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Tom Heintzman: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape. I’m your host, Tom Heintzman. Please join me as we explore today’s most pressing issues with special guests that will give you some new perspectives and help you make sense of what really matters.

Pull Quote (Semih Oztreves): My bet is over the next five years, on a global basis, our sector will deploy about a terawatt of battery storage capacity and on average, you know, somewhere between four to eight hour duration. So four terawatt hours to eight terawatt hours. That’s roughly the size of the US grid in terms of installed power capacity, which is pretty exciting.

Tom Heintzman: Welcome to our multi-part series on the role of electrification in the transition to clean energy. The series highlights the trends and market developments impacting the electrification value chain. Globally, electricity grids are transitioning from centralized one-way systems to more decentralized bi-directional networks. For grid operators, the increasing adoption of renewable resources like wind and solar also raises challenges such as managing intermittency, and grid integration complexity, which impacts system reliability. Enter Battery Energy Storage Systems, or BESS, an advanced technology designed to store and dispatch energy on demand. Grid scale batteries are large battery systems capturing excess electricity generated during periods of low demand or peak production and releasing it when demand peaks, helping to balance supply and demand.

In this episode, we’ll dive deeper into grid scale battery storage’s pivotal role in enhancing grid resilience, the challenges and opportunities facing developers, and the future outlook for the sector. I’m delighted to welcome my guest, Semih Oztreves, Chief Commercial Officer for Zenobē Energy Limited. Zenobe is a UK-based clean energy company that designs, finances, and operates grid [scale], battery storage and electric vehicle infrastructure globally. At Zenobē, Semih leads business development, project development, route to market, commercial and engineering teams for large scale battery storage projects globally. Good morning, Semih, and welcome to the show.

Semih Oztreves: Good morning, Tom. Thanks for having me.

Tom Heintzman: Semih, batteries play and are increasingly playing an important role in the energy transition and Zenobē has built its business around them. Can you provide an overview for our listeners of the different types of battery applications that your business focuses on? And how do they fit together strategically?

Semih Oztreves: At Zenobē, our mission is to make clean power accessible to everyone. So what do we mean by this? It means we need to electrify the consumption of energy first, then we need to make it clean, cheap, and reliable. So we have three business units which directly target these sectors. Our EV business unit, portable power business unit, and network infrastructure business units are key verticals in our business.

So our EV business is focused on electrification of transportation. We help our customers to switch from diesel to electric fleets through designing, delivering, financing and operating large fleets of buses, vans and trucks on behalf of our customers. Our portable power business takes the batteries of our fleets at the end of their usable life, and repurposes them into portable containers to supply power at construction sites and other events. We think this business is going to be very disruptive to traditional diesel generator business. And the business which I sit on, which is our network infrastructure business, where we deploy large scale transmission connected battery storage systems across the network like power plants in the UK, but also increasingly in Germany and US. So the purpose of our projects is to shift clean power generated by wind and solar and offset the gas and coal generation at a lower cost than existing generation. And our large scale battery projects also support the reliability and security of the grid and harden our networks, which is very exciting technology.

So what do we have as a specialty in at Zenobē? The battery is a common denominator across these three business units. We see ourselves as a battery specialist who make sure that battery plays an important role in the energy transition.

Tom Heintzman: Semih, you were discussing the grid scale application of batteries, and sometimes examples help bring a conceptual point to life. Could you tell us about a recent Zenobē BESS project? What challenges you had to overcome, the nature of the system, the size of it, and the benefits that it’s now providing to the grid?

Semih Oztreves: Yes, of course. I mean as recently as beginning of this year, we commissioned a three hundred megawatt, six hundred megawatt hour project in south of Scotland called Kilmarnock South. It’s one of the largest battery storage projects in UK and Europe right now. We have multiple revenues and contracts stack up at this site in order to provide benefits to our consumers. The key application for this asset is to manage grid constraints which are increasing with the growth of renewables in Scotland. This means clean power is going to waste when grid is constrained and we use our battery to import during high renewable generation and when grid is constrained and then export ultimately at a cheaper price to the consumers.

Another service we provide with the battery storage project is capacity market services under a long term agreement with the government for the security of supply. So this product not only provides a grid constraint management by effectively shifting electricity but also security of supply through capacity market. On top of that, one of the innovative services this asset provides is the stability services, which is a one of the new services battery storage provides in the UK and globally. So traditional stability solutions rely on fossil fuels, adding to higher cost and commission provided by traditional gas plants. But with batteries and grid forming technology, we can provide stability services such as inertia, short circuit levels, which support during the grid during the fault situations and also dynamic reactive power, which is again to manage the voltage on the grid and our networks at a fraction of cost and with more reliability.

So our assets, for example, in at Kilmanok South won a ten year contract with national energy system operator here in the UK to deliver these services. And it’s one of the world’s first contracts which ultimately requires these services to the network and the utilization of grid forming inverters.

Tom Heintzman: Semih, many of our listeners are very familiar with the electricity industry, but some less so. And you just introduced maybe a novel concept in that many people would think that the voltage on an on the electricity transmission system would be constant. But in fact it’s fluctuating a lot. And so one of the services that you’re providing is this voltage control to try to even out the voltage. Is that a fair description?

Semih Oztreves: Yes, that’s a fair description.

Tom Heintzman: And also just to put into context, 300 megawatts, that’s a big project. For most Canadian listeners, a large wind farm that you would see would be about 100 megawatts. So think about three, three of those.

Semih, battery energy storage is systems are now proliferating. Here in Ontario, our market operator just procured 640 megawatts of eight-hour capacity. All forms of capacity were entitled to bid on this, including gas fire generation, but battery storage was the least expensive and battery storage proponents won the entire capacity. What have you been seeing in terms of the price of storage and what opportunities does this open up for new markets for the deployment of storage?

Semih Oztreves: Yeah, thanks Tom. In the last two years, battery prices have dropped by more than sixty percent, plus or minus, and the total capex of battery projects dropped about fifty percent. This is because the rest of the capex, like labour, balance of plant, transformers, not experiencing the same cost reductions as batteries, but still overall the capex dropped by fifty percent in the last two years for battery storage projects on a per megawatt hour basis, effectively per each hour duration system. So you can build a four hour system for the price of two hours system from two years ago. That’s very powerful. At the same time, the gas fire generation costs gone up by at least 2X due to high demand from data centers customers. So I’m not surprised by this result. The levelized cost of energy from battery storage is now considerably below gas.

Another factor widely reported is gas turbines are on a four to five year lead times at minimum. Battery storage production, however, is on a six-month lead time. So you know the just the speed to scale and speed to deployment is much faster for battery storage. I think what is interesting is in 2025, something significant structurally happen in battery storage cost. There was a significant oversupply of battery storage capacity and build out in China in anticipation of demand coming from EVs. However, I think the demand didn’t come through from EVs as much as expected. So our sector, the network infrastructure business, benefited significantly from this oversupply and significant pressure on costs for the Chinese supply.

I think this over capacity and oversupply, which is still exists in the market, will remain for the next two, three years. So our view is the CapEx for battery storage is pretty bullish and I think is going to be one of the most competitive technology in the market.

Tom Heintzman: Semih just curious, what will happen or what do you expect will happen after those three years have elapsed? Will battery prices rise because supply and demand will have more matched, or do you think they’ll stay at the same level because of technological development, etc.?

Semih Oztreves: Yeah, no, we see a significant technology development still happening in our sector. So our view is without the oversupply situation, batteries still experience a learning curve and economies of scale. and we are on an exponential growth trajectory right now as a sector. So overall our central view is still price reduction on the battery cost, but maybe not as significant as the last two years, which was unprecedented.

Tom Heintzman: You mentioned technological advancements. Maybe let’s just dig into that a little bit. What do you see coming in terms of the development of batteries? Is it chemistry? Is it intelligent software and AI? What technological advancements you think will be the most important and what impact will this have on your projects and ultimately for your clients?

Semih Oztreves: I think there are couple of key technological advances going on right now. I think I’ll probably name three. So one of them is just simply battery chemistry improvements. I think what we’re seeing coming out of China is sodium batteries. Very very very fast and what sodium batteries represent is long life and a sort of significant amount of supply and abundant raw material. So I think the technology will evolve from LFP based, so iron based chemistry to sodium based chemistry and ultimately continue to drive the cost down.

The second is AI, I think I am pretty excited about the application of AI to trading strategy in merchant markets where batteries play. So for example, UK operates on a real time basis in wholesale markets. And I think a trader with AI capabilities can significantly outplay the rest of the market participant in real time trading based on very soft sophisticated trend analysis and which is not visible to human traders in a traditional sense. And battery storage is a very fast acting technology and asset class. So is a perfectly positioned to take advantage of this kind of very fast decision making capabilities based on the sophisticated trends. We’re seeing some technology companies coming out of US targeting this sector, and speaking to like ourselves around this technology and deployment of technology on a day-to-day trading.

And then finally, grid farming technology is an incredibly exciting technology. I think we’re just in the beginning of it. As we replace conventional coal and gas generators with renewable generation, we’re not only changing where our electricity comes from, but also removing some of the physical characteristics that we have traditionally held in the grid stabilization. So the inverter technology, which I’m not going to go into the technical details, is coming and the market is now educating itself on how this technology can be integrated into network and what we’re seeing is basically UK leading the way on this and the rest of the world is following.

Tom Heintzman: Fascinating. I could have a podcast on each one of those. The first one it’s effectively replacing ions like lithium with salt, which is plentiful. So you could just imagine the impact that that could have on cost if they’re if they perform at an equal rate. And obviously AI and what you’re talking about in the third point is really the restructuring of much of the grid. And the way it operates.

Semih, global battery energy storage development has expanded vastly over the last couple of years. According to the IEA, total capacity additions in 2025 reached 108 gigawatts, up around 40% from 2024. Furthermore, utility scale battery storage accounted for about 87 gigawatts of global battery capacity additions in 2025, around four fifths of the total.

Looking forward, battery storage development seems on track to continue accelerating, but what factors could impact that pace? What’s your outlook for the sector over the next five years and why?

Semih Oztreves: So I’m probably biased in this because obviously I work in this sector and industry, but my outlook is very bullish. So as you said, just last year our sector delivered 87 gigawatts of battery capacity and I think the trend is very strong into this year and the following couple years.

And you do this for utility scale projects, typically a construction period is about two years, so ’26, and ‘27 and most of ’28 is already locked in in terms of the growth and deployment of battery storage and from what we’re seeing it’s only increasing from the existing installed base. My bet is over the next five years, on a global basis, our sector will deploy about a terawatt of battery storage capacity and on average, you know, somewhere between four to eight hour duration. So four terawatt hours to eight terawatt hours ultimately battery storage capacity deployed in in the next five years. That’s roughly the size of the US grid in terms of installed power capacity, which is pretty exciting.

Tom Heintzman: It’s amazing. And any s big swing factors? You mentioned that the pipeline’s already pretty full out to ‘28, but you know, sort of in the ‘29, ‘30, ‘31 factor, are there any factors that could either significantly accelerate it or de accelerate the rollout of batteries?

Semih Oztreves: I think in terms of the tailwinds, you know, the current demand from data center which pushes up the cost and capex for gas and other means of electricity production and generation is already providing a significant kick to our growth and effectively enabling even more acceleration into ‘29, 2030, because the only game in the town right now is battery storage to meet the ever increasing demand from electrification and data center customers.

I think in terms of headwinds, I’ll probably say, you know, geopolitical risk is the number one because the majority of the supply of battery storage comes from China. And there is also a risk element of raw materials, which is why I think majority of the supply chain is moving to now salt based, sodium battery storage in order to mitigate and de-risk the supply chain risk. But in absence of any major geopolitical conflict between major forces, I do see this sector thriving in the next couple of years.

Tom Heintzman: Well, thank you, Semih, for taking the time to join the join the show today. That was fascinating. And thank you to the listeners for tuning in.

Tom Heintzman: Please join us next time as we tackle some of sustainability’s biggest questions, providing you different perspectives to help you move forward. I’m your host, Tom Heintzman, and this is The Sustainability Agenda.

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Future’s so bright (for battery storage), gotta wear shades

CIBC Economics

Tom Heintzman

MD & Vice-Chair, Energy Transition & Sustainability

CIBC Capital Markets

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