01 · The brief
What the developer asked for.
A renewable infrastructure developer, lender already in the room. Four-supplier RFQ, three weeks to selection, twelve-year design life. The job: get a contract that makes the lender comfortable and the equity sponsor confident the protection lines up with the price.
System
50 MW / 100 MWh
2 hr · single site
Connection
110 kV POI
30 kV MV inside fence
Suppliers
Four
Established OEMs + EU PCS
Lender pack
Required
Senior debt + equity
02 · Round 1
What came back was not yet comparable.
Four proposals, four different price baskets. Different Incoterms, different SOH bases, different bundling of PCS and MV. Headline €/kWh ranged from €71 to €119 — most of that gap was measurement, not value.
Supplier A
€76 / kWh
DC-only · DDP · 100 MWh basis
Battery containers only. No PCS, no MV, no commissioning of integrated system. Customs not split.
Supplier B
€119 / kWh
Bundled · DAP · 107 MWh basis
Premium 530 Ah cell bundled with PCS and MV. Different cell, different SOH, 30% liability cap.
Supplier C
€71 / kWh
Battery-only · DAP · 100 MWh basis
Excludes PCS, MV transformer, EMS. a Chinese bank's bond, conditional, non-transferable to EU lender.
Supplier D
€97 / kWh
Integrated · DAP · 100 MWh basis
String-PCS architecture. Lowest SOH floor (60% min). Heavy OPEX schedule from Y3.
Three of the four were quoting different products against different yardsticks. Round 2 starts by telling each supplier what the ruler is.
03 · Normalisation
Same scope, same Incoterms, same yardstick.
Each supplier responds on a single template. KKME's. Round 2 issues four private gap lists — same questions, no cross-leakage — and demands the answer in the units that the lender's model uses.
01
Single Incoterms basis
DAP-site. Customs (2.7% LT), F-gas, EPR/recycling broken out as separate lines, not buried in headline.
02
Same scope envelope
Battery DC, PCS+MV, freight, customs, F-gas, EPR, commissioning. Anything outside the line is buyer scope and priced separately.
03
Common cycling profile
2 c/d, 100% DOD, 25 °C ambient. Every SOH curve and RTE point reported on this basis or adjusted to it.
04
Lender-grade BG
URDG 758, on first demand, transferable, EU bank, EU contracting entity. The non-negotiable line.
04 · CAPEX
Equipment and logistics, line by line.
Once the four are normalised, the headline DAP price spreads from €8.3M to €11.7M. The €/kWh nameplate spread tightens from 56% to 33%. Most of the original gap was measurement — what's left is real difference in scope, chemistry, and bundling.
CAPEX DAP — normalised, by category
Battery DC, PCS + MV, freight, customs, F-gas, EPR, commissioning. Each supplier on the same basis.
| Item | A | B | C | D |
| Battery layer (DC) |
| Battery containers | €6,520,00016 × 6.25 MWh | €7,350,00019 × 5.65 MWh | €7,140,00021 × 5.02 MWh, bundled | €6,820,00021 × 5.02 MWh, bundled |
| €/kWh DC equipment | €65.2 | €68.7 | bundled | bundled |
| PCS + MV layer |
| PCS units (5 MW × 11) | €2,920,000EU PCS direct | €3,180,000EU PCS bundled | bundled | bundled · string PCS |
| MV transformer + SWG | in PCS unit | skid · €420k | €460,000 | €440,000 |
| Logistics, customs, regulatory |
| Freight (DAP) | €110,000 | €124,000 | €352,000 | €264,000 |
| Customs duty (2.70%) | €265,000 | €292,000 | €202,000 | €232,000 |
| F-gas declaration | €3,200~16 ctn × €200 | €3,800~19 ctn × €200 | €4,200 | €4,200 |
| EPR / recycling (LT) | €248,000€2.5/kWh × 100 MWh | €252,000 | €245,000 | €256,000 |
| Commissioning |
| Cold + hot + SAT | €82,000 | €124,000 | €78,000 | €238,000 |
| CAPEX DAP — total | €10,148,000 | €11,745,000 | €8,481,000 | €8,254,000 |
| €/kWh DC nameplate | €101.5 | €117.5 | €84.8 | €82.5 |
| €/kWh usable @ POI | €106.8 | €123.7 | €89.3 | €86.8 |
F-gas and EPR are real costs, but small. F-gas declaration runs ~€200 per container. Lithuanian EPR/recycling for batteries is roughly €2.50/kWh nameplate. On a 100 MWh site that's about €3,000 and €250,000 respectively — material for EPR, footnote for F-gas.
05 · OPEX
Twelve years of operating cost.
Three categories: preventive maintenance, performance guarantee package, warranty extensions Y6-12. Two suppliers price all three. Two defer the back end of the warranty curve to "later in negotiation" — a number that lands somewhere, the question is where.
OPEX 12-yr — full schedule, by supplier
PM lump sum + PG package + warranty extensions. Dashed lines mark deferred Y6-12 pricing.
Standard 5 yr warranty
Bundled
Universal in 2026 quotes. No supplier charges separately for the base 5-year product warranty.
Extended Y6–10
~1.5% / yr
Industry norm in 2026 — roughly €99k/yr on a €6.6M battery scope. Most suppliers price this on request.
Performance guarantee package
€150–250k
Capacity, RTE and Availability LDs covering 12 years. Spread depends on whether mechanism is templated or custom.
TCO scenario B — CAPEX + warranty extensions
No LD-backed performance guarantees included.
TCO scenario C — Scenario B + performance guarantees
Adds Capacity / RTE / Availability LDs with binding mechanism.
On full twelve-year TCO (CAPEX + warranty extensions + 12-yr operating cost), without performance guarantees, D is roughly €520k cheaper than A. Once the PG package is priced, A is €400k cheaper than D. The €920k swing is the cost of buying separate PG cover from D, where A already bundles it.
07 · Revenue impact
What the SOH and RTE gap costs.
A 1 percentage-point shift in RTE or availability moves real money. On a 50 MW / 100 MWh asset running day-ahead arbitrage plus aFRR and mFRR, the four use cases below set the order of magnitude. Capacity market revenue is excluded — Lithuania's mechanism is still in design.
Day-ahead arbitrage
€38–55 / MWh
Spread × cycles × RTE
RTE-sensitive. 1 pp RTE ≈ €34k / yr at this site size.
aFRR (Lithuania)
€55–90 / MW·h
Capacity + activation
Availability-sensitive. 1 pp availability ≈ €23k / yr.
mFRR (Lithuania)
€18–32 / MW·h
Standby + activation
Lower margin, longer activations. SOH at Y10 sets the bid envelope.
Capacity (LT)
Not yet established
Mechanism in design
When it arrives, SOH floor at Y10 sets de-rate factor and bid level.
Cumulative lost-revenue exposure relative to A — Y0 to Y12
What B, C and D's lower performance costs the project on the same site, same dispatch. B is positive (more energy through), C and D negative.
B delivers about €630k more revenue than A over twelve years on raw output, but the €1.6M higher CAPEX absorbs all of it and then some. On NPV at 8% discount, B trails A by roughly €1.18M.
08 · Protections
Where each supplier sits on contractual teeth.
Liability cap, LD framework, governing law, BG transferability. The lines that decide whether the lender accepts the contract or asks for a guarantor.
| Layer | A | B | C | D |
| Capacity LD framework | Built-in F1 formula | Custom mechanism | Custom mechanism | Optional add-on |
| RTE LD | F2 binding | In PG package | Per LTSA | Not offered |
| Availability LD | F3 binding | In PG package | Per LTSA | Optional add-on |
| Liability cap | 100% contract | 30% contract | 100% LTSA / yr | Open |
| APG / PB / WB | EU bank · URDG 758 | EU bank · URDG 758 | CN bank · conditional | Pending |
| Transferable to lender | Yes | Yes | No · CN law | In review |
| Governing law | LT | LT | CN (negotiable) | HK (preferred) |
| Delay LD | 0.05% / d · 10% cap | 0.10% / d · 15% cap | 0.20% / d · 20% cap | Pending |
| Service SLA — emergency | 6 h | 6 h | 8 h | 12 h |
09 · Lead time
Sign to DAP — what each supplier promises.
Lead time from contract signature to DAP-site delivery. Range across the four: 22 to 30 weeks for the BESS containers. The MV transformer is a separate single-source 14–16 week order — KKME runs it in parallel with the BESS contract, not after, or it sets the critical path.
W0W4W8W12W16W20W24W28W32W36W40W44W48
Supplier A
Manufacturing · 22 wk
Ship · 4 wk
Supplier B
Manufacturing · 26 wk (premium cell)
Ship · 4 wk
Supplier C
Manufacturing · 20 wk
Ship · 5 wk
Supplier D · integrated string PCS
Manufacturing · 18 wk
Ship · 4 wk
EU PCS direct
Manufacturing + freight · 20 wk
Civil works + foundations
For Chinese-sourced equipment, ship date matters: a 9% export tax kicks in for shipments leaving China after 31 December 2026. On a €7M battery contract, that is a €630k difference. Sign date back-calculates to roughly mid-Q3 2026 if year-end is the cut-off.
10 · Risks
Risk register at selection.
Severity × likelihood. The four red cells are deal-breakers if not closed before signature; everything else moves into the project risk log and gets managed through commissioning.
Very low
Low
Medium
High
Very high
Severe
BG non-transferabilityCN-law guarantees; lender cannot enforce.R1
SOH undershootSystem fails 80% Y5 / 65% Y10 floor.R2
Major
Cell chemistry shiftOEM swap mid-build.R3
MV transformer slipConnection deadline penalty.R4
PG mechanism disputeCapacity test methodology unclear.R5
Moderate
EMS / SCADA gapUnclear scope split.R6
Customs reclassificationHS code dispute.R7
FAT delay2–4 wk slip risk.R8
CN export tax9% post-Dec 2026.R9
Minor
Cooling fluid lead~3 wk single-source.R10
Translation deltasEN vs LT spec drift.R11
Insurance gapEAR cover sizing.R12
Negligible
Spares kitSingle-source first 12 mo.R13
NIS2 baselineCyber controls drift.R14
11 · Elimination
From four to one — what each drop costs.
Round 2 close. Three suppliers are eliminated in sequence, each on a single decision axis. The numbers below are the reason each one leaves the table.
Round 2 close
4 in
A · B · C · D
Four normalised proposals on the table.
CAPEX spread €8.25M to €11.75M. SOH Y10 spread 68.7% to 75.8%. Liability caps 30% to 100%. Three of the four pass the technical bar; only one passes the lender bar without restructuring.
CAPEX low / high
€8.25M – €11.75M
Y10 SOH low / high
68.7% – 75.8%
Drop 1 · Cost
B out
A · C · D remain
Supplier B — premium cell does not pay back.
B is the technical leader: 530 Ah cell, +7 pp Y10 SOH, +3 pp RTE. But the CAPEX premium is €1.60M against A on the same scope. Twelve-year revenue advantage is roughly €630k. NPV at 8% discount: B trails A by ~€1.18M.
CAPEX premium vs A
+€1.60M
Drop 2 · Lender
C out
A · D remain
Supplier C — bank guarantee structure is a hard block.
C is the cheapest viable proposal on CAPEX (€1.67M below A) and competitive on performance. But the proposed APG / PB / WB suite is a Chinese bank, conditional demand, governed by CN law and not transferable to an EU lender. The lender's term sheet requires URDG 758 first-demand from an EU bank. C cannot meet this without a guarantor or restructuring at material cost.
BG transferability
No · CN law
Liability cap
100% LTSA / yr
Drop 3 · TCO
D out
A remains
Supplier D — cheapest CAPEX, most expensive twelve years.
D's headline CAPEX is €1.89M below A. But D's per-year operating cost runs roughly €1.05M heavier than A's bundled pack over twelve years, and a binding LD framework costs €920k extra. D's SOH floor is 60% — five points below A's contractual 65%. Once the protections are priced in, A is €400k cheaper on full twelve-year TCO.
Selection
A in
Recommended supplier
Supplier A.
Best balance of cost, contract structure, and lender pack. F1/F2/F3 LDs binding from contract signature, EU bank URDG 758 BG suite, 100% liability cap, Lithuanian governing law, 0.05% delay LD with 10% cap. €106.8/kWh usable at POI on a 12-year horizon.
12-yr TCO (with PG)
€10.64M
Four-axis evaluation
Cost / Performance / Protection / Lender-readiness. Distance from centre = strength.
Composite score
Weighted 30 / 25 / 25 / 20. Pass mark at 7.0.
12 · Term sheet
What goes to Supplier A's negotiation team.
A short, signed-off term sheet that anchors the supply contract redline. KKME drafts it, the developer's law firm reviews, the lender's counsel co-marks the BG and termination lines.
Supply agreement — headline commercial terms
Draft · KKME · Round 2 close
Project
- Scope
- Battery DC containers + 11 × 5 MW EU PCS (procured direct) + MV transformer (LT, separate)
- Capacity
- 50 MW / 100 MWh nameplate, 92 MWh @ POI Y0
- Cycling
- 2 c/d, 100% DOD, 25 °C ambient
- Design life
- 12 years
- Site
- 110 kV POI, 30 kV MV inside fence
Commercial
- Price
- €10,148,000 DAP, fixed in EUR
- Incoterms
- DAP-site (Lithuania)
- Customs
- 2.7% LT, separately invoiced, buyer scope
- F-gas / EPR
- Itemised; declarations transferred at delivery
- Validity
- 30 calendar days from term sheet signature
Payment milestones
- Advance
- 20% on signature, against APG
- B/L
- 30% against bill of lading
- Delivery
- 40% on DAP-site delivery
- PT pass
- 10% on performance test acceptance
- Long-stop
- 120 days from B/L for final tranche
Bank guarantees
- APG
- 100% of advance, EU bank, URDG 758, transferable to lender
- PB
- 15% of contract, EU bank, URDG 758, until performance test
- WB
- 5% of contract, EU bank, URDG 758, retention through warranty
- Issuer
- Supplier A's EU contracting entity
Performance & LD framework
- Capacity LD
- F1 — linear, €/MWh shortfall against guaranteed Y0/Y5/Y10 SOH
- RTE LD
- F2 — linear, €/pp shortfall annually, capped at 10% contract
- Availability LD
- F3 — linear, €/pp shortfall annually, capped at 10% contract
- Delay LD
- 0.05% / day, 10% contract cap
- Liability cap
- 100% of contract value
Warranty & service
- Base
- 5 yr product + performance, bundled in price
- Extension
- Y6-10 priced at ~1.5%/yr of equipment, decision by end Y4
- SOH floor
- 65% binding @ Y10 + augmentation trigger
- SLA
- 6 h emergency, 3 cal d general, 7 BD complex
- Spares
- Strategic kit on site, replenishment SLA defined
Legal
- Governing law
- Republic of Lithuania
- Jurisdiction
- Vilnius arbitration, ICC rules, English language
- IP escrow
- BMS firmware + PCS firmware, EU escrow agent
- Force majeure
- Standard EU template, no policy-change carve-out for export tax
Insurance & risk
- EAR
- Supplier-arranged through DAP, max €10k deductible
- Risk transfer
- At DAP-site delivery (truck floor)
- Title
- At advance payment + APG posting
- Lender step-in
- Direct agreement, supplier to consent
13 · Next steps
From selection memo to contract.
What happens between this memo and COD. Numbered actions with target weeks from selection.
01
Lock A on best-and-final terms
Supply contract draft circulated. KKME drives the redline; developer's law firm reviews; lender's counsel co-marks BG and termination.
Week 1
02
Lender pack to bank
Selection memo, contract draft, BG sample text, technical due diligence. Bank credit committee window: 3 weeks typical.
Week 2
03
Notify B, C, D — formal close
Short notes thanking each. Relationships stay open for the next round on the next site.
Week 2
04
Sign supply contract + issue APG
Advance payment guarantee posted by A's EU entity through an EU bank, transferable to the project lender. 20% advance triggered.
Week 5
05
FAT preparation + factory window
Joint FAT protocol agreed. KKME attends factory acceptance with developer's technical lead; performance test methodology locked here, not at SAT.
Week 18
06
Site logistics + civil works
Foundation pour, MV transformer order alongside, fire suppression and earthing prep. Critical path tracked weekly.
Week 12+
07
Commissioning + SAT + PT
Cold commissioning, hot commissioning, site acceptance test, performance test against contractual capacity / RTE / availability targets. PG mechanism kicks in at PT.
Week 38
08
COD + retention release
Commercial operations date. 5% retention held for warranty bond period. KKME stays engaged through year-1 performance review.
Week 48
14 · Process
How KKME runs procurement.
Six stages, end to end. KKME runs each one with the developer — the same person who scopes the brief negotiates the LD framework and is present at FAT.
01 · Brief
Translate the developer brief into an RFQ that's actually comparable.
One Incoterms basis. One cycling profile. One scope envelope. Suppliers respond on a single template — KKME's, not theirs.
02 · Round 1
First-pass comparison and a private gap list per supplier.
Every line item challenged. Every footnote read. Same questions to all, no cross-leakage between suppliers.
03 · Round 2
Best & final on price, scope, protections, BG.
Competitive pressure on three fronts at once: price, contract, lender pack. Anonymised market signal where it serves the developer.
04 · Selection
Decision memo to developer and lender.
One memo, one recommendation, every number traceable to a supplier document. Lender can verify any line without calling the supplier.
05 · Contract
Supply contract redline against the selected proposal.
LD framework, BG structure, governing law, termination, IP, insurance. KKME drives the redline alongside the developer's law firm.
06 · Build
FAT, SAT, milestone management through COD.
Factory acceptance, site acceptance, milestone payments, retention release. KKME stays engaged through year-1 performance review.