- AES 100-megawatt project `showed you could do something big'
- Banks looking for long-term revenue streams on storage
Energy storage may be an emerging technology, but that doesn’t necessarily mean banks and investors are scared of it.
“When you go to the banks, they say, ‘We can get comfortable with the technology,’” John Zahurancik, president of Arlington, Virginia-based AES Energy Storage LLC, said in an interview Tuesday at the Bloomberg New Energy Finance summit in New York. “Nobody wants to be at the back of the bus.”
Banks are looking for long-term assurance that the systems will bring in money, especially long-term contracts. “The revenue certainty is the question,” Zahurancik said. “When there’s more to do, you’ll see financing coming.”
The AES Corp. unit is among the few developers building utility-scale systems. As of early February, it had 384 megawatts of systems in operation, construction or development.
Demand for large storage system is increasing. Utilities in California, Ontario and maybe soon the U.K. will offer long-term contracts to larger projects, including a 100-megawatt project AES is developing in Long Beach, California, with a power purchase agreement with Edison International’s Southern California Edison utility unit.
“It’s showed you can do something big and contracted,” Zahurancik said.
The Long Beach project is expected to be operational in 2020. Zahurancik expects a two-year construction process, so AES will look to close a project financing next year or in 2018.