Financing Battery Energy Storage: Revenue Models, Risk Allocation and Bankability

Abstract

The growing penetration of variable renewable energy sources is increasing the need for flexibility in electricity systems. Battery Energy Storage Systems (BESS) address this need by storing electricity and adjusting their output according to market conditions and grid requirements. However, their development raises a fundamental financial question: how can projects attract long-term financing despite uncertainty surrounding revenues and operational performance? This publication examines the main revenue models, the associated risks and the mechanisms available to improve bankability, using institutional data, commercial agreements and financing transactions, with a section dedicated to the Italian market.