According to the EY Renewable Energy Country Attractiveness Index (RECAI 63) report, there has been a notable increase in global investments in clean energy, reaching $1.8 trillion last year, of which $660 billion went towards renewables. However, the investment still does not reach the COP28 target, which calls for tripling renewable capacity by 2030. Two main challenges that might prevent the required acceleration are high capital expenditures and network congestion.
The study stressed how crucial battery energy storage systems (BESS) are to overcome these obstacles, especially in developed countries where network congestion has become a serious issue. BESS is essential, according to EY, for bolstering and stabilising grid infrastructure and facilitating the connection of more dispersed energy resources. Arnaud de Giovanni, EY Global Renewables Leader, emphasised the significance of scaling up battery energy storage systems (BESS). He noted that expanding BESS capabilities could address various challenges hindering the advancement of clean energy.
According to Giovanni, "Scaling up battery energy storage systems can help solve multiple problems holding up clean energy progress." He outlined four critical areas for investors to concentrate on: constructing a resilient investment case, maintaining competitiveness in technology, establishing optimal business models or financing structures, and mitigating risks in the supply chain.
The RECAI (Renewable Energy Country Attractiveness Index) also introduced a new ranking for global markets based on their appeal for BESS investments. The United States secured the top spot, bolstered by a 30% tax credit under the Inflation Reduction Act. China and the United Kingdom followed closely, benefiting, respectively, from robust government support and advanced energy market frameworks.
Ben Warren, EY RECAI Chief Editor, acknowledged the growing complexity and interest in BESS investments. He observed, "Investor interest in BESS is increasing," and added, "BESS investments require a long-term commitment; they are also highly localised and carry more risk compared to some other clean energy investments."
EY forecasts a significant increase in global BESS deployment from 2023 to 2030, projecting it to grow fourfold to reach 572 GW/1,848 GWh. This underscores the expanding role of energy storage within the dynamic energy sector.
