ABO Energy’s Rechtbach Bess project in Germany
Image: Abo Energy
By ESS News
LCOS – The real parameter of profitability
As investors shift their focus from capital expenditure (Capex) to legal storage costs (LCOs)-the costs per MWH stored and dismissed on the lifetime of a project is LCOs become an important indicator of long-term cost-efficiency.
The most important drivers of LCOs are:
- Degradation
- Raster costs and connecting costs
- Route-to-Market (RTM) and Operating and Maintenance (R&M) Costs
At ABO Energy we use advanced modeling and performance garages to stabilize LCOs over 15-20 years, so that costs are guaranteed predictability that meets the expectations of investors.
Tolling is central
T toll agreements win the grip for a good reason: they offer a predictable income flow, shift market risk from the assets owner to the usefulness or trader and make projects more attractive for institutional donors. Although complex and time intensive to negotiate, often take a few months to a year, these similarities are quietly the preferred model for BESS projects of more than 100 MW.
In Germany, Nofar Energy secured € 86.5 million for a storage project of 104.5 MW/209 MWh through a seven -year toll agreement. Meanwhile, in the UK, Gresham House and Octopus Energy Signed a 568 MW/920 MWh, a two -year toll agreement, which strengthens the attraction of structures with fixed price for both developers and investors.
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