Battery storage looks simple - a steel box that charges when prices are low and discharges when they're high. But financing a BESS project in Europe means underwriting a trading position: convex revenues, volatile returns, and a growing menu of contractual choices that each shift the risk profile in a different direction.
Lisa McDermott, Managing Director and Head of Energy Transition Project Financing at ABN AMRO, has been structuring BESS deals across Europe since 2023*. In this episode, she opens up the credit committee. What gets a project over the line, and what quietly stops it.
Covered:
- Why battery storage finance is fundamentally different from solar or wind and why contracting it away doesn't change the underlying risk when the contract ends.
- From physical tolls to day-ahead swaps, Lisa breaks down which offtake structures are gaining traction in Europe and why the day-ahead swap is the hardest to bank.
- Too much merchant exposure, insufficient sponsor equity, weak technical track record and why pushing too many levers at once is the fastest way to stop a deal.
- How battery warranties have evolved from 8 to 20 years and why coverage beyond the debt tenor is a bankability requirement, not a nice-to-have.
- Germany's grid fee reform has created financing uncertainty at COD, while the Netherlands' congestion model is, counter-intuitively, better for bankability.
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Transcript available here: https://modoenergy.com/transmission-podcast/e2b12f17-f7b4-49d3-9d85-e4cc822695f6
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⏱ CHAPTERS
0:00 Introduction - Is financing battery storage the same as financing solar?
2:32 Why a battery is financing a trader, not an infrastructure asset
5:14 Financing across technology types - TRL 8 vs TRL 9
10:43 What stops a BESS deal in credit committee
15:53 Comfort zone: from fully merchant to fully contracted
18:43 The growing offtake menu, physical tolls, virtual tolls, and floors
24:43 Day-ahead swaps explained and why they introduce basis risk
31:59 Gearing: the sliding scale from 30% merchant to 85% fully tolled
34:37 European market comparison: Netherlands, France, Italy, Germany
40:23 Final question
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You can watch or listen to new episodes every Tuesday. Transmission is a Modo Energy production. Your host is Ed Porter — Director EMEA & APAC at Modo Energy.
*Correction: The intro incorrectly states that Lisa McDermott has been financing batteries since 2020. She has been doing so since 2023. We apologise for the error.
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