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While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.
According to BloombergNEF (BNEF), more than $262 billion of investment will be needed for stationary energy storage by 2030. BNEF's 2021 Global Energy Storage Outlook projects significant growth in this sector, with Yayoi Sekine, the firm's head of decentralized energy, stating that 'this is the energy storage decade'.
Evaluating potential revenue streams from flexible assets, such as energy storage systems, is not simple. Investors need to consider the various value pools available to a storage asset, including wholesale, grid services, and capacity markets, as well as the inherent volatility of the prices of each (see sidebar, “Glossary”).
The revenue potential of energy storage is often undervalued. Investors could adjust their evaluation approach to get a true estimate—improving profitability and supporting sustainability goals.
Author to whom correspondence should be addressed. This paper assesses the profitability of battery storage systems (BSS) by focusing on the internal rate of return (IRR) as a profitability measure which offers advantages over other frequently used measures, most notably the net present value (NPV).
Multiple requests from the same IP address are counted as one view. This paper assesses the profitability of battery storage systems (BSS) by focusing on the internal rate of return (IRR) as a profitability measure which offers advantages over other frequently used measures, most notably the net present value (NPV).
Internal Rate of Return (IRR) This paper is based on the IRR as a key economic metric for assessing the profitability of investment projects.
We argue in favour of the internal rate of return (IRR) as a preferred method to assess profitability given the advantages over the popular net present value (NPV) and many other frequently used profitability measures.
In a bid to tackle the challenge of the growing electricity production from renewable energy sources, the Polish utility is looking to add more than 10 GWh of energy storage capacity by 2035. Its plans involve more than 80 projects, the value of which is estimated at around PLN 18 billion ($4.7 billion).
With a power output of 262 MW and a storage capacity of around 981 MWh, the facility will be by far the largest battery energy storage facility in Poland and one of the largest in Europe. The contractor on the project will be LG Energy Solution Wrocław.
As Tauron Group's recent €150 million storage tender shows, Poland isn't just catching up – it's positioning itself as Central Europe's battery technology hub. The race is on to develop storage solutions that work as hard as Polish coal miners once did, but with cleaner hands and smarter software. « Pre.:
Due for Q1 2026 completion, this project's 800MWh per site configuration directly addresses Poland's need for long-duration storage solutions beyond typical 4-hour systems. LCP Delta's latest analysis paints a rollercoaster trajectory for Polish BESS deployment : This J-curve reflects the 2-3 year lead time for capacity market projects.
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