The idea that giant batteries may someday revolutionize electrical grids has long enthralled clean-power advocates and environmentalists. Now it¡¯s attracting bankers with the money to make it happen.
Lenders including Investec PLC, Mitsubishi UFJ Financial Group Inc. and Prudential Financial Inc. are looking to finance large-scale energy-storage projects from California to Germany, marking a coming-of-age moment for the fledgling industry. The systems help utilities solve a long-standing clean-power conundrum: managing the unpredictable output from wind and solar farms, and retaining electricity until it¡¯s needed.
Battery costs have declined 40 percent since 2014 and regulators are mandating storage technology be added to the grid. That¡¯s encouraging utilities to offer longer contracts and developers are expected build $2.5 billion in systems globally this year. These trends are changing the risk profile, giving lenders confidence in batteries in much the same way that power-purchase agreements opened banks¡¯ doors years ago for wind and solar power.
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