How to Develop Battery Storage in Emerging Markets - Ion Ventures

**Ed Porter** (0:00)
I'm your host, Ed Porter. Welcome back to Transmission.
Some countries never built landlines. They went straight to mobile. No legacy system to unwind, no sunk cost to protect. The same opportunity exists in battery energy storage, but getting capital to back it is another matter. Hassen Bali, co-founder and director at Ion Ventures, works at that fault line. Developing battery projects at cross markets at very different stages of readiness. This episode is about the gap between what's technically possible and the steps that grids are willing to take. If this episode gets you asking questions about battery storage development, project pipelines, market structures, what bankability actually looks like in practice, then Ko, Modo Energy's AI analyst, is a great place to dig deeper. Link in the description. Now, let's jump in.
Hi Hassen, welcome to Transmission.

**Hassen Bali** (0:55)
Thanks Ed, great to be here.

**Ed Porter** (0:56)
And as ever, let's start off with, what's one thing that people always get wrong about developing battery storage projects?

**Hassen Bali** (1:03)
With battery storage, I think one of the biggest challenges is you've got to almost decide what your endpoint is before you even start developing a battery. So I think the biggest challenge is, to the extent there are parallels with other renewable energy assets, it's less about purely finding a piece of land, finding a grid connection. You have to also think about what you want that asset to do, what market it's plugging into, how it's going to operate. And essentially, sort of work backwards from that endpoint and factor all of those considerations in from day one, which I think is a slightly different approach to a traditional generator solar project, where it's a bit more straightforward to simply build it, connect it and then get paid to export. There's a lot more to think about in advance with a battery project, mostly because of how you actually operate it commercially.

**Ed Porter** (1:47)
Yeah, the danger of going to the real deep end, I think this is really important, that where you add your battery to the system, what it's actually going to do to help balance the grid, all of that actually really matters. You can't just connect it anywhere and just assume that the revenues will be good enough.

**Hassen Bali** (2:04)
Yeah, absolutely. And I think in part it's how you expect to generate revenue, in part it's how you think the market might evolve over time. There's a lot of conversation right now in UK and other markets of moving to longer duration systems. Plenty of early systems were designed as one or two hour systems and actually now there's a real merit in looking at longer duration. But those are decisions you have to make from day one, in order to be able to do it in real time once the asset is either into construction or operational. So you really need to be thinking quite long term about how you develop your potential project so that it can actually be adapted over time to change your market conditions.

**Ed Porter** (2:40)
So you have that in your mind from day one. You then have land connection.
You're thinking about bringing finance into these projects. When would you be able to say, yes, a project is ready to go? And when would it be too early to really be talking about it publicly?

**Hassen Bali** (2:59)
Yeah, I think our mantra is try not to be too public about what we're doing regardless. And I think that's because it is a long road to get from identifying a potential project to actually being realized, certainly ready to build.
And a lot goes on in the meantime, which can either stall it or potentially derate it all together. I think we're all seeing evidence of that in the UK with connections reform and issues around planning that have happened through COVID, etc.
So I think part of the challenge is understanding that you've got really good design principles, you've got a pretty big funnel, and you're very realistic about how you progress projects from one stage to another. And you use that sort of banked experience of having delivered lots of projects historically to be able to say, we think that these ones are likely to push forward. You then can apportion your effort, your resource, your development expenditure accordingly. And so that's how you sort of get to realize which projects are likely to be ready to build. And in advance of that, to be honest, conversations with investors are probably things you need to be doing all the time.
And to the extent possible, giving the right potential partners sight of how you're progressing so that they can be ready to move with you as your pipeline gets to a level of maturity that starts to require real conversation about which ones are going to get invested into and constructed.