Battery storage investment in Europe now depends less on whether the revenue exists and more on how it gets financed. With Italy's first MACSE auction won largely by a single player while Germany's fully merchant market is pushing lenders towards shorter, tighter debt, investors have to work out what makes a battery project bankable without a long-term contract.

Grace Kankindi, Deputy Head of Investment Management at Aquila Clean Energy, joins Ed Porter to walk through how she assesses battery investments across multiple European markets.

They cover:

- Why the first MACSE auction worked as designed, even though prices cleared low and one bidder took most of the contracts, and what new anti-concentration rules could change in round two.

- What happens to Italian battery projects that miss out on MACSE, from tolling to the capacity market, and why Italian lenders still won't back fully merchant projects.

- How lenders are financing merchant batteries in Germany, with debt terms of around 3 to 7 years instead of 15 to 20, and cash sweeps to pay debt down faster.

- The risk investors most often underprice, the optimiser, and why the lowest profit share isn't always the cheapest deal as German two-hour battery revenues fall.

- Why timing decides returns in smaller markets like Lithuania and Finland, why Poland is next on Grace's radar, and why she thinks contracted revenue is riskier than it looks.

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Chapters

0:00 Intro

1:22 MACSE Auction Results and What People Got Wrong

2:38 Italy Battery Storage Investment Beyond MACSE

5:18 MACSE vs Merchant by Italian Price Zone

6:29 Battery Revenue Strategies Without a MACSE Contract

10:05 Battery Project Finance: MACSE, Tolling and Merchant

12:12 Second MACSE Auction and Anti-Concentration Rules

13:58 Merchant Battery Financing in Germany

16:14 What Lenders Want From a Merchant BESS Project

18:38 German Battery Revenue Saturation

20:27 Battery Optimiser Risk and Profit Share

23:12 Dynamic Grid Fees in Germany

25:25 Diversifying a Battery Portfolio Across 12 Markets

28:13 Lithuania and Finland Battery Storage Markets

30:13 Where to Invest Next: Poland

31:12 Best Performing Battery Assets in 10 Years

33:46 The Hidden Risk in Contracted Battery Revenue

Financing Merchant Batteries When Contracts Run Out - Aquila Clean Energy

Transmission

Financing Merchant Batteries When Contracts Run Out - Aquila Clean Energy