Could Battery Storage Be Your Next Investment?

I have read with interest EY's latest report on the investment opportunities in battery storage technologies. This report is one of many I have seen that highlights that perhaps the focus for achieving net zero in a number of countries already needs to be energy storage rather than energy production.

We already have an abundance of different technologies for generating renewable electricity. Furthermore, many countries have already extensively deployed these systems to a sufficient extent that their power grids are powered by a greater amount of renewable energy than carbon-based energy, or even exclusively by renewable energy when the conditions are right. For example, according to a report from 2023, Norway is already achieving over 98% of its power demand from renewable solutions, Brazil and New Zealand are closing in on 90%, Columbia is at 75%, and Canada and Sweden are at 68%. Furthermore, these numbers improve every year!

What we don't yet have is an affordable abundance of energy storage, and this is a problem since on the days that the conditions are right, these renewable energy production systems can produce an excess of electrical energy that is effectively being wasted, i.e. the potential for electricity production from existing renewable energy sources can some days outstrip demand! To manage this, wind turbines might be turned off, or their blades feathered to reduce their electrical output, or solar panels may be tilted away from the sun. However, if all reliance on carbon technologies is to be eliminated, surely it is better to continue full production and to store that excess production for later use?

Energy storage is already a technology sector that has seen an intense amount of research and development over the last decade and more, but with the approaching net zero target dates no longer being far off, it seems likely that these efforts to improve the energy storage density, and thus the availability of affordable electrical energy storage, are only going to increase. Furthermore, we can expect there to be numerous different solutions for this as such storage can take many forms, including reservoirs for hydro electric, batteries for electric vehicles and electrolysers to extract hydrogen from water, to name a few. However, financing both these developments and the subsequent commercialisation remains the challenge.

We are confident that we will be seeing many new technologies rise to fill this gap in the market - low cost and environmentally friendly energy storage. To get there, investment in the existing technologies, and in the R&D needed to create the new technologies is crucial. Batteries, and presumably both lithium and sodium batteries, will be a large part of this. They improve year on year in terms of their cost of production, recyclability and energy storage density capabilities. These technologies are fascinating to work on and we look forward to helping you protect them so that you can protect your investments.

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