what makes a utility scale storage project investable? · what makes a utility scale storage...

What makes a utility scale storage project investable? Julian Wayne

Energy Storage Networks Manager, RES Ltd

November 4th 2015

Developed

and/or built

>9GW of wind

energy

Developed

and/or built

>150MW of

solar PV

Built >1000km

of transmission

lines

2015 Renewable Energy Systems Limited – European Utility Week conference

Developed and

built 47.6MW

battery

projects; 30MW

in development

RES has…

RES Group Headquarters

9 Projects

4 different functions (at least)

6 different ownership models

5 different revenue models

5 different markets

3 different battery vendors

Function Owner MW / MWh Revenue Model Market

FR (freq regulation) RES 4.0 / 2.6 Owner Merchant PJM

FR RES 4.0 / 2.6 Owner PPA IESO

FR JV (RES + Financial) 19.8 / 7.9 Financial Instrument PJM

FR JV (RES + Financial) 19.8 / 7.9 Financial Instrument PJM

Reliability/Micro-grid Utility 2.0 / 4.4 EPC WECC

FR Financial Investor 6.0 / 2.0 DEV & BOP PJM

FR IPP 19.8 / 7.9 EPC PJM

Deferral Utility 2.0 / 12.0 EPC NYISO

Multiple R&D Center 0.15 / 0.3 EPC Hydro Quebec

TOTAL 77.6 / 47.5

4MW/2.6 MWh “Amphora” Project

RES energy storage projects


Support RES technical, HSQE, finance, etc.

• RES energy storage delivery chain


We offer a complete solution

What makes a project investable?

1. Technology confidence

2. Clear value case

3. Understanding all the revenue streams

4. Market and regulatory risk

5. Investor and customer education

5


Technology confidence

• Many technology options.

6

1


• We find that investors want a complete package they can rely on.

• Guaranteed minimum standard of performance – financial penalties can

cover lost revenue.

• Warranties – many options but a full warranty provision held by the

developer is a popular option.

• Must be insurable.

Clear value case 2


Clear value case 2


• Finding the best value solution.

• Contract length – the longer the better.

0

4

8

12

0

20

40

60

80

100

120

140

160

180

200

02

46

810

1214

MW

SAID

I

MWh

SAIDI Metrics based on ESS Sizing

MW

MWh

SA

IDI

Optimal Cost-to-Performance

MW

MWh

Pe

rce

nt

SA

IDI

Red

uc

tio

n p

er

inc

rem

en

tal $

of

sp

en

d

9

G

115kV

55kV

12.5 kV

Town Load

4 MVA peak

Hydro Gen

3.0 MW

• Project with PSE, a major US utility

• Battery energy storage to provide grid

support for a remote town

• Low reliability of supply to town during

winter

Construction phase project example: Glacier


10

Operational project examples: Jake and Elwood

• Jake and Elwood (Joliet and West Chicago, US)

• Two projects, 19.8MW/7.8MWh each

• Commissioned Autumn 2015


Modeling the value of storage is a

challenging, multi-stage journey

• Many potential revenue and cost

streams

• Sophisticated modeling required to

quantify many value streams

– Specific values vary regionally due to

market structures and regulations

• Some ‘benefit stacking’ may be

possible

– Even more modeling is required to

eliminate double counting


Understanding the multiple revenue and cost streams 3

• Regulations may need to change to recognise storage so that other

barriers can be addressed – network and market barriers.

• Government should engage with industry – no black box!

• Clarification in tax codes

• New European regulations?

12

Market, regulatory and government risk 4

Investor and customer relationships 5

Different revenue

models, operating

modes, asset

lifetimes, build

times, ownership

models, suppliers,

performance

characteristics,

degradation

characteristics…

Clarification in tax codes

Summary – what makes a project investable?

1. Technology confidence Pick the right technology and technology supplier

Guaranteed minimum standard of performance

Fully wrapped warranty offering

2. Clear value case Complex modelling required to establish the right technology

Contract length key to investability

3. Understanding the multiple revenue and cost streams Multiple revenue streams can be key

Network charges, market costs can become revenue streams

4. Market and regulatory risk Regulations and tax codes need updating

Governments need to engage with industry

5. Investor and customer education Very different to existing network assets

Very different to existing generation assets 13


14

Julian Wayne

Energy Storage Networks Manager

[email protected]

www.res-group.com

Come and visit us at stand Bf.12

Thank you


mailto:[email protected]



http://www.res-group.com/



what makes a utility scale storage project investable? · what makes a utility scale storage...

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