Project Financing for Generation Integrated Energy Storage: A U.K. Context

Abstract

Large-scale of intermittent renewables such as wind and solar are used to reduce carbon emission. Energy storage is needed to provide controllability of power flows for the energy system. Specifically, Generation-integrated energy storage (GIES) systems store energy at an instance during the transformation between the primary energy (e.g., kinetic or thermal) form and electricity. The successful deployment of GIES systems requires a financing method to minimize investment risk. This includes identifying the role and interactions between stakeholders. A contract is a legally-binding agreement, which recognizes and governs the duties and rights of the contracting parties (e.g. stakeholders) to the agreement. Despite the importance of contracts, there is a limited amount of literature on project financing and the contractual models for renewable energy projects, in particular for energy storage and GIES systems. Project financing is the long-term financing of infrastructure using the projected cash as collateral. In this paper, the public private partnership (PPP) schemes for financing renewable energy projects are reviewed. This work presents a generic contractual model for the GIES system in the U.K. context. The challenges in contractual agreements between contracting parties are described.