Diversifying into battery storage can make sense for independent power producers, but figuring out the optimal revenue stack while balancing bankability and upside can by challenging, says GoldenPeaks Capital director Deniz Ertan
Developers of renewable energy generation projects are increasingly turning their hand to the construction of battery energy storage assets. This is because the widespread deployment of solar and wind, for example, will only happen in a sustainable way if battery storage is on hand to provide the necessary flexibility. Building battery storage is the logical next move for many independent power producers (IPP) because they know that, without batteries, increasingly renewables-dependent grids will lack resiliency and start to look vulnerable.
GoldenPeaks Capital (GPC), the IPP and trader which traditionally specialised in the construction and operation of solar PV assets – and which became one of the largest PV asset owners in Eastern Europe – is one such company that has taken the decision to plough more of its resources into battery projects. Just over 12 months ago, GPC announced that battery storage would become a “main pillar” of its investment strategy and that, to this end, it had already secured a number of projects in Poland.
Just before it made that announcement, GPC had been awarded its first capacity market auction contract in Poland, thereby adding 280 MWh of battery energy storage systems (BESS) to its portfolio. GPC said it had decided to focus heavily on BESS following a period of “detailed in depth testing of batteries on its existing sites”. GPC also said it had built up its team to enable the “fast execution of numerous BESS projects”, first in Poland and then across Europe.
‘System flexibility through BESS is vital’
In an exclusive interview with Tamarindo insight director Ben Cook, Deniz Ertan, GPC director and a panellist at the upcoming Investing in Battery Energy Storage 2026 conference in London, said that “system flexibility through BESS is vital for the continued healthy growth of the renewable-heavy power market”. Ertan added that Poland is a key target market for the IPP, and also said that, since the announcement that battery storage would be a key element of GPC’s future strategy, it had made “significant strides” in the country. GPC has secured 10 projects for a total connection capacity of 392MW and installed capacity of 1,567MWh. Ertan said that GPC planned to acquire a further 150 MW of storage. “All the projects have been successful in the 2024 capacity market auctions, with planned delivery starting in 2029, and secured revenue for 17 years for each project,” Ertan said.
Ertan added that having historically been a builder of solar assets, GPC saw expansion into the BESS market as a logical progression for the company. “BESS expansion is the natural next step for an independent power producer like us given BESS has become as essential as power generating assets at this point,” she explained. “While solar remains our core business, we believe investing in BESS is a good way to diversify our business.”
In addition to the Polish market, GPC is also targeting storage assets in Hungary, Ertan said. “Poland and Hungary are our core markets for BESS at the moment, given our deep-rooted existing connections,” she explained. However, GPC could also potentially become more active in other European markets in future. “We’re actively looking for opportunities in Italy and Romania as well,” she said.
‘Balancing bankability and upside can be challenging’
However, Ertan also warned that battery storage investors need to be aware of a number of risks when investing in storage, with optimisation of revenue stacks being among the key challenges. What are the biggest risks? “Figuring out the optimal revenue stack while balancing bankability and upside at first,” Ertan said. She added: “As the market matures and gets saturated, merchant revenues tend to stabilise. Also degradation and long-term servicing are risks.” Yet there are ways of mitigating such risks. “The 17-year capacity market subsidy [in Poland] provides a stable and contracted revenue base beginning in 2029 for our entire portfolio, representing approximately a third of total revenues,” Ertan said. “Moreover, we’re exploring tolling agreements and floor price hedging agreements with bankable optimisers in order to fix the revenues from day-ahead and intraday trading and ancillary services.” She also stressed that optimisation was key in achieving “competitive returns” from a BESS project.
Strategic communications, insight and events for the global energy transition.