US capacity markets create ‘major disconnect’ for LDES financing, says Camelot’s Raafe Khan
AI-summarised brief · reviewed before publication
Raafe Khan, head of energy storage at Camelot Energy Group, told Energy‑Storage.news that U.S. capacity markets systematically undervalue battery duration, creating a “major disconnect” that hampers financing for long‑duration energy storage (LDES). He highlighted three flaws: ELCC accreditation that rewards longer‑duration batteries only marginally, short‑term capacity contracts of one to three years for assets designed for 20‑plus years, and administrative price caps that blunt price signals for high‑duration resources. Khan noted that while data‑center demand is driving an “explosion” of interest in LDES, the market’s structure offers limited revenue pathways, forcing developers to seek vertical integration primarily for risk mitigation rather than profit expansion. He warned that without longer contracts and revised accreditation metrics, scaling 8‑ to 12‑hour BESS will remain financially unattractive.
💡 Why It Matters
- · The current market design throttles investment in the very storage needed to balance renewable growth, risking a supply gap as data‑center loads surge.
