As per the International Energy Agency (IEA), global BESS capacity was 85 GW (approximately 190 GWh) at the end of 2023 and is expected to reach 400 GW (over 1,200 GWh) by 2030 to enable the seamless grid integration of renewable energy, with the net zero 2050 emissions scenario as a target.
As per McKinsey & Company, the market size of the BESS ecosystem is expected to reach $150 billion by 2030. Thus, blended financing as a financial model should be considered, where public capital can be used as a first-loss capital for BESS projects. This offers private financers the comfort of providing capital at a competitive rate.
Independent BESS projects can be bundled together and issued as green bonds to potential large investors. A partial credit guarantee can be provided by public capital providers to improve the credit ratings of green bonds, which is necessary to attract these low-risk-seeking investors.
Carbon credits earned from BESS projects can be traded in the market at a favourable price. BESS is considered as a “sunshine industry”. Thus, it is important for technology, business, and policy stakeholders to forge a winning partnership to help the global economy leapfrog into a net-zero future.
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