By Naphtal Haya, LDES Practice Lead, DNV
As the worldwide contribution of renewables to electricity generation grows, emerging long duration energy storage (LDES) offers a viable way to address the energy trilemma: equity (affordability and accessibility), sustainability and security. For this article, I define Emerging LDES as:
⦁ Energy storage system (ESS) technologies designed for discharge durations greater than or equal to 8 hours at rated power
⦁ Excluding mature incumbent technologies such as pumped hydro storage and lithium-ion batteries
However, the great promise of solving the energy trilemma will remain just that unless these technologies achieve scale. Mainstream market adoption requires a bankable product, company, and project. Project bankability considers four major risk items, namely technology, revenue, construction and operating risks. These risk factors determine the cost of equity and debt financing. Financiers and project developers use several tools to determine whether a project’s investment opportunity outweighs the risk, which I examine below. The Technology Bankability index (TBI), developed by the LDES Bankability Bridge initiative, is a composite score that tracks the commercialization progress of Emerging LDES technology providers. In essence, TBI is inversely proportional to the technology risk premium applied in investment or debt underwriting.
The three components of TBI are:
⦁ Deployment maturity index (DMI): proof of scale, robustness, repeatability and commercial traction
⦁ Independent validation index (IVI): proof of credibility
⦁ Performance assurance index (PAI): proof of performance risk transfer
Deployment Maturity Index
The Deployment Maturity Index (DMI) measures deployed capacity and manufacturing capacity of an Emerging LDES technology provider. Deployed capacity is the backward-looking component consisting of operational capacity (operational projects) and contracted capacity (projects at notice to proceed (NTP), financial close, construction or commissioning). Projects under development are considered too speculative to be a reliable indicator.
For each category of projects, three metrics - nameplate capacity (scale of adoption), geographical distribution (robustness across environments) and project count (repeatability and customer diversity) - are scored. Overall, the three factors answer the following questions:
⦁ Nameplate capacity: Has the product(s) moved beyond pilot size?
⦁ Geographical distribution: Does the product(s) work in different grids, climates, and regulatory jurisdictions?
⦁ Project count: Is this a one-off success or a repeatable deployment?
Operational capacity is derived from nameplate capacity by applying a fleetwide availability factor.
Manufacturing capacity is the forward-looking element of DMI and a scaling index that captures the ability of the technology provider to meet short-term demand. Given the typical large investment required to develop and construct a technology provider’s active annual production capacity, achieved annual manufacturing capacity is a good proxy for a technology provider’s demand.
Independent Validation Index
The Independent Validation Index (IVI) measures the extent to which a product has been technically evaluated by an impartial organization. These evaluations often take the form of independent engineering (IE) reports used to support investment decisions and are produced by reputable third-party organizations with relevant subject matter expertise. Fundamentally, IVI serves as the quality layer of DMI answering questions on product architecture, product history, safety, performance, serviceability, reliability and other lifecycle considerations. These reports are critical inputs to the underwriting processes of risk transfer instruments and financing packages. While currently treated as a binary item (present or absent), IVI can be improved by accounting for the year of publication, level of detail in the report, and even the reputation of the authors.
Performance Assurance Index
The Performance Assurance Index (PAI) measures the strength of risk transfer which mitigates the risk of insolvency, thus increasing the value of product performance guarantees. PAI ensures performance guarantees have a reliable financial backstop typically through a technology provider’s corporate balance sheet or technology performance insurance, which can be useful for early-stage technology providers whose balance sheet strength cannot meet necessary creditworthiness thresholds. PAI can be made more robust by taking the policy’s coverage term into consideration.
Formula and Interpretation
DMI combines the above factors into a weighted logarithmic function normalized to a 0-100% range. Logarithmic scaling is used to reflect diminishing marginal validation, that is, each additional unit of validation provides less incremental certainty than the one before it. IVI and PAI are Boolean functions with adjustments for the aforementioned factors. DMI, IVI and PAI are converted into TBI through weights aggregated from responses submitted by project developers, independent power producers, and financiers.
Where a, b and c are co-efficients between 0 and 1.
TBI is scored on a 0-100% scale across 5 major bankability stages: demonstration, early adoption (first of a kind [FOAK]), early replication (nth of a kind [NOAK]), financeable and infrastructure-grade. As commercialization does not progress linearly, the width of the score band increases at more mature stages.
Conclusion
Armed with TBI results, developers and financiers can confidently understand the maturity of a technology and make decisions based on solid evidence. In the end, this systematic way of evaluating technologies will lead to a more robust industry, where bankable projects will move forward.
Additional Resources
Emerging LDES Bankability Bridge Q3 report: Emerging LDES Bankability Bridge Q3 2026
DNV’ technology review framework: DNV-RP-A203 Technology Qualification
Overview of DNV’s technical due diligence services
DNV’s Energy Storage services
DNV’s Energy Transition Outlook 2026
About the Author
Naphtal Haya is a consultant and the LDES Practice Lead at DNV, a leading engineering consulting firm providing advisory and due diligence services to the renewables and energy storage industries globally. He holds a Bachelor of Science degree in bioengineering from Harvard University, has research background in organic flow batteries and is the coordinator of the LDES Bankability Bridge initiative.
Latest News
