CRA Insights

An update on merchant energy storage: Key investor considerations

November 17, 2021
Solar Panel, Wind Turbines and Li-ion Battery Container

Storage technologies are facilitating the integration of variable renewable energy (VRE) resources and will play an increasingly critical role in the future. Thus far, most storage developments have been utility-owned or backed by long-term contracts, but merchant storage investment opportunities may become more attractive as the markets evolve and investors become comfortable with the value stacking opportunities.

In 2019, CRA published an Insights on quantifying the storage value stack. In this Insights the authors build on that study, with a focus on the major questions investors in the space must address when seeking storage opportunities, including revenue streams, market opportunities for storage, technology, and evolving risks. In a follow-up paper, we will provide an updated perspective on the storage value stack with additional quantitative examples.

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