PUBLISHER: Guidehouse Insights | PRODUCT CODE: 1386005
PUBLISHER: Guidehouse Insights | PRODUCT CODE: 1386005
Stable Financing Strategies Are Key to Building Successful Battery Storage Projects
This study analyzes the types of construction and monetization contracts prevalent in today's market and the various financing risks associated with them. It provides an analysis of the deal structures and revenue contracts used for major UES and C&I systems such as solar plus storage projects, non-wires alternatives, virtual power plants, and resiliency services. It also explains the various technology, operations, construction, and revenue risks associated with building a battery project and the supporting government incentives. Also included are best practices and contracts utilized by NHOA and Pivot Power in developing their recent battery system projects.
Table of Contents
Spark
Context
Recommendations
Utilities and Industries Are Deploying Battery Energy Storage Systems to Fulfil Capacity Requirements and Resource Adequacy
UES Applications
C&I Battery Storage Applications
Project Owners Are Looking to Minimize Construction Risks through Build-Transfer and Purchase and Sale Agreements
Construction and Development Contract Owners Can Now Enter Project Development Contracts with Greater Control and Minimal Risks
PSA
EPC or Turnkey Contract
Case Study: NHOA Energy's Kwinana Project
BTA
PPAs, Leases, and Merchant Revenue Contracts Offer Various Benefits to Project Owners and Off-Takers in Today's Market
PPAs
Merchant Services
Leases
Tolling Agreements
The Revenue Streams and Deal Structures for UES and C&I Storage Systems Are Evolving Over Time
PPAs and Merchant Revenue Are the Most Preferred Types of Deals for Utility-Scale ESSs
Utility-Scale Solar Plus Storage
IPPs
Integrated NWAs for T&D Asset Optimization
Europe's Ambitious Investments in Grid-Scale Battery Storage Projects
C&I Battery Storage Systems Rely on DR Programs and Ancillary Services Through Wholesale Aggregators to Generate Revenue
Demand Charge Management
VPPs
Resiliency and Backup Services
Understanding Financing Risks and the Existing Regulatory Landscape Increases Project Security
Technology Risks
Case Study: Pivot Power's Hybrid Battery System
Construction Risks
Operating Risks
Revenue Risks
Battery System Owners Are Increasingly Opting for Insurance Solutions to Safeguard Their Investments
Regulatory Landscape, Tax Credits, and Government Incentives
US Incentives
European Incentives
List of Tables
Scale of Projects and Deals in the Utility-Scale Market Segment
Project and Deal Scale in the C&I Market
Range of Monthly Electric Demand Charges Across States ($/kW per Month)
List of Figures
An Illustration of FTM and BTM Battery Storage Systems
Overview of Project Development and Monetization Contracts
Types of Project Development Contracts between Owners and Developers
Deal Structures and Revenue Streams for UES systems
Deal Structures and Revenue Streams in the C&I Segment
