Energy storage lease intention contract

How do energy storage contracts work?

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.

What are the operational limitations of energy storage?

Operating Limitations: Energy storage resources may be subject to operational constraints that do not affect traditional generation projects. For example, certain battery technologies will degrade more quickly if the state of charge is not actively managed within a certain range.

What is augmentation in energy storage?

Augmentation: In the context of energy storage, “augmentation” refers to the process of adding storage capacity to a project over time and is typically seen in the context of battery energy storage projects.

Can energy storage resources be financed on a nonrecourse basis?

Key Finance-ability Provisions: Energy storage resources may also be financed on a nonrecourse basis and, like any other project financed in such manner, will need to address issues upon which nonrecourse lenders will focus, including assignment, events of default, performance requirements, key dates, and collateral.

Can energy storage reduce peak demand?

For such a customer, an energy storage project may allow the customer to reduce its peak demand periods, and thus the associated demand charges, by reducing grid power consumption during its peak periods (so-called “peak shaving”).

Are performance requirements included in a long-term services agreement (LTSA)?

If a long-term services agreement (LTSA) is entered into in connection with a BTA or EPC (some owners may require that the parties enter into an LTSA as a condition of the underlying BTA or EPC), the performance requirements may also be incorporated therein.