Stacking value and optimisation are a crucial component in maintaining attractive investment opportunities in battery energy storage, according to a new GridBeyond and Thrive Renewables white paper.
The Managing the potential of batteries in the energy transition paper outlines that, despite significant commercial appetite for energy storage, more can be done to support strategic decision making and ensure maximum returns can be gained by investors on these assets.
An increase in battery supplier investment could overcrowd the market leading to less interest. Because of this, optimisation and stacking value must be be utilised to maintain investor attraction, says the paper.
Storage assets can stack values across different markets with optimisers and use AI and trading capabilities to extract long-term value.
In doing so, this can create further investor confidence and maintain increased investment within the energy storage sector, creating a booming market as the globe ramps up targets to achieve net zero targets.
“We are experiencing very difficult times in the energy sector due to various factors. As we move away from fossil fuels, renewables and storage assets are becoming increasingly relevant,” said Mark Davis, managing director at GridBeyond.
“AI-powered technology becomes crucial to manage storage assets according to company’s strategies and business objective. AI together with a suite of trading services, allow businesses to generate revenues allowing full access-to-market and to the most lucrative balancing services.”
Battery energy storage technologies are a crucial component for the energy transition. Energy storage technologies are the perfect complement to variable energy sources and provide a means to supply captured renewable energy when the grid demand is high.
This allows a continuous transition away from fossil fuel usage and a rapid upscaling in renewable energy generation sources. The battery storage sector is continuing to grow in the UK, with owners and operators seeing their revenues surge in recent months as ancillary services like Dynamic Containment hit record highs.
According to Solar Media Market Research, the UK pipeline of utility-scale battery storage projects has reached 43GW across over 1100 projects.
As such, the next few years could show a major increase in energy storage deployment.
The paper supports this increase in battery storage capacity stating energy storage has grown by 45% but will need to increase significantly to support the decarbonisation of the electricity system by 2050.
A rise in battery energy storage comes with its own issues. There are already worries over supplies of certain critical battery materials, such as cobalt, and these will likely grow with continuing supply chain restrictions and geopolitical concerns.
To mitigate these concerns, a recent collaboration between Faraday and US National Renewable Energy Laboratory (NREL) aims to explore battery material recycling alongside improving collaboration between the US and UK in the advancement of battery energy storage technologies.
“Electrochemical energy storage is one of DOE’s priorities, and collaborative activities have been established between the national laboratories in this area,” commented Peter Green, deputy laboratory director of Science and Technology at NREL.
“An important goal is also to establish a sustainable supply chain for critical materials, such as cobalt, and to establish a lithium battery recycling ecosystem to recover and reintroduce these materials into the battery supply chain.”