGQAH20)
For exclusive content on this topic, subscribe to my Occasional Newsletter: