Why is energy storage important?

Energy storage can play a key role in reducing costs and increasing revenues both when there is too little electricity available at the right place and the right time, and too much. Over the past decade, the UK government has created a number of incentive schemes and subsidies for the construction and operation of renewable energy projects.

What is energy storage?

Basics of Energy Storage Energy storage refers to resources which can serve as both electrical load by consuming power while charging and electrical generation by releasing power while discharging. Energy storage comes in a variety of forms, including mechanical (e.g., pumped hydro), thermal (e.g., ice/water), and electrochemical (e.g., batteries).

How are energy storage solutions financed?

Although energy storage solutions are often financed on a limited recourse project finance basis, the lending facilities used to finance energy storage solutions can take a variety of forms. Some of the more common facility types include: • Borrowing base facilities. • Asset finance facilities. • Expansion facilities.

Who should oversee energy storage projects?

A qualified professional engineer or firm should always be contracted to oversee any energy storage project. This report was prepared as an account of work sponsored by an agency of the United States Government.

Can a borrower finance an energy storage project?

However, given some of the hurdles facing these projects (such as unproven technology risk and the lack of long-term committed offtake arrangements), a number of factors need to align in a borrower’s favour for it to secure limited or non-recourse project financing to develop an energy storage project.

Do energy storage projects require borrowing base facilities?

Due to the differing periods of contracted revenue under the various offtake agreements entered into by the borrower and therefore the fluctuating nature over time of the cashflows in an energy storage project, some lenders may only be willing to provide borrowing base facilities in respect of energy storage projects.