ENERGY STORAGE
Making Energy Storage “Bankable”
How independent
technical due
diligence accelerates
energy storage fnancing.
TERENCE SCHUYLER and MICHAEL
KLEINBERG, DNV GL
Third party independent engi-
neering and technical due dili-
gence has long been a require-
ment of lenders and developers
for power and infrastructure
project fnancing. Lenders
require project developers to
undertake the necessary risk
management step of providing
independent assessment reports
on the design, engineering,
construction, contracting and
performance predictions for energy infrastructure projects.
This has been the norm throughout the history and evo-
lution of our modern electrical system, whether applied to
coal-fred power, gas turbine or hydroelectric plants. The
ability to fnance and the terms associated with it are direct-
ly linked to the appetite for perceived risk that lenders are
willing to accept.
As more innovative technologies and system architectures raise the possibilities of less expensive, more cost-effective and sustainable ways to produce and distribute
electricity, market growth depends on understanding and
quantifying their associated technical and fnancial risks.
Whether through traditional or creative funding mechanisms, lenders for new and emerging renewable energy projects must ensure that the technologies and project
designs are reliable and robust enough to satisfy the performance and lifetime projections that are integral in the
deal structures they will support.
Early-stage technology is traditionally funded through
cash or owner-operated sources in demonstration projects,
until such time as the technology and projects are deemed
“bankable.” This
process has been
undertaken by
both the wind and
solar industries
in their respective
market growth.
Energy storage
projects have,
until recently, also
followed this trajectory. In the last
fve years lenders have become
more comfortable
Both Technology Evaluations and Independent Engineering reviews include visits to
field to observe the performance of operating systems. Credit: DNV GL.
