In the context of a solar project, the power contract covers both the solar and energy storage systems, as they are typically treated as a single system. There is a natural synergy between the two.
While several provisions of these PPAs are appropriate for energy storage contracts, there are issues unique to energy storage that warrant special consideration. This article discusses 10 issues that deserve careful analysis when drafting offtake contracts for energy storage facilities.
For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.
In an energy storage tolling agreement, the seller develops, owns, and operates the energy storage system, while the offtaker supplies charging energy. Therefore, the energy in the system belongs to the offtaker.
The power contract covers both the solar system and the energy storage system. There is a natural synergy between them. The storage system, typically comprised of batteries, can charge from the solar system and then provide back-up electricity at times of no or low sunlight.
It’s generation . . . it’s transmission . . . it’s energy storage! The renewable energy industry continues to view energy storage as the superhero that will save it from its greatest problem—intermittent energy production and the resulting grid reliability issues that such intermittent generation engenders.