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Industry Trends: The Battery Show 2025
Naphtal Haya
October 28, 2025
Key points
ESSs offer solutions to challenges in various segments of the grid
The biggest opportunity in energy storage in North America is long duration energy storage (LDES)
Data centers with Front of the meter (FTM) ESS benefit from both cost savings and revenue generation
New financing instruments for ESS scaling include green bonds and infrastructure funds, BESS asset securitization and IRA tax credit transferability
Technology selection criteria make some emerging technologies more competitive than lithium-ion batteries for specific use cases
Improvement in market design, permitting and procurement by utilities and independent system operators (ISOs) are key enablers of faster ESS deployment
Q&A
I had the pleasure of participating in a panel titled “Stationary Energy Storage: Addressing grid challenges and Enabling Renewable Energy“, focused on the role of energy storage systems (ESSs) in the evolving electric grid, at The Battery Show earlier this month.
The conversation was structured around the topics below.
Question #1: Why is stationary energy storage essential for today’s grid, and what challenges are we solving?
Response: Major grid transformation trends in the past decade have included the increase in the variable renewable energy (VRE) share in the grid mix and rise of prosumers (producer-consumer). Energy storage systems (ESSs) solves the following challenges for the main actors:
Actor | Challenge | ESS solution |
|---|---|---|
Utilities | Aging infrastructure High GHG emission rate Increasing VRE share | Deferral of transmission and distribution lines Replacement of peaker plants Energy shifting, ancillary services |
Commercial and industrial (C&I) | High peak demand charges | Peak shaving, participation in energy and ancillary services markets (revenue generation) |
Residential | High real (inflation-adjusted) electricity prices | Self-consumption (cost savings), time-of-use (revenue generation) |
Question #2: What is the single biggest opportunity for energy storage in North America right now, and what is holding us back?
Response: Increasing VRE share in the grid mix is necessitating an increase in the average discharge duration of grid-scale ESS which presents a big opportunity for long duration energy storage (LDES) technologies. Recent lithium-ion battery supply chain risks and more sophisticated technology selection processes also favor the deployment of LDES.
Question #3: Stationary storage is disrupting industries like data centers. Where do you see the clearest financial benefits today, and how can these examples build broader confidence in ESS uptake?
Response: The value of ESS in a data center depends on whether it is situated behind the meter (BTM) or front of the meter (FTM). FTM ESS can yield both cost savings (reduction of demand charge) and revenue generation (by participating in energy and ancillary services markets) which result in a reduction in payback period.
Question #4: Financing and business models are often the hardest part of scaling ESS. What new models or approaches are you seeing that make energy storage projects bankable?
Response: The vertices of an ESS deployment scaling triangle are manufacturing, offtake/demand and project financing. Project financing requires demonstration of a stable cash flow. Traditional financing stack includes equity, debt, tax equity and hedges which are backed by contracted and/or merchant revenue. New financing instruments include securitization of distributed BESS assets (pooling to issue bonds), Green bonds and infrastructure funds and IRA tax credit transferability (eliminates need for a tax equity investor).