Batteries have more in store

Battery storage is an exciting front in the energy transition, with industry specialists predicting rapid growth.

The value of the global renewable battery storage market is set to rocket over the next seven years. The industry is predicted to see a compound annual growth rate of 37 percent from 2021 to 2028, making it worth $15 billion – a huge leap from $903 million in 2019, according to market research company Research Nester.

David Scaysbrook, co-founder and managing partner at Quinbrook Infrastructure Partners, says: “Under almost any scenario, battery storage is set for huge growth and is vital to support the shift to weather-dependent renewables dominating our power supply capacity.”

In September, Quinbrook announced plans to build a large solar and battery storage plant in the UK. The firm has said Project Fortress in Kent will cost around $370 million to develop. Once operational, it will be the largest single-site photovoltaic installation in the UK.

“Storage is highly complementary and necessary to more efficiently manage the timely delivery of stored renewable power, but also to help our electric grids manage the greater variability of renewable power output,” adds Scaysbrook.

Growth challenges

Like any expanding industry, the battery storage sector faces a number of challenges.

“Most revenue streams carry a degree of market risk, which makes these assets more difficult and more expensive to finance,” says Konstantin von Falkenhausen, managing partner at B Capital Partners. “In addition, there are not that many projects that have utility scale and hence [they] are not attractive for large infrastructure funds but rather for lower mid-market funds.”

Safety is also an issue. Scaysbrook argues that it should be the number one priority when investing in battery storage: “Safety is first and foremost to ensure community acceptance. We have seen some setbacks with lithium-based solutions and resulting fire risks.”

He notes that the industry is rapidly moving to overcome these issues by using new chemistries and advanced technology. If such risks can be mitigated, it is likely that battery storage will penetrate the energy market even further.

“Five years from now, we would expect to see a host of different battery storage technologies starting to dominate in specific market and commercial applications where they are best suited,” says Scaysbrook. “This will coincide with technology breakthroughs and further cost declines. The use cases for storage will likely also grow [further, the] more financially compelling the technical solutions become.”