LONDON (Reuters) - Softbank Group's 9984.T Vision Fund has made its first foray into energy storage technology with a $110 million investment in Switzerland-based Energy Vault.

FILE PHOTO: The logo of SoftBank Group Corp is seen at the company's headquarters in Tokyo, June 30, 2016. REUTERS/Toru Hanai/File Photo

While many countries are keen to use renewable energy as part of efforts to cut carbon emissions in the fight against climate change, the challenge has been to find a way to store it for later use, particularly overnight or when demand surges.

Inspired by the physics and mechanical engineering used in hydro plants, Energy Vault says its technology enables renewable energy to be stored in 35-ton bricks and delivered as baseload power for less than the cost of fossil fuels at any hour of the day.

Most rival solutions focus on some form of battery storage, be it lithium ion, sodium-sulphur, lead-acid, among others. While costs have been falling - by nearly 40% since 2015 according to Wood Mackenzie - most degrade over time.

“Energy Vault solves a long-standing and complex problem of how to store renewable energy at scale,” Akshay Naheta, managing partner at SoftBank Investment Advisers, said in a statement on Thursday, announcing Vision Fund’s $110 million investment. “Energy Vault is highly complementary to SoftBank’s existing energy portfolio and we are pleased to further the company’s global development.”

Energy Vault launched in late 2018 and has already partnered with Mexican materials company CEMEX and India’s The Tata Power Company as it looks to complete a test phase and then build its first commercially functioning site.

Despite normally investing at a later stage in a company’s development, Softbank believed Energy Vault could scale quickly and potentially not need to do a later funding round, hence the drive to take an early stake, Naheta said.

The potential rewards are large. The global energy storage market is expected to reach 22.2 GW in 2023, from nearly 5 GW at the end of 2018, according to a report in May by data and analytics company GlobalData.

Robert Piconi, chief executive and co-founder of Energy Vault, said despite planning to grow the business country by country, the scale of pent-up global demand for a scaleable solution convinced them to move faster.

“The Vision Fund shares our passion to combat climate change through innovation in energy storage technologies and, with its support as a strategic partner, Energy Vault is well positioned to meet the large and currently unmet demand for sustainable and economical energy storage worldwide,” Piconi said.