What are battery projects?

Batteries are essential to solving three big challenges in today's energy systems: Reliability, decarbonisation and cost. Reliability is important because it provides fast response services that keep the grid stable including frequency regulation, voltage support, even restarting the grid after an outage, especially in regions that face extreme weather or grid instability. In places like Australia and California, batteries have prevented blackouts and even outperformed gas plants.

Decarbonisation is central to achieving global net zero targets, and battery storage plays a fundamental role in this effort. Solar and wind energy production is inherently variable, making reliable storage systems essential for balancing supply and demand within the grid.

Another significant factor is cost. Since 2010, battery prices have fallen by 90 percent due to advances in battery chemistry and manufacturing. Although cost is not always the primary driver for these projects, lower battery prices can make projects more bankable, enable competition with fossil-fuel-based alternatives, reduce reliance on costly peak demand power plants and increase investor interest.

While there are clear benefits to implementing battery energy storage systems, successful project delivery requires navigating several challenges and making informed decisions at each stage.

One major hurdle lies in the uncertainty around policy, regulation and long-term revenue streams. For a BESS project to succeed, developers and investors need clear, stable regulations to reduce risk and have the confidence to move forward.

Reliable, long-term revenue streams are also essential for securing financing. These might come from sources such as arbitrage, capacity payments and grid services, but all depend on having well-defined market rules in place.

Smart procurement models can help turn supportive policies into real projects. For instance, Ontario's LT2 program, which offers 20-year contracts, reduces financial risk and makes it easier to get storage projects off the ground.

Another key consideration is the selection of technology and commercial models. Not all batteries are created equal; the right choice depends on specific use cases, required storage duration and expected frequency of use. Aligning the battery technology with the commercial model — each with its own varying flexibility, stability and value delivery — is essential for maintaining grid stability and advancing towards net zero goals.

Effective delivery strategies and community engagement also play crucial roles in overcoming project obstacles. Different approaches to project delivery can significantly influence outcomes, and early, meaningful engagement with local communities is crucial to avoid delays and opposition.

Ultimately, the success of BESS projects lies in matching the appropriate technology and commercial approach to the unique demands of each project. With the right combination of technology, delivery strategy, supportive policy, investment and community alignment, cities and utilities can overcome challenges and fully leverage the potential of battery storage in the energy transition.