- Established Track Records: Early battery storage projects have demonstrated successful operation, providing lenders with more confidence in the technology’s reliability and performance over time.
- Increased Scale: Projects are scaling up from small capacities (50-100 MW) to larger ones (250-500 MW), making them more attractive for project financing.
- Improved Revenue Models: Despite complex and volatile revenue streams (e.g., capacity markets, wholesale trading, balancing mechanisms), developers are rethinking revenue generation strategies, and lenders are becoming more comfortable with these risks.
- Optimization and Technology: The use of machine learning and partnership with well-established optimizers ensure that battery performance is maximized, providing a clearer path to profitability.
- Robust Project Management Frameworks: Implementing thorough project management, including well-contracted construction plans and strong supply chain management, helps alleviate lender concerns about project viability.
- Supply Chain Stability: Secure relationships with leading suppliers, particularly for critical components like batteries from reliable sources like China, mitigate supply chain risks.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-key-factors-that-have-increased-lender-confidence-in-utility-scale-battery-energy-storage-systems/
