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Publication Type
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Supervisor
Publication Year
2024
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Book
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Publication Number of pages
13
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Abstract
This case explores Montea, a leading Belgian logistics real estate company, and its strategic evaluation of large-scale investments in Battery Energy Storage Systems (BESS) as part of its decarbonization and growth strategy. Under the leadership of Chief Sustainability Officer Dirk Van Buggenhout, Montea faces the dual challenge of reducing carbon emissions while maintaining financial viability in the energy-intensive real estate and logistics sectors. The company has already integrated rooftop solar, advanced building designs, and data-driven efficiency measures, but the intermittency of renewables necessitates reliable storage solutions. Falling battery costs and improved performance have made BESS commercially viable, positioning them as critical for both sustainability goals and new revenue opportunities through grid services, energy-as-a-service offerings, and tenant retention. Montea's proposed project involves deploying BESS across multiple sites in Belgium and the Netherlands, with expected returns from grid stabilization (FCR and aFRR), the Belgian Capacity Remuneration Mechanism, and incremental rental income tied to sustainability-driven tenant demand. However, the initiative carries risks, including high upfront costs, rapid technological obsolescence, regulatory uncertainty, and volatile energy markets. The case places Dirk at a strategic crossroads: should he recommend scaling up BESS investments despite uncertainties, and how should Montea's board weigh financial metrics such as IRR against strategic and reputational benefits? The decision highlights broader questions of how companies in carbon-intensive sectors can align long-term sustainability commitments with shareholder expectations and evolving energy markets.
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Keywords
Sutainable Finance, Energy, Finance, Business Strategy