- Nofar Energy signed a seven-year fixed-price agreement for its 104.5 MW/209 MWh Stendal energy storage project in Germany, valued at €85 million to €95 million.
- The agreement guarantees stable revenue, providing financial stability and a model for future energy storage projects in Europe.
- Nofar Energy also secured £152 million in funding for its 300 MW/624 MWh Cellarhead energy storage project in the UK, expanding its European energy storage presence.
Nofar Energy has signed a seven-year fixed-price agreement for its Stendal energy storage project in Germany. The deal, worth €85 million to €95 million, ensures predictable revenue for the 104.5 MW/209 MWh battery energy storage system (BESS). It removes the volatility typically linked to energy market fluctuations.
The agreement spans from 2027 to 2033, with an option for early commissioning before January 2027 on a merchant basis. This marks the first fixed-price flexibility purchase agreement for a BESS project in Continental Europe. The deal sets a new standard for energy storage contracts, which have remained rare in the region.
The contract structure strengthens Nofar Energy’s strategy to boost the financial viability of energy storage systems. Unlike traditional power purchase agreements (PPAs) used in wind and solar projects, this model provides excellent stability for storage projects. By locking in fixed revenues, the model offers an alternative to more common variable pricing models for energy storage.
The agreement provides Nofar Energy with significant financial benefits. The guaranteed revenue stream helps secure competitive financing conditions and improves the project’s expected profitability, which is crucial in today’s volatile energy markets. This deal could serve as a model for other storage projects aiming to attract investors.
The Stendal project has Nofar Energy working with a multinational energy company. The partner operates across the energy value chain, covering asset management, flexible production, and electricity trading. This partnership provides additional stability to the project’s financial outlook.
The fixed-price structure proves beneficial in today’s energy market. Rising volatility and fluctuating prices make projects with predictable income streams more attractive. Nofar Energy’s model may help other companies navigate this uncertainty by offering more secure financial foundations for storage projects.
In addition to the Stendal project, Nofar Energy has raised £152 million for its Cellarhead energy storage project in the UK. The 300 MW/624 MWh BESS project has backing from prominent international investors, including Goldman Sachs and Santander.
These projects highlight Nofar Energy’s commitment to expanding its presence in the energy storage sector. As demand for storage solutions grows across Europe, the company’s innovative financial strategies position it as a market leader. The Stendal and Cellarhead projects reflect Nofar Energy’s ability to capitalise on key European energy storage space opportunities.
With the energy storage market poised for rapid growth, Nofar Energy’s approach may set a precedent for future investments. The company’s efforts will likely help shape the future of energy storage financing, offering a new path to profitability and sustainability in the sector.
Nofar Energy’s growing portfolio of energy storage projects underscores the importance of flexible financing models in this emerging sector. By securing fixed-price agreements and attracting significant investment, the company helps drive the expansion of energy storage infrastructure across Europe.