July 31, 2024
Global Chair of Power & Renewable Energy Eric Pogue was featured in a roundtable feature article on the battery energy storage system (BESS) sector. The Q&A feature discussed the evolution of the industry, market dynamics, how storage deals differ from other renewable energy projects, and projected dealflow, among other topics.
Eric noted how the Inflation Reduction Act (IRA), which focuses on energy investment, helped jumpstart many projects in the BESS sector. “Prior to the IRA, we were seeing a number of co-located solar plus storage projects – the IRA changed this because it allowed standalone storage to take advantage of the tax credits, without the need to qualify via a co-located solar project. Maybe the market was already headed there, but I think the combination of the need for storage, the prices dropping on storage, plus the IRA, has led to a significant uptick in the amount of standalone storage in the market,” he said.
The Q&A feature also addressed a number of topics pertinent to developing and financing BESS projects – including related to supply chain matters, status of the project finance and M&A market for BESS projects and portfolios, and operational and augmentation matters.
Eric also discussed how offtake strategy is something that sets BESS deals apart from other renewable energy deals, noting that “as the market has evolved, including to meet the requirements of tax equity investors and lenders, we are seeing a variety of offtake structures being employed to create stable and predictable cash flows. There is not one kind of offtake structure for storage.”
Read the full article from Power Finance & Risk here (subscription may be required).
Eric noted how the Inflation Reduction Act (IRA), which focuses on energy investment, helped jumpstart many projects in the BESS sector. “Prior to the IRA, we were seeing a number of co-located solar plus storage projects – the IRA changed this because it allowed standalone storage to take advantage of the tax credits, without the need to qualify via a co-located solar project. Maybe the market was already headed there, but I think the combination of the need for storage, the prices dropping on storage, plus the IRA, has led to a significant uptick in the amount of standalone storage in the market,” he said.
The Q&A feature also addressed a number of topics pertinent to developing and financing BESS projects – including related to supply chain matters, status of the project finance and M&A market for BESS projects and portfolios, and operational and augmentation matters.
Eric also discussed how offtake strategy is something that sets BESS deals apart from other renewable energy deals, noting that “as the market has evolved, including to meet the requirements of tax equity investors and lenders, we are seeing a variety of offtake structures being employed to create stable and predictable cash flows. There is not one kind of offtake structure for storage.”
Read the full article from Power Finance & Risk here (subscription may be required).
