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What is an EPC agreement for a battery energy storage system?

The negotiation of an engineering, procurement and construction (EPC) agreement for a battery energy storage systems (BESS) project typically surfaces many of the same contractual risk allocation issues that one encounters in the negotiation of an EPC agreement for a solar or wind project.

Does project finance apply to energy storage projects?

The general principles of project finance that apply to the financing of solar and wind projects also apply to energy storage projects. Since the majority of solar projects currently under construction include a storage system, lenders in the project finance markets are willing to finance the construction and cashflows of an energy storage project.

How can EPC companies improve efficiency?

EPC companies can adopt more efficient practices, such as lean construction (for example, optimizing crew sizes and eliminating downtime and wasted effort), prefabrication of major system elements, simplified bidding, and streamlined interconnection processes. Some of these practices will take hold naturally, as companies gain experience.

Does an EPC agreement include a decommissioning plan?

To the extent decommissioning is addressed in the EPC agreement and the obligation allocated to the EPC contractor, a specific decommissioning plan will often be attached as an exhibit to the EPC agreement.

Should energy storage decommissioning plans be flexible?

Given the evolving nature of rules and standards for the decommissioning, disposition and/or recycling of energy storage projects, it is recommended that any such decommissioning plans retain a reasonable degree of flexibility to accommodate potential changes to such rules and standards after the date of execution of the EPC.

Will energy storage save the energy industry?

It’s generation . . . it’s transmission . . . it’s energy storage! The renewable energy industry continues to view energy storage as the superhero that will save it from its greatest problem—intermittent energy production and the resulting grid reliability issues that such intermittent generation engenders.