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Banks act as advisors rather than simple ATMs
“I think most people think somehow that banks are just there to provide money on tap and it goes a lot more deeper. What we're actually doing is a process that can go many steps and into many dead ends over many months into very wrong streets, but at the end, it will lead out to something that is then financable and doable. We need to be an advisor to the client in that sense that we go together with the client to the off-taker and try to find a solution.”
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Experience counts more than capital volume for scaling
“The really successful and sophisticated investors that we've seen in countries like Germany are those who for a few years only look into batteries as in the technology, try to understand that from an engineering perspective, then they build a very small plant. Once they have that experience, then they say, look, we have a story, we have proven that concept, and we can now go to someone and say, give me a lot of money of that volume that we discussed before.”
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German BESS regulation remains in constant flux
“The problem is not that the process in itself is complex, is that it's still under development. On the grid side, you had regulation in Germany which was an original secondary legislation that is focused on big power plants and that was kind of capturing BESS. Then they just removed BESS from that, and now it is falling on a big Energy Industry Act that was never meant for BESS.”
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Bankability requires process clarity over process simplicity
“Regulatory certainty means you need clarity in something. If you have clarity in your permitting, in your grid, in your offtake, in your project structure, and you're generally happy that this is something that you would put your own money into, then it's a bankable project. It's about the confidence in the processes that underpin that project that's been put in front of you.”
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Capacity markets create revenue risks for existing tolls
“One example that could happen in Germany is that they introduce a capacity market. So let's say you have a tolling agreement in place, capacity market gets introduced, maybe it's mandatory that you participate in that capacity market. You need to think about what happens with your tolling agreement. Do you need to renegotiate with your tolling counterparty? Do you need to find a solution to get compensated or compensate the other party?”