1
ENERGY STORAGE SYSTEMS • Scenario Planning •
Dear reader,
The Foresight initiative at Ferrovial started-o昀昀 as a
practice that aims to explore plausible long-term
scenarios with the ultimate objective of developing
anticipatory thinking, inculcating strategic 昀氀exibility and
detecting implications and emerging opportunities for
the company. Five projects have been carried out so far
related to developments around the future of Urban
Air Mobility, Hyperloop, Urban Logistics, Connected and
Autonomous Vehicles (CAVs) and now, the evolution of
Long-Duration Energy Storage Systems.
In this most recent edition of scenario planning, the
evolution of long-duration energy storage systems
has been selected as the focal topic. The importance
of energy storage in enabling the energy transition
over the coming years is fundamental and the
close interlinkages between energy security and the
global economic and political landscape cannot
be understated given the current context. How
di昀昀erent technologies are likely to evolve, the role and
con昀椀guration of the energy mix in the coming decades,
and how the expected growth in energy demand
and the increased penetration of VRE will in昀氀uence
the resiliency and adaptation of the grid, are major
questions surrounding the future energy storage. The
overarching objective of this exercise is to increase
awareness externally and within Ferrovial, around
energy storage systems to embrace this changing
context. This exercise serves as a periodic re昀氀ection
to sense, detect, and envisage how developments
triggered in the realm of energy storage could help
de昀椀ne and garner traction around strategic actions
that both existing and new players could take to thrive
in the future that lies ahead.
Given the recent developments around this area,
and its implications in the short, medium, and long-
term time horizons, a timeframe of 2035 has been
set for this study. As the market for long duration
energy storage matures and consolidates, and as
the regulations and policies to incentivize these
technologies are developed and implemented over
time, new opportunities spaces are likely to emerge
for participants. Right now, a lot of the opportunities
emerging in the long-duration energy storage systems
are power-centric and utility-scale, with applications
for more than 6 hours of storage duration attracting
a lot of interest from developers and utilities. However,
the regulatory environment is maturing rapidly for
distributed behind-the-meter applications of energy
storage. Building long duration energy storage
with more than 6 hours of storage duration is what
currently developers and utilities are most interested
on, since the capacity of VRE will grow exponentially.
In this context, the role of the regulation is key, as it
not only establishes how and when new projects and
infrastructures will be built, but also drives or modi昀椀es
the dynamics a昀昀ecting project investments.
One of the biggest bene昀椀ts that long-duration
Energy Storage will bring is by providing support
for the flexibility, reliability, and resilience of
the power system. It will help balance current
pledges towards clean and sustainable access to
energy for all while simultaneously reinforcing
our acceleration and commitment towards an
increasingly decarbonized world.
We would like to express our profound gratitude
to all those who have contributed to and provided
their insights for this study-startups, think tanks, ESS
developers, public sector establishments, industry
associations, research institutions and subject matter
experts - whose inputs and insights have enriched
our perspective and provided us with a better
understanding of the intricacies of the ESS landscape.
Thank you!
Foresight Unit
2
ENERGY STORAGE SYSTEMS • Scenario Planning •

INTRODUCTION
Energy storage systems (ESS), refer to a suite of so the con昀椀guration of the grid and its evolution
existing and emerging technologies that facilitate over the coming years will be a major consideration
the capture of energy for use at a later time when in terms of how and where energy storage will be
needed. Speci昀椀cally, storage occurs during times characterized. Additionally, interconnectivity between
when production exceeds consumption and is utilized current non-connected grids at national or regional
at times when consumption exceeds production. level could facilitate the exchange of surplus electricity
ESS presents solutions to some of the most critical thereby reducing dependency on storage. Several
challenges facing the energy transition over the other key questions remain unaddressed in this
coming decades – from modernizing the electric grid context, such as:
in terms of its reliability and resilience; to facilitating
sustainable mobility and providing 昀氀exibility for an • How will the technologies and market for
increasingly diverse electricity generation portfolio. energy storage evolve, mature, and consolidate
over the coming years?
Furthermore, energy storage is inextricably
interlinked with renewable energy* (VRE), as • What new businesses, services and value
its attributes help mitigate intermittency and propositions will emerge?
seasonality associated with solar and wind • How will the ESS regulatory landscape develop,
based generation sources. The penetration in terms of standards, jurisdiction incentives and
of renewable power generation is expected mandates?
to grow exponentially over the coming
years due to their rapidly declining costs • Will any competitive alternatives to renewables
and as countries strive to comply with their and energy storage be commercially ready by 2035?
announced decarbonization commitments, • How will the technologies and market for energy
placing a great emphasis on the role of energy storage evolve, mature, and consolidate over the
storage. coming years?
Today, there exist multitude of energy • What will be the role of the infrastructure
storage technologies (e.g., mechanical, provider in this context and how will the value be
thermal, chemical, and electrochemical), for a captured?
wide array of storage time horizons, ranging
from a few minutes to several weeks. While LDES technologies are still nascent, their
These technologies are in various stages deployment could accelerate rapidly in the next few
of development and deployment, and their years. Putting aside the social bene昀椀ts that ESS would
pertinence in terms of economics, applications inevitably bring with their advent and scale-up, the
and efficiency is varied. As with most things considerations mentioned above provides a rich and
related to the energy sector, this heterogeneity is fascinating set of opportunities as well as strategic
unlikely to be static over the coming years. implications for all players in the energy sector.
Energy storage can be deployed across any stage
of the energy value chain, including at a residential
and community level (behind-the-meter or off-
grid),

*The term renewables in the context of storage, specifically refers to VRE sources of generation and does not include controllable renewable energy sources, such as
dammed hydroelectricity or biomass, or relatively constant sources, such as geothermal power.

3
ENERGY STORAGE SYSTEMS • Scenario Planning •

ENERGY STORAGE
VALUE SYSTEM
The energy storage value system is complex and emergent in nature, involving a number of di昀昀erent stakeholders,
including established incumbents from the power sector as well as new start-ups. As di昀昀erent technologies and
regulations mature, this landscape might experience shifts over the coming years, with the entry of new players or
the de昀椀nition of new roles. The section below provides a summarized overview of the key players involved with the
ESS value system.

Contractors

4
ENERGY STORAGE SYSTEMS • Scenario Planning •
raw material, extraction
and transport
Players within this segment are responsible for ensuring
the extraction, re昀椀ning, trading, and transport of the
building blocks of di昀昀erent energy storage systems.
The supply chain associated with raw material is
complex and fragmented, and depending on the
underlying technology, a number of di昀昀erent types
of materials might be required, whose demand will
grow in a manner correlated with the growth of the
underlying technology. Examples of relevant players
within this space include extraction companies such as
BHP or Rio Tinto, commodities trading 昀椀rms such as
Cargill, Tra昀椀gura, and Glencore, or logistics and freight
companies such as DB Schenker and A.P. Møller Mærsk.
developers
Aside from the development of storage solutions,
competencies are required to bring energy storage
projects to fruition. In this context, project developers
are important stakeholders as they are responsible
for planning and overseeing ESS projects, bringing
together diverse stakeholders, assessing the
feasibility of an undertaking, securing the necessary
funding, and ensuring the necessary regulatory
approvals and permits required to deploy the
project. Within the storage space, relevant players
include NextEra Energy, Jupiter Power, Hecate
Energy, and Daybreak Power, among others.
construction
As a next step, Engineering, Procurement, and
Construction companies leverage their resources,
experience, and industry knowledge to carry out
activities such as front-end engineering and design,
managing the required labor, equipment, and raw
materials, and carrying out construction to commission
and deploy the storage facilities on a turnkey basis.
Examples of companies operating within this space
include Blattner Energy, Burns & McDonnel, etc.
independent power producers
Lastly, owners and operators of energy storage are
comprised of utilities that operate ESS facilities in
conjunction with their generation plants.
However, some operational aspects can also be
outsourced to third parties with domain-speci昀椀c
know-how pertaining to day-to-day operations.
Examples of relevant players within this segment
include Duke Energy, NextEra Energy, Invenergy and
Georgia Power.
storage technology and
subsystem providers
Several 昀椀rms are currently in the process of designing,
developing, manufacturing, and testing di昀昀erent
types of energy storage systems as well as their sub-
components. These storage manufacturers are tasked
with commercializing innovative breakthroughs in
energy storage and collaborate closely with
engineers, commercial, integration, and support teams
working with utilities and other potential customers to
understand and address their energy storage needs.
Currently, these players are generally segmented by their
specialization in specific storage technologies.
Examples of players include: Li-ion battery
manufacturers such as Tesla, Fluent and Hitachi Energy,
Form Energy and Ambri for electrochemical solutions,
Hydrostor and Energy Vault for mechanical storage,
Malta and Rondo specializing in thermal storage, and
Hysilabs, Nproxx for chemical storage solutions.
Power conversion system providers facilitate the
interface between the energy storage facility
and grid and include such firms as Hitachi
Energy. Additionally, some storage technologies
necessitate the control, stabilization, and regulation
of operational temperature within the storage unit
through various forms of heat transfer such as
conduction, convection, and radiation. Some relevant
players within this segment include Honeywell
International (US), Aavid Thermalloy (US), Vertiv (US),
European Thermodynamics (UK), and Laird. Lastly,
system integrators are companies that specialize in
combining heterogeneous component subsystems
for a given storage solution and ensuring that these
subsystems function as a whole. In this context,
their role entails procuring individual components,
assembling the system, and sometimes providing
operational expertise. Players within this segment
include companies such as Dynapower, Panasonic,
and Socomec.
5
 operation, maintenance and
other services
Post-deployment operation and maintenance is
essential to ensure optimum performance of storage
facilities, especially given the long lifespan of most
storage systems. While the need, frequency and
intensity of this activity might vary by technology, most
ESS require some degree of routine and preventive
maintenance to ensure e昀케cient and uninterrupted
operations. This includes companies such as CAMS,
RES, Ideal Energy, and CABAN systems.
Additionally, asset monitoring and process
automation will continue gaining precedence as
the industry evolves and becomes increasingly
standardized. Players in this 昀椀eld include Power
Factors, GreenPowerMonitor by DNV and STEM.
Lastly, for both ESS facilities and electric vehicles,
it will be necessary the provision of recycling and
waste management services, given their expected
degradation over time due to both, frequent cycling,
and age. Players such as Re Cell, Li-Cycle, Elkemm,
Northvolt are currently operating within this space.
users
Energy storage has a wide array of applications
that span across the entire electricity value chain
and can be deployed in both a utility-scale as
well as a behind-the-meter context. Consequently
the users for energy storage are diverse and
can be “prosumers” at the same time. They can
broadly be classi昀椀ed as electricity generators and
utility companies, transmission system operators,
distribution grids & smart grid providers, commercial
and industrial facilities, EV OEMs and suppliers,
communities and residential areas, and service
transport providers.
enabling institutions
Along with the core players in the ESS ecosystem,
several stakeholders play an important role in
facilitating the development of support structures
necessary for energy storage. Regulation is one
of the most important enablers in this context.
Policymakers and governments at the international,
national, or federal, state, and even regional/
local levels, set different types of regulations that
dictate laws and policies within the ESS ecosystem.
While the jurisdiction, authority, and their
mechanisms vary at each level, public incentives,
tax credits, grants, and loan programs are crucial to
increasing ESS deployments. Relevant regulatory
bodies in target markets include Federal Energy
Regulatory Commission (US), Comisión Nacional
de los Mercados y la Competencia (Spain), Energy
Services Regulatory Authority (Portugal), and the
Polskie Sieci Elektroenergetyczne (Poland) and the
EU Commission.
Other key enablers that support the development of
ESS include universities and research institutes such
as MIT, UCLA, CSIC that lead R&D and innovation
pertaining to the topic. Industry associations such
as the Energy Storage Association, European
Association for Storage of Energy, and Long Duration
Energy Storage Council serve as the voice of the
industry and play an important role in developing,
promoting, and lobbying around important topic
of interests on energy storage systems deployment.
Other relevant players include 昀椀nancial institutions
and VCs that facilitate investment and the 昀氀ow of
funds, insurance providers that help with mitigating
project risk, as well as legal and advisory companies
that provide domain-speci昀椀c knowledge on the
subject matter.
6
DRIVERS SHAPING
THE FUTURE OF ESS
Over the course of this exercise, nine main drivers in昀氀uencing the future of energy storage have been identi昀椀ed.
These drivers are the basis of the scenarios that have been developed. For ease of reference, they have been
clustered into four broad categories:
certain drivers (CD)
CD1 - Robustness of Grid Infrastructure
CD2 - Electri昀椀cation and EV evolution
CD3 - Green Incentives
CD4 - Decarbonisation Policies
industrial
This segment constitutes drivers intrinsic to the energy
industry that characterize the industrial context
driving the development of energy storage. One key
driver in this regard is the penetration of VRE into the
energy mix, in terms of installed capacity over the
course of the next 昀椀fteen years. Energy storage and
renewables have a symbiotic relationship given that
ESS help mitigate intermittencies and seasonality.
Given that costs associated with renewable energy
have declined dramatically over the past decade and
that it forms the cornerstone of the energy transition
for most countries over the course of the next decade,
the evolution of this driver will be a key parameter to
gauge the corresponding growth of energy storage to
complement them.
Secondly, today's electricity grid is aging and being
pushed to do more than it was originally designed
to. Its predominantly radial con昀椀guration lacks the
uncertain drivers (ud)
UD1 - Penetration of VRE
UD2 - Levelized Cost of Storage (LCOS)
UD3 - Availability of Dispatchable Alternative
Clean Sources (DACS)
UD4 - ESS Regulation Framework Development
UD5 - Commercial Readiness of Di昀昀erent Storage
Technologies
昀氀exibility and resilience to adapt to an increasingly
heterogenous and complex energy mix. In this context,
the ability of a grid to adapt supply and demand, to
maintain system stability in a cost-e昀昀ective manner
will be of utmost importance over the coming years.
Furthermore, infrastructure and the interconnections
between di昀昀erent regions, states and countries could
dramatically enhance the robustness of the network.
Lastly, the nature of the grid con昀椀guration (centralized
vs. distributed) over the course of the coming years will
also have rami昀椀cations on the applications, scale and
nature of storage required. However, this is likely to
require strong investment in infrastructure, high levels of
inter-country and state collaboration, agility in the pace
of decision-making, and judicious management of the
overall power supply by 2035.
7

technological
Pumped hydro is currently the predominant form of
energy storage that is being utilized across di昀昀erent
countries. Currently, the energy storage system is
comprised of pumped hydro storage. However, this
form of energy storage is at the cusp of saturation
in Europe and the U.S. There are currently myriad
technologies in various stages of development
that can potentially be deployed for either one
or several use cases, and di昀昀er in terms of their
e昀케ciency, cost, and suitability to longer durations vs.
shorter durations of storage. There exists signi昀椀cant
uncertainty on whether we will exist in a future
where multiple technologies coexist, whether they
will be strati昀椀ed in terms of their suitability to speci昀椀c
applications, or whether clear and consolidated
winners will emerge for one or more purposes.
Secondly, there is the potential for a whole new
segment of generation sources to come to the
forefront over the coming decades. These sources
could potentially serve as a clean substitute to
renewable generation and because of the ease
of their dispatchability, reduce reliance on energy
storage. These dispatchable alternatives exist
across a spectrum, from radical alternatives to
improvements that negate the drawbacks of existing
sources. Technologies within this category include
small modular reactors, advancements in carbon
capture and storage, deep geothermal drilling,
green hydrogen electrolyzers for onsite generation
and nuclear fusion. Should any of these becoming
commercial, they have the potential to generate a
total revolution in the industry.
economic & market
The drivers that fall under this category serve to indicate
the competitiveness, maturity, and scalability of the
di昀昀erent energy storage technologies. In this regard a
key parameter is the LCOS, which is a unit of measures
quantifying the discounted cost per unit (KWh or
MWh) of discharged electricity for a given storage
technology and application during its lifetime. The
metric,therefore, accounts for all technical (e昀케ciency
and performance) and economic parameters (CAPEX
and OPEX) a昀昀ecting the lifetime cost of discharging
stored electricity.
As a wide array of storage technologies develop
over the coming years and reach their commercial
competitiveness, the degree of market penetration
of di昀昀erent solution providers will increase, or new
entrants may enter the market. This will drive
competitiveness, the degree of market penetration
of di昀昀erent solution providers will increase, or new
entrants may enter the market. This will drive
scalability and have a direct impact on cost. In this
context, the LCOS evolution will drive the need for
collaboration, the formation of partnerships and
alliances, key capabilities needed, as well as the
degree of di昀昀erentiation required to succeed within
the space.
regulatory
The development of energy storage is impacted
by a wide array of regulatory forces. From speci昀椀c
mechanisms that could either promote (e.g.,
storage mandates) or restrict (e.g. entry barriers
for certain applications) the deployment of energy
storage. The maturity and nature of ESS regulation
evolution over the next thirteen years will be critical
to the growth and scale of ESS deployment, as well
as the adoption of speci昀椀c technologies.
Furthermore, speci昀椀c incentives pertaining to
renewable energy or direct incentives for Energy
Storage in the future will have a direct and profound
effect in speeding up the development and
deployment of different types of energy storage.
There are currently several proposals to introduce
incentives and speci昀椀c tax credits, grants and rebates
for storage providers in the US and Europe. The
speed and scale of their deployment across di昀昀erent
target markets will have wide-ranging implications
on the deployment of energy storage.
Lastly, regulations to decarbonize specific
industrial sectors will have a strong impact on the
future of energy storage. Policies geared towards
using carbon-based energy sources are envisaged
to become increasingly restrictive over the coming
years, and the degree of restrictiveness and speed
of implementation of these policies will be crucial
to monitor. The implications of climate change
could generate immense pressure on public
authorities and industries to transition towards
cleaner more sustainable sources of generation, as
well as technologies (such as Energy Storage) that
promote their incorporation into the electricity mix.
8
ENERGY STORAGE SYSTEMS • Scenario Planning •

2035 SCENARIOS
The following four distinct scenarios have been identified and described in detail in the following section.
The graphical representation below provides a high-level classification and salient characteristics of each scenario
in a summarized format.
Each scenario carries its own unique characteristics, nuances, and an end-state narrative that helps visualize the
possible futures and landscape of Energy Storage Systems by 2035.

SCENARIO OVERVIEW:

+
Let it Flow
· 5X Penetration of VRE compared to 2020
· Decentralization mainly attributed to the volume
· No availability of dispatchable clean sources
Penetration of VRE

Can you feel the Chemistry? The Crop-eration

· 3X Penetration of VRE compared to 2020 · 3X Penetration of VRE compared to 2020
· Availability of Green Hydrogen for onsite generation · No availability of dispatchable alternatives
· Grid configured in a mainly centralised manner · Highest penetration of decentralised generation

The Nuclear Decision

· Incremental increase of Renewables
· Availability of SMRs, Carbon Capture and Fusion
· Highly centralized generation

-
- Development of Storage +
+ Availability of DACS -

The following section describes each scenario in detail, presenting a narrative enables an “immersion” into each
potential future.

9
 SCENARIO 1
LET IT FLOW
abstract
This scenario is characterized by an increase in
renewables by 2035, that is signi昀椀cantly greater
than anticipated (5X compared to 2020).
There are several reasons that have contributed
to this future transpiring. Firstly, most European
and North American nations have followed
through on their commitment following the Paris
Agreement in 2015, and in their endeavour to limit
global warming to well below 2, preferably to 1.5
degrees Celsius, compared to pre-industrial levels.
Secondly, the adverse e昀昀ects of climate change have
accelerated and added further impetus to facilitate
the Global energy transition. Most countries in the
west have replaced traditional, polluting, carbon-
based fuels used for electricity generation, and have
replaced them with cleaner sources. However, due
to the absence of several readily dispatchable clean
alternatives, the most feasible option for countries
was to dramatically increase the penetration,
share and output of Renewable sources of energy
generation (e.g., Wind and Solar). Electri昀椀cation
has also gained traction across other sectors such
as heating and transport, further accelerating the
demand for renewables. Lastly, advancements and
rapid penetration of several emerging technologies
have also added demand-side pressure in increasing
the share of renewables into the mix.
To achieve this ambitious objective, a robust and
coordinated e昀昀ort was put into action by countries,
aimed at increasing the 昀氀exibility of their grids to
dispatch ever-growing share of renewable
generation into the mix. Concurrently, this e昀昀ort
for improving grid 昀氀exibility was also aimed at
ameliorating the need for reducing the intermittency
that is inherently associated with VRE generation.
The way they accomplished this was through the
dispatch of large-scale long-duration Energy
Storage Systems, at scale, for front-of-the-meter
(FTM) applications.
By 2035, few but proven di昀昀erent Energy Storage
Technologies have consolidated and gained strong
foothold in themarket, with few clear winner
semerging within this space. This includes di昀昀erent
types of batteries, gravity storage, compressed air, as
well as hydrogen cells. A combination of technological
advancements, supply chain e昀케ciencies, market
maturity and their corresponding economies of
scale have made the LCOS of these selected energy
storage systems highly competitive with both,
conventional generation, and traditional sources of
storage such as hydropower.
Lastly, considering the strategic implications of
these developments on the economy, regulations
were rapidly established, standardised and
implemented across di昀昀erent states and countries
during the 2020s. These regulations aim to foster the
development of both, renewable energy and ESS,
and have managed to do so using a combination
of 昀椀nancial incentives, tender stipulations and the
simpli昀椀cation of bureaucratic processes. However,
due to the rapidly increasing cost efficiency
associated with most storage technologies, the
market has rapidly moved from a non-merchant
market requiring incentives in the short-term to
a merchant market that is well-established and
highly competitive.
10
narrative 2035
“Spring” from Vivaldi ́s longer composition: “The
Four Seasons”, is one of Rosa Howard’s favourite
musical pieces, and nearly 300 years later, the timing
could not be better as it played in the background,
amplifying the soft ambiance of her home. It
perfectly captures the season’s mood with chirping
birds, murmuring streams, and caressing breezes in
its musical notes. Its 2035 and Spring had arrived
early in California.
The variability amongst the seasons and their
degree of intensity has been changing from year to
year, partly due to the accelerating e昀昀ects of climate
change, but Rosa believes that the worst has been
avoided. She had to. She had sacri昀椀ced countless
hours of her life, met thousands of people, delivered
dozens of pitches, and put of innumerable 昀椀res, in her
quest to be amongst one of the leading proponents
of the “new face” of Energy that had emerged over
the last 昀椀fteen years.
Rosa works as the founder and Chief Executive of
EnergyFLOW, one of the largest developers of long-
duration Redox Flow batteries in North America. She
established her company as a start-up in her shared
apartment, shortly after completing her Masters in
Mechanical Engineering from MIT in 2022. While it
all made perfect sense in hindsight, her decision to
embark on this venture was a highly risky proposition
at that time.
The world was just beginning to recover from the
aftermath of the COVID-19 pandemic and at the
same time was grappling with rising in昀氀ation,
supply chain disruptions and a highly uncertain and
unstable political climate. The price of energy had
escalated dramatically, and countries needed to
diversify their energy mix away from fossil-fuels-based
sources urgently. This occurred for two main reasons.
Firstly, there was a pressing need to inculcate
systemic resilience especially amongst countries that
either had low reserves of fossil fuel or high potential
of renewable energy generation. Secondly, there
was an implicit acknowledgment amongst these
countries that the climate wasn’t going to wait
around for them to sort themselves out. Urgent action
was needed to cap the temperature increase below 2
degrees Celsius by 2050, and they had to act now.
In this context, the stage was perfectly set for Energy
Storage to come to the forefront and drive the dramatic
transformation story that RE has become over the last
thirteen years. Rosa found herself in the right place
at the right time. She would never have imagined
that EnergyFLOW would have become one of the
leading companies and solutions in long duration
energy storage. Her master’s thesis was focused
on improving the discharge rates in Redox Flow
batteries. By integrating a Thermally Regenerative
ElectrochemicalCycle (TREC) into the Flow Battery,
she was able to demonstrate results that showed
enormous potential for long-duration energy storage.
After raising money for an initial R&D and small-
scale pilot, EnergyFLOW was ready to take o昀昀.
The early days were challenging and necessitated
plenty of support and mentoring from her alma
mater. After a series of successful small-scale
demonstrations, she was able to secure both,
funding and a framework agreement to deploy her
storage solution with one of the largest RE generation
companies on the East Coast.
Things began moving fast soon afterwards.
Unbeknownst to her, several start-ups and
established companies were striving to carve out a
name for themselves within the same market space.
As she moved her headquarters to California and
built a solid team around her, she realised that
to succeed, EnergyFLOW would not just have
to be faster to the market, but also ahead of its
competitors in terms of costs. Along with Lithium-ion
batteries, Compressed Air Energy Storage, hydrogen
Cells and Gravity- based storage solutions seemed to
be emerging as viable alternatives.
11
ENERGY STORAGE SYSTEMS • Scenario Planning •

While each technology had their individual
merits and drawbacks, the unprecedented growth of
renewable energy meant that storage was the
need of the hour, and they all had a role to play in
accelerating the energy transition.These technological
developments were accompanied by the swift
and decisive actions from regulatory authorities,
considering the urgency and strategic importance.
Therefore, regulators quickly followed suit and put in
place a robust framework enabling the deployment
and installation of energy storage systems.
Hectares, is complemented with a phase one 880
MW of corresponding capacity of energy storage
that provides up to 15 hours to the grid. The storage
facility is capable of discharging over 500 MWh into
the power grid and can provide stability to the grid
(grid services) and prevent load-shedding blackouts.
Part of the installed capacity has also been reserved
for energy arbitrage and enables her client, the RE
utility, to store surplus energy generated when prices
are low and discharge it back to the grid when they
are high.

With its innovative and ambitious policies and
aggressive mandates, California has set the
perfect environment for the deployment of long
duration ESS. Tenders for all new renewable energy
generation facilities stipulate minimum storage
requirements of two hours or greater with incentives
increasing proportionately to installed storage
facilities. Bureaucratic hurdles have been overcome
by streamlining procedures associated with permits
and approvals, and the turnaround time for a
response from competent authorities has been
reduced from months to weeks or even days.
Given the favourable regulatory environment,
Rosa could focus her energies on establishing
agreements, partnerships and strategic alliances with
synergistic players that would propel EnergyFLOW to
the market at speed and stay ahead of competitors.
Consequently, she joined forces with component
manufacturers to ensure readily available parts in
line with her design speci昀椀cations. She put in place
purchase agreements with diversi昀椀ed suppliers in
South Africa and China to ensure the reliability of the
supply of Vanadium and other raw materials. Lastly,
she brought on board a large infrastructure company
with the technical know-how and engineering
capabilities to deploy her solution at scale.
As Rosa left her suburban home and entered her
electric driverless taxi, Vivaldi’s “Spring” continued
playing as the car synchronised seamlessly with her
home device, which was being controlled through
her phone. She mused at how the song remained
timeless, even after 300 years, but other things can
change so quickly. Re昀氀ecting deeper and on her own
life, she realized that the reasons leading upto the
current state of play were around her all these years.
Several large combined, storage and RE generation
facilities, with similar characteristics have been
deployed across the country in recent years.
This revolution has been widely touted as a
major success story in the media, widely accepted as
“bound to happen” and with several pundits having
their share of “I told you so” moments. But why did
renewables grow so dramatically within such a short
space? What were the underlying causes?

Rosa’s introspection was brie昀氀y interrupted as her

phone lit up with a noti昀椀cation. Her electric, fully
autonomous, Uber was just around the corner to pick
her up. Rosa had been invited to the inauguration
of one of the largest Renewable Energy plants
in the West Coast, that represented the biggest
utility- scale deployment of EnergyFLOW’s long-
duration solutions to dateThe Sonne Solar Park is
located in the desert just over the Cuyamaca
Rancho State Park, a short drive away from San Diego.
The 1.7 GW solar PV installation, spread over 4700

12
While part of the growth in RE over the past years pressing need to simultaneously decarbonize, most
could be attributed to external factors such as climate countries bet on renewable energy as the winning
change and the quest to reduce energy dependency, horse, and the bet paid o昀昀. Handsomely. To Rosa, the
some of it was demand-driven as well. The Sonne Solar Park was symbolic of how far we’ve come.
continued growth of massive urban agglomerations, As she arrives at the facility, she could see the vast
the transition to increasingly electri昀椀ed powertrains expanse of PV panels shimmer in the bright California
across several transport modes and the acceleration sun and rows upon rows of batteries stretching out
of services underpinned by disruptive technology into the horizon.
development also had a large role to play in shaping
the new reality she found herself in 2035. To her, this situation was a manifestation of what
we could achieve if we worked together. Through
In fact, this very trip was a testament to how far she had collaboration, partnerships, harmonization, trust and a
come. She received another noti昀椀cation saying that lot of hard work, we have arrived at a juncture where
based on prevailing weather and tra昀케c conditions, the future looks bright, both literally and 昀椀guratively.
her trip should take about 42 minutes and that she would
be charged 0.00125 Bitcoin for it. The advent of AI-
based predictive algorithms and the spread acceptance
of Bitcoin and other cryptocurrencies have catalysed
the pace of innovation and transformed a multitude of
di昀昀erent industries in recent years. While the consumers
are spoilt for choice, the widespread and rapid rise
of these technologies placed further pressure on
electricity demand since they are quite energy intensive.
Given the lack of dispatchable alternatives and the

13
ENERGY STORAGE SYSTEMS • Scenario Planning •
SCENARIO 2
THE NUCLEAR DECISION
abstract
By 2027, Small Modular Reactors (SMRs) has evolved
to become technically and economically competitive
thanks to the R&D advancements. Because of
these developments, SMRs have consolidated their
position as a manageable generation source in the
energy mix of di昀昀erent countries by 2035.
Current renewable energies, PV and wind, continue
to be an important part of the energy mix. They have
reached levels of cost reduction and efficiencies
that make them competitive at market price
(merchant) although they continue to be non-
dispatchable sources due to their intermittency.
Consequently, different governments have sought
out mechanisms to increase the robustness of the
Grid as renewable energy increases its penetration
in the electrical system, albeit at a much slower
pace than anticipated.
Additionally, there are several energy storage
technologies available for each application.
However, none of them are commercially scalable
and competitive for long-duration storage, due
to their high CAPEX and low e昀케ciency rate. As a
result, renewable generation sources are not easily
dispatchable and there exists a pressing need for
alternative solutions.
The emergence of SMR into the energy mix has
generated great market uncertainty of renewable
generation projects. This has reduced the growth of
new renewable installations to a lower level than
expected. This situation would no longer favor the
development of long-duration Energy Storage
Systems, except for thermal energy storage systems
to make dispatchable this technology and to provide
peak load.
As a consequence, the regulatory landscape for
storage systems remains undeveloped and
heterogeneous across countries, leading to
a signi昀椀cant legal disparity between regulations in
di昀昀erent countries, states, and regions, leading to
ambiguity and lack of standardization. Therefore,
there is great uncertainty surrounding regulation,
further limiting ESS deployment.
Therefore, under this situation, the rate of
development and penetration of long-duration ESS
in the energy systems of di昀昀erent countries has failed
to match the initial forecasts from the beginning of
the 2020s.
14
narrative 2035
Dr Anasagasti woke up early to a cold new
January day in Washington D.C. To him, it was
just another day as he went through the motions
to head to his job at the US Department of Energy
(DOE). While munching on his Avocado and
Tomato toast for breakfast he carefully reviews
his bill for electricity payment.
“21.30 US Dollars. Not bad for a month’s worth
of heavy use” he quietly mused to himself.
Dr. Anasagasti reflected back at the time when
the same level of consumption would set him back
close to 110 US Dollars, not too long ago. Owing to
his central role in the change that has transpired
since, he reminisces his journey with a feeling of
immense contentment.
Dr. Anasagasti works as a nuclear researcher
specializing in applications of nuclear fission
for energy use. He always believed that nuclear
energy was the future, although this ideology
went against the current of popular thinking of his
time. Back in 2022, the prices of fossil sources were
experiencing heavy turbulence, due to the volatile
international political situation. Additionally,
the different alternative technologies were not
competitive enough, despite several incentives
that were put into place by different governments
in EU and North America.
In his native country, Spain, a clear commitment
was already established towards the installation of
renewable energy to 昀椀ght against climate change
and thus comply with the decarbonization policies
established by the Governments. There was very
little change anticipated in the trajectory of his
government’s policies, given that there was no
shortage of sun where he came from.
Upon the advice of his former Director and mentor,
Dr. Camacho, Dr. Anasagasti moved from Spain to
Washington DC to work in the advanced SMR R&D
program at the Deparment of Nucelar Energy.
The underlying rationale was that his prospects to
generate an impact within his 昀椀eld would be greater
if he moved someplace where the investments,
interest and policies were slightly more conducive to
achieve breakthroughs in his area of specialization.
He had in his mind, a clear vision of what he hoped
to achieve and also the main bene昀椀ts associated
with SMRs: from the 昀椀nancial perspective, SMRs
represented an attractive investment option
compared with large nuclear power plants, especially
in merchant (competitive) electricity markets due
to the comparatively lower CAPEX requirements,
the shorter construction duration and the inherent
modularity and scalability of its design. By combining
a simpli昀椀ed design and integrating it across several
SMR modules, the technology was inherently safe
and resulted in a negligible incidence of failure.
But he was also well aware that implementing SMRs
at scale would be no easy task. Legal challenges,
waste management, technology e昀케ciency and
public perception were all potential barriers that
stood in the way of the technology reaching fruition.
However, he focused his e昀昀orts in solving the 昀椀rst two
blocks, with the belief that the other two challenges
would eventually sort themselves out if the main
barriers were overcome. After much e昀昀ort, dedication
sacri昀椀ce and sweat, in the year 2027 he achieved
a major breakthrough by 昀椀nding the key to obtain
a viable SMR solution. By reducing the generation
of waste using high-assay, low-enriched uranium
(HALEU) in his designs, Dr. Anasagasti increased
the safety and reliability of SMR operations to
unprecedented levels.
His discovery sent shockwaves across the market.
Everyone was keen on a piece of the action and
several governments rushed to discuss and
analyze the impact of this technology on di昀昀erent
energy markets, their adjacencies and the relevance
of their own capabilities in the energy landscape of the
future. However, it was not all sunshine and
rainbows, especially in the short-term. There
were two opposing schools of thought that were
predominant within this sphere: the 昀椀rst were the
advocates of implementing SMRs as a source of clean
energy, and the other was keen to continue with
Renewable energy as the primary mechanism in
their 昀椀ght against climate change.
As these debates reached a crescendo, most
fervently in the U.S.A. and within the European
Union, companies planning renewable projects
decided to abandon their pursuits due to the
15
uncertainties that SMRs are likely to generate.This action
produced quite a notable slowdown in the installed
capacity of renewables within the market. This
dependency was further negated by the concurrent
advancement of carbon capture technologies, that
allowed certain fossil fuel-based plants to remain
competitive with a negligible impact on C02 emission.
This wasn’t about one technology over another but
about the shape, nature and con昀椀guration of the
new world order. These debates spilled over to the
political domain, with speci昀椀c parties even stating
their preference of one technology or the other in
their election manifestos. Dr. Anasagasti recalled
the watershed moment in which the future of the
energy industry changed, a session at the World
Energy Council in London in which the matter was
debated between the two politicians with opposing
perspectives. Mrs. Piotrowski (advocate of modular
nuclear energy) and Mr. Troy (advocate of renewable
energy). The session itself was tremendously long,
but there was a moment that tipped the scales in
favor of nuclear energy:
-Mr. Troy: Renewable energy is a no brainer! Not
only are they the cleanest and safest source of
electricity generation that has ever existed, but they
no longer need any type of incentive to be able to
be competitive in almost all the energy markets of
the world.
-Mrs. Piotrowski: While this is true, you have not told
the public the complete story, Mr. Troy. Renewable
energy has indeed reached a very high level of
penetration and competitiveness in just a few years,
and it is also true that they are a necessary part of the
energy mix of di昀昀erent countries, but they continue
to have the same problem they had since the very
beginning, which is that they are non- dispatchable.
There is very 昀椀erce lobbying for storage to remedy
this issue, but none of the several technologies that
have been developed are commercially competitive
in terms of their cost. Furthermore, the regulation
surrounding this currently fragmented and would
take a lot of work to harmonize. On the other hand,
SMR works. It is safe. It 昀椀xes problems that we are
currently facing. So, tell me, why should the taxpayers
incentivize this ine昀케ciency that you propose, when
there are better alternatives available?
-Mr. Troy: Your perspective is myopic. The problem of
dispatchability relating to renewables could be solved
by applying long-duration Energy Storage Systems.
The LCOS in this moment is not competitive but, why
are you discarding it without giving it a fair shot? If
governments continue supporting the development
of the ESS technologies for just a few more years, I
am con昀椀dent that we will see remarkable results
with proven, tested technologies that will generate
millions of jobs.
-Mrs. Piotrowski: the di昀昀erence between us, Mr.
Troy is that you talk about possibilities whereas I
speak facts. There is no guarantee that LDES in
conjunction with Renewable Energy will magically
become competitive with scale. There are currently
several technologies in the market and none of
them are competitive, their LCOS is higher than any
LCOE of a dispatchable source, and even higher
that Co2 capture for gas-combined cycle, which are
giving many fossil plants a second lease of life while
continuing to meet decarbonization objectives. As
things stand, it is not the government’s job to pick
winners and losers.
Similarly, with the SMRs, you have a technology
which is clean and dispatchable that could generate
new market opportunities and just as many jobs.
SMRs could expand the market of nuclear power
applications beyond traditional baseload electricity
provision in a centralized electricity system. So, here
is one 昀椀nal fact for you, Mr. Troy - at a strategic level,
SMRs o昀昀er Governments three distinct but synergistic
market opportunities:
Decarbonizing energy systems: SMRs, at scale, will
help achieve all our decarbonization objectives.
In the electricity sector, SMRs could be considered
as a suitable 昀椀t in terms of reactor size to replace a
subset of retiring coal-昀椀red, gas-昀椀red and traditional
nuclear power plants. The only roadblock here is
speed to market, which I guess is the reason we are
all here today.
16
ENERGY STORAGE SYSTEMS • Scenario Planning •

Complementing the deployment of variable
renewable energy: Let’s get one thing clear, we are
not talking about eliminating RE, just reducing its
primary limitations. In that sense SMRs have inherent
load-following characteristics that make them
capable of operating flexibly in electricity systems
with variable residual loads, such as in regions
pursuing the large penetration of REs. So, they
are not mutually exclusive. Even complementary
I daresay.
carbon capture technologies. One Germany was
onboard, the debate was over. Over the next couple
of years all countries made concentrated e昀昀ort to
communicate the advantages of nuclear energy to
di昀昀erent people, to draft legislation encouraging
its deployment and to change the common public
perception about nuclear energy. SMRs began to
show up in di昀昀erent countries as dispatchable green
energy from 2030 onwards. The ripple became a
waterfall and the rest, as they say, is history.

Facilitating the access of nuclear energy into new At that moment, Dr. Anasagasti's cell phone buzzed,
sectors and regions: SMRs can be deployed in pulling him out of his thoughts. It was just a reminder
remote areas that are not connected to the grid, in to himself that it was his turn to bring breakfast to the
regions with small electricity grids or in regions with o昀케ce that day. With a smile on his face, he left home
limited suitable sites for large nuclear power plants. and got into his electric car to start a new day at the
Large nuclear power plants contribute to baseload research center.
power production primarily within centralized and
interconnected power systems. The development
of low- carbon nuclear energy is more limited,
however, in regions where economic, geographical
and/or grid- related constraints make it more
di昀케cult to construct large nuclear power plants.
Think about the inclusive impact that this could
generate. You want remote communities to have
universal access to clean, safe energy? The solution
is there for the taking!

Dr. Anasagasti, who had the pleasure of witnessing

this event in person was not the only one o昀昀ering Mrs.
Piotrowski as standing ovation after that exchange.
The countries took note. The market took note.
But most importantly, the people took note.

Immediately after the Council, the di昀昀erent countries

understood that SMRs were a safe and viable option
to have a manageable green energy mix and could
be combined with RE and even Fossil Fuels using

17
 SCENARIO 3
THE “CROP-ERATION”
abstract
The continuous cost reduction in PV technology and
domestic batteries over the next thirteen years has
enabled their widespread adoption in homes and
industries as a dispatchable option for electricity
generation. Consequently, in this scenario, distributed
generation has grown at an aggressive rate, far
greater than that anticipated by the government and
industry. The installation and widespread adoption
of Smart Grids to unite di昀昀erent, small-scale energy
generators have allowed for the optimization of
electricity production and consumption.
However, centralized generation continues to
represent the majority of electricity generation in
countries and renewable energy continues to be an
important part of the energy mix. Despite bene昀椀ting
from the declining costs of PV and batteries, large-
scale and long-duration front-of-the-meter (FTM)
energy storage solutions still depend on incentives
from the government in order to remain competitive
with other sources of generation.
Given the situation, the regulatory authorities have
enacted di昀昀erent economic and 昀椀scal incentives to
enable this installation. These incentives apply to
both front-of-the-meter (FTM) and behind-the-
meter (Distributed Generation) storage, although
the type of incentives and their mechanism of
implementation is di昀昀erent from each other. For FTM
applications, the incentives only apply to selected
commercial technologies, as other technologies
remain in either late stages of R&D or di昀昀erent levels
of pilot testing.
This does not imply that the development of long-
duration Energy Storage Systems will stop, but rather
it will not grow at the same rate as initially anticipated
by many. This reality, combined with the absence
of other clean dispatchable alternatives has led to
a huge proliferation of distributed RE generation
giving rise to the development and installation of
Smart grids. The electri昀椀cation of the transport
sector has provided impetus to this development
as electric vehicles become increasingly utilized for
Vehicle to Grid (V2G) applications, where renewable
energy, electric vehicles, and BTM batteries are
used in conjunction to balance demand and supply
and provide stability and reliability to the grids at a
distributed level.
narrative 2035
Matt and Tia live in Cookeville, a small town in
Tennessee and like dozens of families in their town,
they too, work as wheat farmers. They’ve grown
up around crop farms all their lives and live on
their ranch, which is the main source of sustenance
for them and their children. Being a small-scale
producer, they sell their wheat and derivative
products (e.g., cereals) in and around the city
and rely heavily on their quality to price ratio to
differentiate themselves from their competitors.
They are up early in the morning to take their
monthly trip down to the local market and stock-
up on supplies and groceries. The shopping trip
serves as good excuse to escape the chores, say
hello to their friends in town and sample new local
products that are for sale every month.
18
As they stroll down the aisles, they make it a point to
pass by the cereals section, where their products are
usually sold. Today however, Tia notices that there
are many cartons of their own cereals on the shelves.
Much more so than any of the other brands. They
decided to investigate what’s going on and discovered
that the other brands are selling their products at a
much lower price compared to others. This came as a
major surprise to them, since until a month ago, their
prices were exactly the same. As they headed back
to their ranch after shopping, they began noticing
changes in the surrounding landscape.
-Matt: “Have you noticed how the 昀椀elds of Lavender
and Wheat are becoming increasingly peppered
with windmills and solar panels? Last month we saw
a couple of them, but I can swear its more this time
around. I wonder if there’s a connection between this
and the unsold cartons from earlier today”.
After a restless night, Tia and Matt are up early next
morning to 昀椀gure out what’s going on. They spoke to
a few neighbors, looked at their costs and researched
online on any new breakthroughs that might have
occurred in the agriculture sector. It didn’t take them
long. They quickly zeroed in on the costs as a plausible
explanation. When analyzing the costs, they saw
that the cost of electricity represented a major item
across several key business activities such as lighting,
water pumping, cleaning, and disinfection, freezing,
refrigeration, electrical devices for food processing
and mobile equipment. Matt and Tia were contracted
with their local utility provider, and despite many
assurances from them of a昀昀ordable prices, they were
still paying quite a fair bit.
However, during this moment of re昀氀ection, Matt
remembered a conversation with his close friend
Richard, also a farmer, about an uptick in the
use of solar panels and storage as cost-saving
mechanisms. He knew that Richard was planning
on installing PV panels in his ranch and decided to
pay him a visit. After exchanging pleasantries, they
updated Richard about the situation they found
themselves in, the options that they were considering
and asked him if he had any thoughts on the issue.
- Richard: I’m glad that you brought this up as I
had intended to remind you about it the next time
we spoke. I’ve already gone ahead and installed PV
panels at my ranch. The bene昀椀ts are immediate,
and it is very easy to implement. Two months ago,
me and my wife, Hillary, decided to make ourselves
independent from the grid. They’ve ripped us o昀昀
enough! We did some research and 昀椀gured out
that the utility charged us a much higher price than
what we could get if we started generating our own
electricity. The smart grid is based on a combination
of photovoltaic solar energy and Li-ion batteries. In
addition, if you get an electric vehicle, they manage
and optimize the battery lifecycle to ensure that
energy consumption is optimized, even when the RE
in your grid is not dispatchable.
This sounded extremely interesting to both Matt
and Tia, and upon reaching home, they decided
to replicate what Richard did for their own ranch.
They called their utility company, and after
twenty minutes of waiting, they were 昀椀nally patched
through to a customer service agent. Unsubscribing
was complicated and the agent tried every trick in
the book to dissuade them from leaving their service.
He said that they should think twice before deciding
to change to a distributed generation model, and
although they had a higher price, the utility always
ensured the availability of energy to avoid blackouts.
He also told them that distributed generation had
been on the market for a very short time and that
they, having larger plants, were more reliable.
He also told them that there are government plants
to improve the performance of the central grid in the
future, and that this should hopefully bring down
prices. He even threw in a 5% discount on their
electricity bill for the next three months if they
decided to continue.
The upfront costs of installing a distributed smart
grid were not insigni昀椀cant, although they had
come down dramatically over the past few years.
After much deliberation, they decided to pay Richard
a second visit and see how the smart grid worked
and how it was managed. In fact, Richard mentioned
that with the money that they’ll save from the new
set-up they’ll not only able to lower the price of their
product, but also be able to expand and launch a
new line of products derived from wheat, creating
additional revenue streams.
19
One of the things that caught their attention was
the installation, which was based on PV and small
batteries. Tia, who reads news 昀椀rst thing in the
morning, asked Richard:
- Tia: Richard, I’m confused. How is it possible that
we will pay lower electricity prices by installing our
own smart grid? I have read that the government
is giving incentives to utilities for installing energy
storage? It seems a bit counterintuitive, no?
- Richard: Great question. You are very perceptive,
but surely what you have heard is that the government
is giving aid to Long-term Storage Systems. What
you see here are small batteries, which do not require
any help to be pro昀椀table. Additionally, as you may
have also read, between the di昀昀erent states the
permissive and standardized regulation on storage
systems mainly refers to FTM applications, which
are competitive, only with incentives. This is quite
di昀昀erent to having your own setup installed, which
does not require any regulatory oversight.
As they made their way around the ranch, Matt saw
that both Richard's car and tractors were electric,
and asked Richard about what role they play within
the setup, to which Richard replied:
- Richard: One of the advantages of installing this
Smart Grid in conjunction with an EV, is that the
company that installs and manages it o昀昀ers
you many advantages. For example, it makes it
easier for you to install vehicle chargers. They also
have their own App that, in addition to optimizing
electricity consumption through solar energy and
batteries, also helps you optimize the battery of
electric vehicles and tractors. That, combined with
the surplus battery of the vehicles, can be used as
energy if necessary or be fed back into the grid during
peak hours, in exchange for a small incentive.
After patiently answering several more questions
and showing Matt and Tia the simplicity with which
the smart grid worked, Richard knew that their
doubts and concerns were gradually dispelled. After
returning from the visit, Matt and Tia set into motion
the process to install their own smart grid and
discontinue service with their utility provider. This
time, even the most skilled telemarketer would not
be able to dissuade them despite any fearmongering
from their end, of which there was plenty.
It took them a few good months to get the setup
running and complete the installation process. They
even brought an electric tractor and an electric
vehicle, since their old pickup was well past its due
date. However, once everything was in place, it ran
seamlessly. Everything that Richard told them was
true. The cost savings were real and began bearing
fruit almost immediately. With this decision, they
not only reduced the cost of their home electricity
and wheat production, but also expanded their
business by moving through the value chain from
by manufacturing additional new products (energy
bars, wheat 昀氀our tortillas, etc.), generating new
sources of income. During their monthly trips into
Cookeville, they saw that business was booming
and that their products were 昀氀ying o昀昀 the shelves
once again.
A couple of years had passed by and by 2035, Matt
and Tia witnessed firsthand, how the transition
to decentralized generation had accelerated.
Several businesses in their area had followed a
similar trajectory as them and were all enjoying
the newfound bene昀椀ts of energy independence.
Interestingly, the utility provider had downsized into
a smaller o昀케ce and seemed to be in dire need of
customers, instead of the other way around.
One quiet afternoon, when the sun was practically
setting, the phone rang at the couple's ranch. Tia,
who was near the phone answered the call. To her
surprise, it was the same telemarketer calling to
propose an “exclusive special o昀昀er” with steep
discounts to get them back onboard. Funny how
things change, Tia mused.
After putting him on hold for several minutes, Tia
smiled, and chimed... “Although I appreciate you
reaching out to us with this o昀昀er, thanks, but no
thanks!”.
20
 SCENARIO 4
CAN YOU FEEL THE CHEMISTRY?
abstract
This scenario is characterized by technological
advances in R&D over the next thirteen years, focused
on the a昀昀ordable production of green hydrogen,
with breakthroughs achieved in terms of both
e昀케ciency and the cost. Advancements in electrolysis
have enabled the production of green hydrogen that
is competitive in an industrial context and beginning
its applications in other sector as heavy transport.
By 2035, electrolysis is being widely utilized primarily
to produce green hydrogen on-site, along with other
applications. Due to the technical improvements and
the very versatility of hydrogen as an energy carrier,
for its application in di昀昀erent industries (metallurgy,
fertilizers, etc.), it is being applied in those industries
that are more di昀케cult to decarbonise, due to their
energy intensity.
While renewable energy exists as an important
source of energy generation, its 3X penetration and
cost reductions, have also been utilised to facilitate
the electrolysis process. In this context, it is both an
alternative to hydrogen and an enabler to its on-
site generation at the same time. Long-duration
energy storage, which is mainly used together with
centralized RE generation, is competitive, although
only in selected contexts, due to their high CAPEX
and not very high e昀케ciencies.
The regulations around energy storage have been
well developed, although they are quite restrictive
in terms their stipulations, standards, technologies,
and applications for which they can be deployed.
This has generated some uncertainty as investors
need to be quite selective regarding the type of
long duration storage projects that they will need
to develop.
While hydrogen is mainly used for on-site generation,
electrolysers are also being integrated to the grid
in order to provide other applications (such as
residential heating, storage for electricity generation,
etc.) by 2035. The transition to integrating green
hydrogen has been far from simple, requiring
unprecedented e昀昀orts from governments, industry,
and citizens. Integrating hydrogen is not just about
replacing one type of fuel with another, it is a whole
paradigm shift in the energy systems and how they
are con昀椀gured.
21
narrative 2035

part 1 However, she wanted to see the real impact of her

lucy begins a new adventure work outside the controlled conditions of a Lab.
Nothing about Lucy’s life was conventional up to Witnessing her work manifest into something
that point so the job transition did not come as a concrete would bring her to a full circle in this
big surprise to her. She is a mechanical engineer by professional journey that she had embarked upon
training but works in R&D in the energy sector. Her since her University days. But little did she know that
job entails thinking but she is more of a doer. She more surprises were yet to come.
likes to hit the ground running and take risks with part 2
concrete actions. aleksy needs a saviour
Aleksy Laska, the CEO of Żelazo Steel, paced nervously
It all began with a lecture that Lucy attended back in
in his o昀케ce as he concluded his conference call with a
college titled “Fuels of the Future” by the renowned
recurrent client, Andrew Lewandowski, who works for
Professor Hiroshi Miyamoto where she learnt about
one of the biggest construction companies in Europe.
the energy sector, how it is inextricably interlinked
with almost every facet of industry and society and
-Aleksy: “Let me assure you Mr. Lewandowski, that
the scale of challenges that it is currently facing. But
we are extremely grateful to you as a valuable client,
this wasn’t a “gloom and doom” lecture meant to
and you will never 昀椀nd a better combination of speed,
instil fear. On the contrary, it o昀昀ered her a glimpse of
e昀케ciency and price on your order for steel rebars”.
what was on the horizon in the near future and the
transformative impact that recent advancements in
-Mr. Lewandowski: “I know this is not a usual
the energy sector could potentially have.
order. We need 155 thousand tons of steel rebars
for a very large construction project. We are
This lecture generated a surge of motivation within
counting on Żelazo Steel to deliver this with the best
Lucy, and she impulsively decided to approach
quality and in a timely manner. However, as you
Professor Miyamoto. She didn’t have a speci昀椀c
are aware we are facing increasing pressure from
motive when talking to him but to her surprise when
our shareholders to reduce the carbon footprint
Professor Miyamoto mentioned about an internship
associated with our construction project. Any
opportunity at his R&D Lab, Lucy found herself
decarbonization initiatives that re昀氀ect positively
grabbing it with both hands. The internship soon
on our value chain would surely be rewarded with
became a job, and before she knew it, her job was
repeated business in the future, Mr. Aleksy”.
becoming a career.
Aleksy knew this was coming. It was just a matter of
Her research was mainly focused on improving
time. The decarbonisation policies brought about
e昀케ciencies related to green hydrogen production.
by governments in the EU and North America were
More speci昀椀cally, Lucy focused on overcoming the
becoming increasingly restrictive and were forcing
challenges related to proton-exchange membrane
manufacturers, especially those with a large CO2
electrolysis for power-to-fuel applications in the
footprint, to think ‘outside the box’. Although the
manufacturing sector using PVs or Wind. Her studies
penetration of RE was developing strongly, almost
were not only theoretical, she was also able to
tripling in installed capacity over the past decade,
back up her theories via tangible proof by running
some intermittency issues persisted due to regulatory
small- scale pilots that demonstrated the results of
restrictions around energy storage and cost feasibility
her research. Her results and pilot projects showed
allowing their deployment only in selected contexts.
great promising potential in reducing the levelized
Most regulation surrounding energy storage was
cost of hydrogen (LCOH) by improving using highly
well-established by the 2030s but lacked subsidy
e昀케cient and cheap to produce molecular catalysts
regimes to support ESS providers.
as opposed to conventional noble metal catalysts.
Her research got published in numerous scienti昀椀c
journals and brought her to hold lectures and
conferences about the subject all over the world.
22
Li- ion batteries or Compressed Air Storage, were only
implemented for speci昀椀c use cases and applications,
and did not manage to ameliorate all the intermittency
issues related to renewable generation.
However, these energy storage solutions still
had an important role to play. When utilized in
conjunction with renewable sources, they are pivotal
in facilitating the electrolysis process required to
generate green hydrogen.
Furthermore, his facility which uses a blast furnace
was traditionally very pro昀椀table due to ample supply
of cheap coal in Poland. However, stated pledges
by EU member countries to reduce their emissions
meant that it was getting more and more expensive
by the day to o昀昀set the environmental impact
generated by his facility. Raising prices for customers
was not much of an option either, since his sector
was highly competitive and commoditized so Aleksy
needed to think of another alternative.
His mind starts to drift thinking about how he
could take action. “Maybe we could retrofit blast
furnaces to run on hydrogen and produce it on-
site using an electrolyzer.
As such the recent developments around this
technology seemed to show great promise. However,
the steel industry is quite conservative and slow to
adopt breakthrough innovation. In order to leverage
these opportunities, Aleksy would need to pave the
way for others to follow.
part 3
aleksy and lucy join forces
Soon after the call was scheduled and Lucy was
very excited that her research and small-scale pilots
results generated interest outside the con昀椀nes of a
Lab environment. Aleksy was surprised to 昀椀nd out
how dramatically the cost of hydrogen production
had come down in recent years and the 昀氀exibility
that it provides as a dispatchable alternative to
conventional fuels.
When Aleksy crunched some numbers based on
Lucy’s 昀椀ndings on green hydrogen electrolysis later
that day, his estimations indicated that Żelazo Steel
could make dramatic savings by implementing the
electrolyzer technology developed by Lucy. However,
he had a large order to ful昀椀ll and did not have much
time at hand.
Soon after, he decides to make Lucy an attractive job
o昀昀er that she could not refuse. Like any enterprising
initiatives, the early days were challenging.
With a large order on the horizon, and just few
months to complete the project, the pressure was
immense. This was not another paper, this was not a
presentation, this was not a drill, or a pilot experiment
at small-scale, this was Real. Customers depended
on them, and millions of dollars were at stake.
Finally, the day the electrolyzer went live arrived.
It was powered by a wind farm based in Gdansk.
The electrolyzer built for Żelazo showed high potential
through its compact design, high current density
(meaning higher e昀케ciencies), fast response,and small
footprint.
The outcome exceeded even the most optimistic
industry expectations and made it highly compatible
with o昀昀shore wind parks, grid-independent or grid-
assisted wind and solar hydrogen generation and
especially suited for industrial applications. The blast
furnace, now fully retro昀椀tted to run on hydrogen
would emit clean water-based vapour instead of
polluting CO2.
The operations ran seamlessly, and Żelazo
Steel was able to complete the order on time and
within budget. This was an important moment
since, in 2035, they were one of the first steel
plants to implement and validate the use of
hydrogen for on-site generation, marking a key
moment in the “Greenification” of the sector.
Aleksy was con昀椀dent that this would become the
new industry standard, and others would soon
follow suit. Being the enterprising entrepreneur
he is, he was already thinking of integrating his
electrolyser to the grid and selling surplus on-
site hydrogen produced by his company for other
uses, such as residential heating applications.
Furthermore, he was also thinking of investing
in and refurbishing a nearby cavern to store this
hydrogen, that he plans on subsequently selling to
electricity generators and opening-up new revenue
streams from other businesses than steel production.
23
ENERGY STORAGE SYSTEMS • Scenario
Scenario Planning •

Lucy too was keen to expand on the use of her technology

towards other applications. She knew that hydrogen was
one of the most 昀氀exible forms of clean energy available
and had several applications beyond on-site generation.

She knew that this was only the beginning and that there
would be other industries, sectors, and clients, keen on
adapting and harnessing the power of her technology.

But now, after all these months of work, it was time to celebrate.

24
RELEVANT OPPORTUNITIES
During the course of this exercise, over nineteen
opportunity spaces have been identi昀椀ed from the
four developed scenarios. The degree of attractiveness
of these opportunities di昀昀ers by scenario, which
itself is based on the technological readiness and
penetration of long-duration energy systems, and
other related drivers.
Energy sector is already experiencing considerable
rising in generation from renewable energy sources.
Large amount of new generation will require
additional technologies to improve grid 昀氀exibility.
The rapid development of new technologies in the
energy storage market will present a commensurate
need for obtain-speci昀椀c know-how in order be able to
exploit and market energy storage. Getting involved in
long duration energy storage tech development from
an early stage will enable to obtain an advantageous
position. Some ways in which this can be achieved
will be by investing, acquiring, or entering into
agreements with technology developers, startups
and R&D o昀昀shoots involved with the development of
Energy Storage Systems.
Under a di昀昀erent scenario where variable renewable
energies don’t represent a major percentage in the
energy mix, other technologies may play a relevant
role as DACS and Hydrogen as Carrier.
Speci昀椀c and strong capabilities in project development,
engineering, and construction of Energy Storage
and DACs would be necessary for them to become
commercial at scale. Not only there would be a need
for technological development but also a regulation
that create the market conditions that allows the
participation of these alternative sources.
In scenarios with VRE deployment, new infrastructure
projects related to energy storage systems present
many opportunities and can take di昀昀erent forms
according to the type of technology and project that
is being developed. This include:
Provide EPC of centralized and non-centralized grids
and providing interconnectivity between assets will
enable to provide 昀氀exibility to the energy system
and reduce current intermittencies issues associated
with renewables. Regarding EPC for non-centralized
grids, 昀氀exibility in the energy system could be achieved
by developing and constructing smart grids, including
o昀昀shore interconnectors.
Integrate these solutions to combine them into a
holistic o昀昀ering of RE energy generation, storage
and connectivity (if needed) and o昀昀ering them on
a turnkey basis to the end user.
Deploy of new generation and storage facilities
at scale is likely to create a signi昀椀cant demand for
their operation and maintenance. This will need
to be complemented with solutions to ensure
their safe and sustainable end-of-life disposal.
In this context, services pertaining to the recycling
and remediation of batteries will open up many
opportunities for existing incumbents and emerging
players. Wind turbines, PV panels and batteries for
instance, are expected to grow dramatically due
to their anticipation use in mobility and storage
solutions and might necessitate expert know-how
in logistics, safe disposal, or recycling to give them
a second lease of life.
Planned, preventive and (potentially) predictive
maintenance activities on behalf of utilities and
storage providers will open-up new lines of
services: asset health monitoring, inspection,
outine maintenance activities as well as quality
audits for renewables and di昀昀erent storage facilities.
Lastly, opportunities for system integration, which
entails combining subsystems together and ensuring
that they function seamlessly will continue to gain
traction. This could involve providing the integrated
storage system or being responsible for procuring
individual components (e.g., battery modules/racks,
power conversion systems) and other assets for the
plant from a range of di昀昀erent suppliers, assembling
the system together, integrating the controls and
energy management systems (EMS).
25
In the scenarios characterized by the availability and
competitiveness of alternative dispatchable clean energy
generation sources, the whole value chain for the
EPC and O&M of these alternative sources represent
on their own an opportunity as the ones described
before. For instance, depending on the alternative
technology developed and its feasibility, some
opportunities, for example the retro昀椀tting of thermal
power plants, connectivity of it to the grid, the EPC and
O&M activities or its transportation (e.g. hydrogen),
could be calibrated to o昀昀er this service.
As digitalization progress at an unprecedented pace
gaining prominence across every aspect of our lives
and businesses, the need to complement physical
services with digital ones will grow in prominence.
There are multiple opportunities revolving around
providing digital services as well as deploying the
digital infrastructure that will support and/or power
energy storage systems. Complementing physical
energy storage with a suite of digital services will
provide a more e昀케cient, seamless, and experiential
o昀昀ering to the end users. For example, digital services
integrated with ESS could allow users to manage
energy demand and aggregation at the community
level or carry out transactions with the central grid.
Other examples include developing and establishing
a software architecture to carry out di昀昀erent types
of energy transactions that could happen in a
decentralized context. This means selling surplus
energy generated back to the grid and allocating
stored energy capacity to demand hubs based on
real-time information. There also exist opportunities
to create B2C digital solutions combining o昀昀erings
to satisfy needs related to energy management, EV
services, and other mobility services.
26
ENERGY STORAGE SYSTEMS • Scenario Planning •

CONCLUSION
Developments in the ESS space are unfolding and The best way to anticipate the future is to design it
evolving rapidly, creating an increasingly complex yourself. At Ferrovial, we are passionate about shaping
ecosystem with new actors, disrupting the status quo in the future. We understand that transformation is a
the existing value chain, and enabling new opportunities collaborative process and it is impossible to enact
for value creation and redistribution throughout the change in silos, which is why we would love to hear
system. In addition, multiple uncertain drivers are from you. If you are interested to explore this topic
currently in a state of 昀氀ux and can rapidly change the further, collaborating with us on similar initiatives,
trajectory and future of ESS. or would like to know more about the contents of
this document, please feel free to reach out to us.
As the industry develops over the coming years
and new technologies, service o昀昀erings, customer
experiences, and business models are created, a vast
array of new business opportunities will arise, some
of which have been described in the previous sections.
For those companies that get it right, the rewards and
bene昀椀ts are substantial. In order to capture value
from emerging opportunities while mitigating risks,
incumbents and emerging players need to continue
building new capabilities, establish partnerships
and alliances, garner know-how in utilizing
innovative technologies, and position themselves in
speci昀椀c areas in the value chain, executing on new
operational models, and always having customers at
the forefront of any initiative that they design.

Ambition-driven companies that want to play an

active role in shaping the future of this ecosystem
cannot a昀昀ord to adopt a wait-and-watch approach
as the industry consolidates and barriers to entry
are established.

We can achieve great things, let's create the future working together!

27
authors about ferrovial
This scenario planning report has been carried out by the Ferrovial, a leading global infrastructure operator,
Corporate Innovation Department with the participation is committed to developing sustainable solutions. It is a
of Ferrovial's Toll roads, Construction, Airports, Energy member of Spain’s blue-chip IBEX 35 index and is also
Infrastructure and Mobility businesses. included in the Dow Jones Sustainability Index and
FTSE4Good; all its operations are conducted in compliance
about foresight with the principles of the UN Global Compact, which the
Foresight is Ferrovial’s program to anticipate and explore company adopted in 2002.
the future to be ready from the present.
contact
Foresight Unit - Innovation and Digital Strategy
images Ferrovial Corporation S.A.
Drawings © Ferrovial Príncipe de Vergara 135
The image represented in the back cover is property of EnergyDome 28050 Madrid – Spain
© 10/2022. Reproduction prohibited. All rights reserved.
Front cover image credits: Adobe Stock foresight@ferrovial.com
ferrovialforesight.com
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