A performance guarantee is a contractual commitment in energy and infrastructure projects, including battery energy storage systems (BESS) and power plants, which ensures that the system will meet a minimum threshold of operational performance over a defined period. This guarantee typically covers metrics such as energy output, round-trip efficiency, system response time, and capacity retention.  

Unlike an availability guarantee, which ensures that a system is operational and ready to perform, a performance guarantee focuses on how well the system actually performs under operation. It is used as a risk mitigation mechanism for investors, offtakers, and operators, and may include financial penalties or compensation if the system underperforms.

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