This is a sponsored post by Chair Capital.
The renewable energy sector is at a critical juncture. While wind and solar power continue to be deployed at record-breaking rates, the energy grid faces an escalating challenge - balancing intermittent generation with demand. The key to solving this issue lies in long-duration energy storage (LDES), which provides the flexibility to store and dispatch renewable energy when it is most needed.
Yet, despite its vital role in the energy transition, LDES struggles to secure investment. Unlike short-duration battery storage, which has proven business models and revenue streams, LDES operates on longer timescales, with complex financial modelling, uncertain regulatory frameworks, and evolving market structures. As a result, many investors hesitate, leaving promising storage projects underfunded.
This lack of understanding among financial institutions has led to a major bottleneck in LDES deployment. This has the potential to slow the expansion of renewables, increase grid instability, and make ambitious decarbonization targets harder to reach.
The LDES Investment Challenge
A 2023 report by the Long-Duration Energy Storage Council estimates that between 85 to 140 terawatt-hours (TWh) of LDES will be needed globally by 2040 to enable a net-zero energy system. However, the report also highlights a critical funding gap, with billions in necessary capital yet to be deployed.
Traditional investors remain cautious due to:
Uncertainty in financial modelling: Many financiers rely on short-term power purchase agreements (PPAs) or merchant market structures, which do not align with the long-duration, capital-intensive nature of LDES projects.
Lack of historical performance data: Unlike lithium-ion storage, LDES technologies—such as compressed air, pumped hydro, and thermal storage—often require longer payback periods and do not fit conventional investor models.
Regulatory barriers: Many energy markets are structured around short-term storage rather than grid-stabilizing long-duration systems, making it difficult to forecast revenue.
Underdeveloped market incentives: While some regions (such as the U.S. Inflation Reduction Act) have begun to support LDES, the financial community still lacks confidence in long-term returns.
Why This Matters
The economic case for LDES is clear. According to a 2022 McKinsey report, LDES can reduce system costs by up to 40% compared to grid expansions reliant solely on fossil fuel peaker plants or short-duration batteries. Additionally, BloombergNEF estimates that energy storage deployment needs to expand 15-fold by 2030 to maintain grid reliability as renewables scale up.
Moreover, the demand for LDES is intensifying with the rise of data centers and AI-driven power loads, which are expected to double electricity consumption in key markets over the next decade. Without robust energy storage, these loads will further strain the grid, increasing curtailment of renewables and reliance on fossil fuel backup.
Chair Capital: A Specialist Solution for a Complex Market
While most investors remain on the sidelines, Chair Capital is actively filling this gap. As a specialist investment firm focusing exclusively on energy storage, Chair Capital provides the funding and expertise needed to bring large-scale LDES projects to financial close and commercial operation.
How Chair Capital Solves the LDES Investment Challenge
Chair Capital understands that LDES is not just an energy solution—it is a financial opportunity. The firm’s approach is built on three key pillars:
Targeted Funding for High-Impact Projects
Investment size: £50 million to £800 million
Stage focus: Projects that have secured land and grid connections but need development capital to secure planning approval
Full project funding: Once planning is secured, Chair Capital provides CapEx funding to take projects through construction and operation
Sector-Specific Financial Expertise
Revenue stacking strategies (capacity markets, ancillary services, arbitrage)
Grid stability benefits (reducing congestion, replacing peaker plants)
Long-term commercial viability beyond short-term PPAs
This deep financial modeling capability allows Chair Capital to de-risk investments and offer funding where others hesitate.
A Strategic Partner, Not Just a Capital Provider
Refining business models to ensure commercial success
Aligning with grid operators and regulators to enhance market participation
Leveraging industry partnerships to unlock additional revenue streams
This hands-on approach mitigates risk and accelerates project development, ensuring that LDES projects reach their full potential.
Why LDES Investment Must Scale—Now
The world is at an inflection point in energy storage investment. Without immediate action, grid congestion, renewable curtailment, and volatility in power markets will continue to rise, putting decarbonization efforts at risk.
LDES is the only viable solution to integrate massive amounts of renewables into the grid at scale and at a lower system cost than fossil fuel alternatives. But for this transition to happen, investors need to rethink how they approach energy storage. Chair Capital is proving that LDES can be successfully financed and commercialized - and in doing so, it is helping unlock the future of a resilient, net-zero energy system.
For more information on Chair Capital’s investment strategy visit chair.capital.