KNESS and Oschadbank entered into an investment loan agreement under the ESS project implementation for the ancillary services provision

KNESS is actively implementing one of the largest portfolios of energy storage (ESS) projects to ensure the stable operation of Ukraine’s power system.

Within the framework of one of these projects, KNESS and Oschadbank entered into an investment loan agreement amounting to EUR 9.6 million. This is a complex project finance agreement, which also involves the European Bank for Reconstruction and Development (EBRD) in terms of project risk sharing.

We are grateful to our partners for their trust and cooperation in the implementation of an important project to support the resilience of the country’s power grid. 

The project envisages construction and grid connection of energy storage systems within the guaranteed right to provide primary frequency regulation (FCR) services in the amount of 25 MW and secondary frequency regulation (aFRRs) in the amount of 5 MW, as a result of winning the special auction for the ancillary services purchase.

Ancillary services for reserves provision are intended to ensure that generating equipment is ready to respond to frequency changes in the power system. Meeting reserve provision needs is also important for the stable synchronous operation of the European and Ukrainian power systems. 

“This project by KNESS is one of the first examples of a systematic approach to a new type of business in the energy sector — the targeted construction of frequency regulation capacities to provide ancillary services on contractual terms. The high demand for the service in the current time and in the perspective of the country’s economic recovery is the key to further multiplication of such projects” — mentioned Yuriy Katsion, the Deputy Chairman of the Board of Oschadbank.

In total, KNESS Group is currently implementing 7 projects for the ESS construction in the country’s 3 regions with a total certified capacity of 79 MW of frequency containment reserve and 5 MW of automated symmetrical frequency restoration reserve. The expected facilities’ commissioning date is October 2025.

“We are developing renewable energy by introducing innovations and implementing new business models. Four years ago, we started researching energy storage technologies and actively worked on modeling the ESS operation in the ancillary services market. And this year, we are activating the accumulated expertise, continuing to invest in the implementation of industrial ESS projects. We see the future and understand the importance of such systems for the country. And we are grateful to Oschadbank for cooperation in this regard” — highlighted Sergii Shakalov, СЕО of KNESS.

Oschadbank is a leading Ukrainian universal commercial bank, 100% of whose shares are owned by the state. During the full-scale war, the bank’s main efforts are aimed at supporting industries critical to the economy and expanding the country’s export potential. Oschadbank is a front-runner in financing energy companies and municipalities, and is a leader in supporting the country’s agricultural sector, retail, heavy and defense industries. 

In the photo: Sergii Shakalov, СЕО of KNESS and Sergii Chernikov, Director of the Corporate Business Department of Oschadbank.