Off grid battery system project financing options in Czech 2025

What will the Czech electricity storage scheme do in 2025?

In an announcement released on March 7, 2025, the executive arm of the European Union said that the Czech scheme will support the installation of at least 1.5 GWh of new electricity storage facilities. The measure will be open to all storage technologies directly connected to the transmission network or distribution network.

Are battery storage projects funded on a stand-alone basis?

KBRA has observed an important distinction in the funding tools for battery storage depending on whether batteries are being funded on a stand-alone basis or as part of a portfolio, versus those that are part of hybrid projects (utility-scale solar or wind combined with battery storage).

Do European and UK regulators support battery energy storage systems?

The success in recent capacity market auctions in Italy and the UK, as well as other European countries that are building large-scale battery energy storage systems (BESS) projects, signals that the European and UK regulatory environment is providing a degree of limited support to the technology.

Do hybrid batteries need long-term debt funding?

While long-term institutional debt funding of stand-alone and portfolio battery storage transactions has been relatively limited, there is a growing appetite for long-term nonrecourse debt funding of hybrids, which benefit from 20- or 30-year PPA offtake terms.

How are battery storage transactions funded?

Funding techniques vary, but most battery storage transactions are funded on a short-term basis, taking into account corporate risk rather than on a pure stand-alone, nonrecourse basis. Regulation has a role in bridging the gap between inherent merchant exposure and long-term lenders’ needs for predictable cash flows.

How can regulatory support help address revenue volatility in battery storage?

Regulatory support, by way of capacity market auctions, is being provided on a limited basis to help address revenue volatility, although most battery storage transactions in the UK and Europe continue to be funded with high levels of merchant risk exposure.