Europe’s BESS industry moves from EPC ‘wrap’ to multi-contracting, closer ties with suppliers

The more experienced owner-operators are now procuring BESS and system integration separately to BOP EPC services, with some going even further and buying BESS units directly from Chinese manufacturers and self-integrating.

This also means a closening of the relationship between the companies building the technology, mainly Chinese, and the companies owning and operating the BESS projects, without the absolute necessity of an EPC or system integrator acting as the go-between.

The trend is clear from talking to numerous BESS owner-operators in the last few weeks, both in the lead up to, and in-person at, the Energy Storage Summit EU 2025 in London last week. There has always been some multi-contracting and self-integration to a degree in the industry, but it appears to have now become more widespread.

Separate BESS and EPC contracting

“Three years ago, you would get a full EPC wrap, with a provider that would build the project, buy the batteries and take entire liability for the whole project. Banks preferred that route, but for our first (UK) project our independent connection provider (ICP) collapsed and that delayed the project,” said Joshua Murphy, head of storage for renewables and storage independent power producer (IPP) Econergy.

“Now we speak directly to BESS manufacturers, who provide us a fully integrated system with batteries, inverters, medium-voltage switchgear, all under one contract. We go to Tier 1 providers as well as the system integrators that would work with their technology. That contract has all the liabilities, capacity and availability warranty, LTSA etc. In parallel, we go out to contract for an ICP (independent connection provider) or EPC to install and do all of the groundwork.”

“Bringing these parties together to make sure every single part of the project is not exposed to any interface risk is very important part of the project, and for financing—banks really want to see that.”

BESS project owners are also having to take more of a handle on BOP equipment procurement, like transformers, because of the two or three-year lead times. This means ordering them well before a project hits final investment decision (FID), the CEO of another owner-operator Eku Energy said in a recent interview.

The trend of multi-contracting and a closer relationship between owners and manufacturers also stems from factors on the upstream side too, as another owner-operator explained.

BESS manufacturers intentionally moving closer to project owners

BESS fund manager Gore Street Capital partner Alicja Kowalewska-Montfort agreed that multi-contracting is an industry-wide trend amongst more established companies but added that it has also been driven by manufacturers themselves seeking a closer relationship with project owners.

“Prices were hugely inflated immediately post-Covid. We noticed then that cell suppliers started directly wanting to talk to owners and bypassing integrators to some extent by building those relationships with owners directly,” she said.

This was because cell manufacturers started to identify storage as a distinct asset class as its potential became clearer, she said, which also means that storage will start to affect prices, having previously been a “passenger” on the EV side.

This was a positive trend for BESS owner-operators for maximising long-term project economics too, Kowalewska-Montfort added: “And we do need to have more dialogue and flexibility around degradation management and end-of-life for cells, and you do not have that granularity of discussion if you are talking to integrators.”

Some BESS owners are even going directly to BESS manufacturers and doing the system integration themselves, particularly in Germany.

Eco Stor, for example, is a company which is deploying some of Germany’s largest BESS projects and does its own EPC work, having started out as primarily an EPC/system integrator.

A new entrant, ‘green flexibility’, buys BESS units directly from CATL and inverters from SMA and does the system integration itself, its CEO Christoph Ostermann told Energy-Storage.news in a recent interview. While the company is new to the market, its team is not. Ostermann was one of the co-founders of residential battery and VPP pioneer sonnen while its CTO Herrmann Schweizer has a decade of experience in BESS, serving as sonnen’s CTO from 2015-2021.

Axel Holmberg, CEO of Sweden’s largest BESS operator, Ingrid Capacity, told us the firm is also moving towards procuring batteries directly and taking on more engineering itself.

“We’re spending more time on value engineering, really connecting the assets at specific sites to the commercial model we’re using for that project. We’ve moved from the off-the-shelf solution to procuring batteries and doing more technology development ourselves,” he said.

Ingrid’s CTO Andreas Langholz added that an ‘off the shelf’ solution might not get you the best outcome: “We’ve gone one layer deeper into what we want to do ourselves and what we want to buy, and that looks different in different markets. In general, we want to take on some of the hardware engineering ourselves in order to capture the full value, not just from procurement and capex but also making sure we get the right data and control.”

“How much we want to vertically integrate ourselves is a question. In some places an off the shelf solution will not get you the most out of the system.”

Maturity of contracting is key

For Gore Street’s largest asset, the 200MW/400MWh Big Rock BESS in California which will enter commercial operation soon, it employed a multi-contracting approach. It secured BOP separately to a battery package, which is managed by an integrator with direct exposure to the warranty, and a grid connection package also secured separately.

“We’ve built the capability to do multi-contracts, which means taking on more of the risk but lowering the overall costs to us,” Kowalewska-Montfort said.

“Contracting is more mature; overall, that is very positive. We’ve worked closely with partners like Nidec and have always built strategic relationships with the industry. That helps us have a deeper understanding of the product.”

Murphy also said that the maturation of contract is key: “The established suppliers will understand the contracting side. We want to know that we will have recourse in five, 10, 15 years if something goes wrong.”

Multi-contracting and direct supplier relationship not for everyone

Of course, not everyone is willing to take on the risks that multi-contracting brings, nor should they be, Kowalewska-Montfort advised

“This move to multi-contracting is an industry-wide trend for those companies that are long-term players here. For those new ones like financial investors, I would not recommend unpackaging the construction and BESS and the new risks that it brings.”

And with the amount of new entrants to the market as the industry grows exponentially, the demand for EPC wraps won’t necessarily decrease.

Comments from a firm that’s been in the headlines recently for BESS in Europe provide a perfect example. As the Summit kicked off last week, developer Lion Storage announced financial close on a 350MW/1,400MWh BESS in the Netherlands, the largest in the country to do so.

That makes the firm a pioneer there, but within the context of the European market, a relatively new entrant. Speaking to Energy-Storage.news at the event, Lion’s CTO Jeroen Althoff made it clear that multi-contracting was never really an option because of interface risks.

“We considered other suppliers but in the end it was quite obvious they were the ones to go with. For project finance it needs to be bankable, and they do all the EPC and civil works, it all sits beneath them,” Althoff said.

“If you have one party responsible for batteries and one for installation and one for ground works, you can run into problems.”

BESS and inverter firm Sungrow’s head of Europe for ESS James Li also said the increasing scale of projects—Lion’s again being a good example—means that taking on more EPC, system integration or detailed engineering work in-house might not work (Sungrow doesn’t provide EPC however).

“As global energy demand continues to rise, BESS projects surpassing 1GWh in capacity are becoming increasingly common,” Li said.

“However, projects of this size pose operational challenges which requires more reliable and precise overall system design, control and monitoring, highly qualified manufacture and testing abilities and also excellence on operation & maintenance (O&M) capacity.”

Another BESS manufacturer, speaking anonymously, added: “It’s hard to do all that alone as an operator, it needs a big investment.”

Sungrow provided the BESS for the 331MWh Bramley project in the UK, commissioned this month by developer Penso Power and owner-operator BW ESS, which also invested in Ingrid Capacity and its 211MW first phase of operational BESS in Sweden.