It is recognised that flexibility in the electricity system will become increasingly valuable in the coming years as the wider energy transition, including the greater penetration of intermittent, distributed generation and more proactive consumers, across the world progresses.
In the last few years, energy storage has come to the fore as a key sector in providing such flexibility. The commercialisation and wide scale deployment of energy storage seeks to take advantage of the range of revenue streams available to energy storage projects, such as reserve, system services and balancing. There are a variety of business models that create opportunities for investors, funders, generators and developers, including co-location and behind-the-meter / Storage-as-a-Service (SaaS).
Nevertheless, there remain jurisdiction-specific challenges to the full-scale rollout of energy storage, in particular around the future predictability of revenue streams and the wider regulatory regime and the extent of merchant risk that investors can accept.
The energy storage sector will continue to evolve with increasing opportunities in alternative storage technologies to lithium-ion batteries and pumped hydro, such as Compressed Air Energy Storage (CAES) and hydrogen.
This report is one of four supplements, expanding on the findings of our 2018 Connected Future report and our 2017 CMS Infrastructure Index. The 2019 Infrastructure Index will be available at the end of 2019.