Technical FAQs 4

Can you finance a battery storage project?

Energy can be stored in a number of ways, depending on the source, but the most common is in chemical batteries. In this briefing, we look at some of the considerations for financing battery storage projects. Why chemical batteries? They are easily scalable.

Why is project finance difficult for energy storage?

It has traditionally been difficult to secure project finance for energy storage for two key reasons. Firstly, the nascent nature of energy storage technology means that fixed income lenders and senior debt providers are naturally risk averse.

How does battery storage financing work?

Battery storage financing structures usually involve a greater proportion of equity funding than would be typically seen on a renewables project and a shorter tenor of facility. Cash sweep mechanisms are often seen, to ensure that free cash is used to repay debt.

How can renewables help generating electricity in the UK?

The UK Government has recognised the crucial importance of renewables in generating electricity in its Energy Security Plan, and has announced a raft of measures aimed at improving networks and grid connections, which will hopefully remove some of the hurdles to developing and financing battery storage projects.

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Financing scheme for portable energy storage equipment

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