Renewable energy procurement advisor LevelTen has unveiled a new financial contract service that enables corporations to invest in large-scale energy storage projects.
Called the RE-Store Energy Agreement, it is a contract styled on power purchase agreements (PPAs) that LevelTen is better known for securing in the renewables sector. It is designed for utility-scale projects and guarantees a price per MWh for energy that is sold to the grid, according to a spokesperson for the group. LevelTen uses a suite of analytics and a database of PPA knowledge to assess risks and help customers find the deal most appropriate to their needs.
The contract means that buyers are paid the difference between highest and lowest hourly energy prices each day in the wholesale market, while the developer receives a fixed revenue stream for a utility-scale project. The buyers do not take on the operational risk that is associated with other utility-scale storage projects, and the storage does not need to sit alongside an energy generation system such as a solar plant.
The company said in a statement that the deal would be “particularly effective” in markets with high or rapidly growing renewable energy penetration, due to the inverse relationship between the value of renewable energy PPAs and that of battery storage.
At the same time, it gives storage operators a consistent revenue steam so they can finance projects.
Bryce Smith, LevelTen’s chief executive, said the sector does not yet have the right financial infrastructure to “deliver reliable value streams” to both energy buyers and storage owners.
The platform was launched earlier this year in Europe, and is now due to be rolled out in the US market.
Smith added that offering storage owners a fixed income from the RE-Store agreements provides them with a more secure revenue stream to finance projects.
Power Purchase agreements (PPAs) that combine renewable energy and battery storage have become more common in recent months, with LevelTen facilitating a similar agreement between Starbucks and developer Terra-Gen this month. Starbucks signed a power purchase agreement (PPA) to purchase 24MW of solar power and 5.5MW of battery storage from the Edwards & Sanborn energy project currently under construction in Kern County, California. The coffee company said the deal will supply renewable energy for 550 of its stores in the state. However, PPA-style contracts solely for energy storage are uncommon.
Smith said the RE-Store Energy Agreement “closes this gap” in the market and could complement a business’ existing renewable contracts while also offering storage owners “full operational control, allowing projects to optimize all asset revenues, including capacity and ancillary services.”