Eku Energy says hybrid financing models can unlock fresh investment for battery energy storage projects in the transition to net zero.
Erin Lee, chief financial officer of Eku Energy (pictured), said developers are competing to secure backing to build new storage projects and capture a share of the expanding market for grid services.
She added that de-risking battery storage as an asset class is key to securing finance amid investor uncertainty driven by a shifting policy landscape.
Ms Lee said combining merchant revenues with longer-term contracts can deliver stable returns while retaining upside potential.
“BESS developers are competing to secure the financial backing they need to build and bring new storage projects online with which they can secure their share of the expanding market for energy storage and grid-related services,” said Erin Lee, chief financial officer.
“The answer to the question of securing this finance is in de-risking battery storage as an asset class for investment.”
Eku Energy cited its 10-year tolling agreement with SmartestEnergy for the 99MW/198MWh Ocker Hill project in the West Midlands as an example of a hybrid model.
Ms Lee said the fixed-price tolling deal was the longest of its kind when signed and the first publicly announced debt-financed toll in the UK.
“This long-duration, fixed-price tolling agreement was the longest of its kind when it was signed, and the first publicly announced debt-financed toll in the UK.”
“It provides a credible, scalable model for how battery storage developers can engage with institutional investors and provide regular low-risk returns.”
She said SmartestEnergy’s ownership by Marubeni Corporation shows growing global investor appetite for storage assets supporting renewable supply.
“Our deal with SmartestEnergy shows that battery storage can now be a low-risk asset for investors to buy into with confidence.”
“This innovative hybrid model is breaking new ground in financing for BESS and delivering positive returns for our offtake customers.”