Energy Storage Financing Solution Unveiled

USQRisk, LLC (USQ), and Ascend Analytics, LLC (Ascend), have collaborated on an alternative risk solution that provides financing for utility-scale energy storage projects.

"This new insurance offering creates greater opportunities for the clean energy industry to gain access to more efficient financing for utility-scale energy storage projects," said USQRisk President Michael Zipper. "Now, institutional investors have a more effective tool to demonstrate revenue certainty and reduce financing risk, thereby expanding the potential for the development of energy storage projects."

By using benchmarking and projection data developed by Ascend, USQ will structure, price, and tailor revenue protection coverage for individual utility-scale energy storage projects. 

"We've seen firsthand how revenue risk is slowing the energy transition. Our new revenue protection insurance offering … gives sophisticated investors like UBS Asset Management an alternative to traditional merchant and tolled battery financings, and is an evolutionary advancement for the industry," said Ascend Analytics Managing Director Adam Hise.

The first-of-its-kind insurance policy, developed for an investment strategy managed by UBS Asset Management's real estate and private markets business, will provide revenue coverage for an Energy Reliability Council of Texas (ERCOT) energy storage project scheduled to commence later this year.

"Unlike other revenue protection mechanisms currently utilized in the energy storage market, this coverage aligns the interests of investors, insurers, and energy storage project stakeholders by providing additional certainties to investors in utility-scale energy storage projects, while preserving financial upside to the project sponsors, said Ken-Ichi Hino, Energy Storage Infrastructure Portfolio Manager, UBS Asset Management. "With this innovative insurance solution, we are able to improve revenue stability across the entire lifecycle of our energy storage assets, and guard against negative energy price fluctuations."

"By creating opportunities for owners to operate assets optimally for their risk-tolerance … our proxy revenue offering meets the needs of clean energy owner/operators, investors and reinsurers alike," said USQRisk Chief Strategy Officer Chris Giuffre. "This product is an innovative tool that investors can use to mitigate their risk while maintaining the benefits of investing new energy technologies."