by Brianna Crandall — December 9, 2016 — A new report from Navigant Research examines the issues, key risks, and technology requirements surrounding the project-financing instruments that are emerging in the grid-tied stationary energy storage market for batteries.
According to the report, battery energy storage systems (BESSs) for grid-tied stationary applications are now delivering customer and grid value in a more financially predictable way. In turn, these more predictable revenue flows to BESS projects are creating new energy storage financing asset classes expected to speed the adoption of stationary energy storage technology. By 2025, 84 percent of projects in grid-tied stationary battery energy storage market are expected to be financed by third parties or utilities.
William Tokash, senior research analyst with Navigant Research, explains:
Just as the advent of the solar power purchase agreement was a key driver for the adoption of solar photovoltaics (PV), financing innovation will be a key driver for the adoption of stationary battery energy storage technology. Now that BESSs are delivering grid benefits in ways that can be better defined financially, new financing asset classes are emerging to support new projects.
The evolution of project finance in the energy sector has been instrumental in the development and construction of coal, combined cycle natural gas, and renewable energy generation assets, points out the report. For energy project finance investors to move into the grid-tied stationary battery energy storage sector, the unique risks associated with the operation of BESSs and potential revenue and operating costs need to be understood and quantified.
The report, Financing Advanced Batteries in Stationary Energy Storage, explores the types of project financing instruments that are emerging in the grid-tied stationary energy storage market for batteries. The study examines the issues, including market drivers and challenges, key risks, and technology requirements, related to battery energy storage project financing.
Navigant Research focuses on three battery energy storage financing asset classes: behind-the-meter (BTM) host-controlled projects, BTM utility-controlled projects, and front-of-the-meter (FTM) utility-scale projects. Global forecasts for the size of the grid-tied stationary energy storage market for residential, commercial and industrial, and utility-scale installations are also provided. An Executive Summary of the report is available for free download on the Navigant Research Web site.
