Energy Storage Project Due Diligence
Fractal provides energy storage project due diligence on projects, portfolios and companies for finance, tax equity or investment purposes. Fractal reviews the technical design, financial performance and commercial terms , while balancing regulatory and legal concerns.
FINANCIAL DUE DILIGENCE
- Evaluate validate proposed ESS project and underlying business model
- Quantify revenue and cost savings achieved with current BESS configuration, sizing, module selection and duty cycle
- Validate duty cycle, SOC requirements and impact to ESS sizing
- Benchmark proposal CAPEX and OPEX
- Explore alternative business models
- Quantify physical and financial impacts of cycle life and calendar life degradation
- Quantify round-trip efficiency due to C Rate, SOC and losses
- Perform sensitivity analysis to de-risk project economics
- Demonstrate technical and financial advantages and disadvantages of ownership options
- Optimize physical and financial design of the project
- Identify areas of concern and fatal flaws
- Provide independent and unbiased clarifications and recommendations
TECHNICAL DUE DILIGENCE
- Review adequacy of proposed design and engineering standards (C rate, chemistry, duty cycle, voltage range, use cases)
- Compare proposed system design versus operational agreement requirements
- Inspect SLD, site design and layout
- Review electrical interconnection requirements, metering and standards
- Review suitability of the O&M program, including scheduled and unscheduled maintenance, spare parts inventory
- Review required maintenance activities during the warranty period, including estimated man-hours, frequency and annual cost
- Review projected system downtime for each maintenance activity including the percentage of system offline and duration of downtime
- Review energy production estimations
- Review auxiliary power estimation
- Review compliance with ITC, RECs, incentives or programs, wholesale market access
- Review EMS experience, functionality, network architecture and response time
- Review compliance with codes, standards and regulations
- Review FAT, SAT and and commissioning plans
- Review project schedule
- Evaluate degradation management strategy (AC vs DC, initial sizing versus augmentation approach)
- Review equipment sizing studies, feasibility studies and electrical engineering studies
- Review HV interconnection design (collector system, generator step-up transformer, protection and control, metering, SCADA)
- Review battery system (battery modules, BMS, enclosure, thermal management system, fire protection system, switchgear, SCADA, metering, battery racks)
- Review balance of system (inverters, medium voltage step-up transformers, switchgear, communications)
- Review compatibility of battery system with BOS
- Review battery system communication diagram
- Examine technical experience of contractor and OEM providers
- Identify areas of cost omission, opportunities for cost reduction and areas of concern
- Identify opportunities for value engineering
COMMERCIAL DUE DILIGENCE
- Review and improve commercial terms and agreements
- Review and improve warranty and performance guarantees
- Battery Warranty and Performance Guarantees (Power, Energy, RTE, COD and Auxiliary Power)
- Construction and Start Up Plans/Tests
- Metering, Annual Testing, Witnessing/Verification
- Insurance, Termination, Default
- Design and Construction Scope Delineation
- Review and improve FAT, SAT, commissioning and performance testing
- Perform (or review) annual testing witnessing/verification
- Operations, Monitoring and Maintenance and Service Level Agreements (SLA)
- System Uptime or Availability Guarantees
- Liability and Liquidated Damages
- Dispute Resolution / Force Majeure
- Milestone Payments, Purchase and Sale