Choosing storage duration with the full economics in view.
A developer needed to compare two-hour and four-hour storage without overstating merchant value or weakening the financing case.
Does the additional revenue from four-hour duration justify the additional capital and financing requirements?
- 01
Connected 8,760 observed hourly prices with dispatch assumptions and a 70% commercial capture factor.
- 02
Compared two-hour / 200 MWh and four-hour / 400 MWh configurations on a consistent cost and revenue basis.
- 03
Built project, debt and equity cash flows, including CFADS, debt-service coverage and downside scenarios.
The reconstructed base case supported retaining two-hour duration unless incremental four-hour revenue could exceed the current merchant-value case. The four-hour CAPEX index increased to 164 while its first-year revenue index reached 150; returns and debt cover weakened.
Anonymised and analytically reconstructed case, not a live investment offer. Financing basis: 55% debt, 6.5% interest and ten-year equal-principal repayment. Figures describe the reconstructed case and are not return forecasts.
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