Independent Engineering for Utility-Scale BESS Project
PowerSwitch provides full service buy-side or sell-side technical due diligence (TDD) for both early-stage BESS projects as well as for M&A of operational projects or portfolios. The scope of the IE review can be tailored to the needs of each customer, ranging from quick-turn red-flag reviews to completion of a full scale IE report in support of project finance transactions. The report is focused on identifying key risks, and proposing / evaluating methods of mitigating these risks to ensure a successful, profitable project.
The table below details each the review conducted in each section of a typical full-scope IE report for a pre-financial close (FC) utility-scale BESS project. For each section, the key elements of review are listed along with optional additional reviews. The hourly estimates are representative of past reviews conducted by PowerSwitch, but can be modified as needed to provide additional focus on any key concerns, or streamlined to remove any which do not apply.
This scope assumes the review is pre-FC reviews, PowerSwitch can quote post-FC diligence such as review of budget/progress, issuance of IE certificates, site visits, and milestone completion such as Mechanical Completion (MC) or Substantial Completion (SC).
Following the full-scale IE scope, a condensed ‘red-flag’ review scope is summarized. This is a high-level review to highlight any large risks to the project. This approach is used for time-sensitive reviews, and is common with M&A transactions, but can be performed for BESS projects at any stage. The listed hourly commitment can be modified based on individual client requests and budget.
All engagements require a preliminary review of the available documents, at which point a binding project-specific quote can be issued.
Typical Scoping and Hourly Commitment – Utility-Scale BESS TDD
Section
Description
Hours
BESS Technology Review
Review of the proposed BESS technology provider, bankability report (if available), and any key risks associated with the proposed provider. Include review of any key product-integration risks
24
Interconnection
Review
Review all interconnection documents including queue/cluster approvals, technical studies, payment records, and any communications between Project, utility and/or grid operator. Interconnection Agreement review conducted for key technical terms
12
Environmental,
Health, and
Safety Review
Review all pertinent environmental impact studies/assessments (ESA/ESIA), wildlife studies, archaeological reports, noise studies, environmental health and safety (EH&S) reviews. Optionally, conformance with Environmental, Social, and Governance (ESG) policies may be included in this section, as may evaluation of expected carbon emissions.
18
Financial Model
Review
Inputs to financial models are reviewed for conformance to expected market conditions and technical performance of the system. May include review of expected BESS revenue and earnings, augmentation/degradation/decommissioning assumptions, and correspondence with contractual terms of the relevant BESA/LTSA/O&M agreements. If applicable, any other financial arrangements, such as hedges or swaps, may also be reviewed. For projects involving a merchant revenue component, review of key assumptions of market performance.
12
Major Agreement
Review
Review of all major agreements for correspondence with industry standards and with key terms of financial model. Includes offtake agreements, battery energy supply agreements (BESA), EPC contracts, long-term service agreements (LTSA), operations and maintenance (O&M) agreements, as well as all pertinent product warrantees and performance guarantees (PG) offered for the battery, PCS, transformers, controls system, and any other key equipment involved in the project.
24
Operational Review
Review of the expected operation of the BESS, including 8760 performance expectations, battery cycling, and degradation / augmentation modeling. Confirm correspondence with key terms of the BESA and warranties/PGs. For PV+Storage plants – confirm that the expected usage and cycling corresponds to the expected output and performance of the PV plant
8
Design Review
Review of all major plans and calculations for correspondence with industry standards and with technical assumptions of the project. As needed, perform in-depth review of project specifics such as layout spacing conductor sizing, reactive power requirements, site ability of products to integrate.
8
Construction Review
Review relevant construction contracting structure, contractor track records, schedule, and coordination between contracts. Review of appropriate gap between liquidated damages between construction and supply contracts. Evaluation of Division of Responsibilities (DoR).
12
Safety Review
Conduct review of key safety aspects of project. Includes review of compliance with relevant standards such as UL9540A, UL9540, UL1973, NFPA855, UL68, UL69. Review appropriate hazard mitigation analysis(HMA) and/or failure mode effects analysis (FMEA) Review plume /
deflagration analysis as required. Optionally – provide review of international standard equivalency such as IEC62619, IEC62933,and IFC.
8
Conclusion / Risk Summary
Conclusion highlighting all key risks identified. Classification of low/medium/high risk. As required, propose or evaluate acceptability mitigation method for risks.
6
Total
Estimated hours for comprehensive IE Report
132
Typical Scoping and Hourly Commitment – Utility-Scale BESS Red flag review
Section
Description
Hours
BESS Technology
Review
Review bankability report, summarize any project-specific risks.
4
Interconnection Review
Review key terms of IA, schedule, and any grid improvements.
2
Environmental, Health, and
Safety Review
Red-flag review of 3rd part EHS review.
2
Financial Model Review
Confirm key inputs only: revenue, degradation/augmentation/cycling
3
Major Agreement Review
Red-flag review of BESA, LTSA, O&M, and Offtake agreements.
4
Operational Review
Check cycling and degradation for conformance with other project documents.
2
Design Review
Red-flag review of SLD and project layout.
2
Construction Review
Check delivery dates, LD provisions, and schedule for any red-flags.
2
Safety Review
Produce matrix summarizing existence of UL9540 and UL9540A and highlight any key risks.
3
Operational Review
For operational projects only. Review key operational data including charge/discharge, temperature, and cycling data. Summarize compliance with key warranties / performance guarantees. Review financial performance relative to financial model.
4
Conclusion / Risk Summary
Conclusion highlighting all key risks identified. Classification of low/medium/high risk. As required, propose or evaluate acceptability mitigation method for risks.
2
Total
30