There’s a difference between knowing why energy storage is so useful to integrating wind and solar power into the grid, and being able to prove it to a banker. They’re going to want to know all the details in between, such as: Has anyone ever been paid for performing these tasks? If so, how much? And can we get that price in a 10-year contract?
To be sure, we’ve seen hundreds of megawatts of energy storage bankrolled through utility contracts, as in California, or to serve once-lucrative frequency regulation services, as in the territory of mid-Atlantic grid operator PJM.
But the structures aren’t quite there yet for energy storage to provide the bankable revenue streams that wind and solar project financial backers need to make deals — even if the desire for them is peaking.
“The reality is that storage hasn’t been widely financed yet, and we’re still several years away,” Ravina Advani, managing director of BNP Paribas’ power and infrastructure project finance group, said during a webinar on merchant power trends held Wednesday by the American Council on Renewable Energy (ACORE) and Bloomberg New Energy Finance. “Financing with a renewal asset,” on the other hand, “I think is something the market hasn’t yet seen — but it’s an up-and-coming trend.”
Wednesday’s storage discussion came during a broader overview of merchant power industry trends, from the latest BNEF data on global clean energy investments, to forecasts on solar industry impacts from the Suniva trade case.
But for renewables, the key long-term market trends are the shift from state renewable portfolio standards, power-purchase agreements and renewable energy credits as key drivers, to a world in which corporate investors, community choice aggregators and the Public Utility Regulatory Policies Act (PURPA) are playing a larger role, said Steve Doyon, CEO of Novatus Energy. Energy storage “could help renewables transition to that type of market.”
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