PE firms/PE-backed companies accounted for ~63% of the deal volume, with transacted capacity increasing by 375% y/y to 1.9 GW. The UK accounted for 66% of the deal activity, primarily due to the revenue stacking mechanism, which creates additional income streams for BESS operators. Revenue stacking, approved by the National Grid in Jan’21, allows energy storage facilities to provide balancing as well as dynamic containment (DC) services. DC is aimed at managing frequency fluctuations in the grid and provides 2-3 times more revenue compared to other frequency response services. This has incentivized additional investments in the country's BESS market.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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