The field of energy storage is on the cusp of a significant transformation, with several factors converging to make it an attractive investment opportunity. According to Stephen Panizza, partner at Federation Asset Management, the investment potential for battery energy storage systems (BESS) exceeds AU$100 billion. Federation Asset Management (FAM) is an early mover in the BESS space, having initially invested in the 150MW/300MWh Riverina and Darlington Point BESS in New South Wales in 2022. The investment was completed via FAM’s Sustainable Australian Real Assets Fund & Federation Alternative Investments II fund. • The investment was a success, with the BESS project being brought online in May 2023 and increasing its capacity by 120MW. • The project is equipped with Tesla Megapacks, which form three separate operating systems co-located adjacent to an existing 333MWp solar PV power plant, connected at the 132kV Darlington Point substation. FAM’s investment in the BESS market is part of its broader strategy to diversify its portfolio and take advantage of emerging trends in the energy sector. The organisation believes that the time is right to branch further into the energy storage market, thanks to significant investment in infrastructure and technological advancements.
| Advantages of BESS | Bullet Points |
|---|---|
| Economic benefits |
• Reduced energy costs • Increased grid stability • Improved energy security |
| Technological advancements |
• Improved energy density • Reduced costs of equipment and structure • Increased efficiency |
The economics for long-duration energy storage (LDES) are beginning to shift favourably in Australia. Previous coverage by Energy-Storage.news found that the economics for LDES are beginning to’shift favourably’, with various factors, including systems’ cost structure, enabling a shift toward LDES on the National Electricity Market (NEM). Elias Saba, Eku Energy’s chief technology officer, noted that the cost of lithium has declined, and improvements in energy density and the cost of general equipment, structure, and supply of storage have contributed to this shift. “Long-duration systems on the NEM have been helped by some of the fundamental economics of storage over the past year or two. We’ve seen a significant decline in the cost of lithium but also generally improvements in energy density and the cost of the general equipment, structure, and supply of storage,” Saba said. This shift toward LDES on the NEM is significant, as it highlights the potential for energy storage to play a key role in addressing energy security concerns in Australia. By providing a reliable source of power, energy storage systems can help to reduce energy costs and increase grid stability. In addition, the investment potential for BESS in Australia exceeds AU$100 billion, making it a lucrative opportunity for investors. FAM’s success in the BESS market demonstrates the potential for investment in this sector to drive economic growth and improve energy security. The success of FAM’s BESS investment is a testament to the growing importance of energy storage in the Australian energy sector. As the demand for renewable energy continues to grow, energy storage will play an increasingly important role in ensuring a reliable and stable energy supply.
“Energy storage is a large-scale investment opportunity with attractive risk-return characteristics,” said Stephen Panizza, partner at Federation Asset Management.
Key highlights:
- Investment potential for BESS exceeds AU$100 billion
- Economics for LDES are beginning to shift favourably
- Technological advancements are driving improvements in energy density and cost
- Energy storage is a key component of addressing energy security concerns
Battery Energy Storage Systems (BESS): A system that uses batteries to store energy for later use, often used in conjunction with renewable energy sources to stabilize the grid and provide a reliable source of power.
Long-Duration Energy Storage (LDES): A type of energy storage that can store energy for extended periods of time, often used to stabilize the grid and provide a reliable source of power during periods of high demand. The future of energy storage looks promising, with significant investment and technological advancements driving improvements in energy density and cost.
Investment Opportunities
There are several investment opportunities available in the energy storage market, including:
- Federation Asset Management’s Sustainable Australian Real Assets Fund & Federation Alternative Investments II fund
- Eku Energy’s investment in LDES on the NEM
- Australia’s renewable energy sector, which is expected to continue growing in the coming years
In conclusion, the investment opportunity for BESS in Australia exceeds AU$100 billion, making it a lucrative opportunity for investors.
