Kiwi Power is to build a 4MW battery storage unit at Cenin Renewables’ Bridgend site in South Wales.
The 4MW battery will sit within Cenin’s cluster of integrated clean technologies which includes a low carbon cement facility, 3,000 PV solar panels, an anaerobic digestion plant and a wind turbine.
Kiwi developed and financed the battery. CEO Yoav Zingher told The Energyst that firm frequency response (FFR) would be one of the battery’s main revenue streams, having secured a contract from National Grid in August. Delivery for that contract is due in February 2018.
“We have multiple ways of monetising it, FFR is one of them,” said Zingher. He added that the ability to access multiple revenue streams was vital due the volatile nature of markets and uncertainty around some contracted products.
Smart money?
He added that developments that combine multiple forms of generation, such as Cenin’s ‘cluster’ model, mean batteries can potentially create business models that derive greater revenues than the sum of individual components.
However, Zingher agreed that those business models, without guaranteed revenue streams such as feed-in tariffs, demand some appetite for merchant risk.
While some solar developers are “catching up and there are a lot of people interested,” Zingher pointed out that “there is a lot of talk and not very many projects [yet] built”. He believes “there is a class of money that will never be able to take this kind of merchant risk”.
However, he said that is no different to existing ‘markets’ for some forms of decentralised generation.
Zingher alluded to the recent changes to revenue streams such as Triad export payments (rule changes which are now being challenged by diesel generation operators).
“It has always been that way [with inherent risk], but everybody closed their eyes to it. The Escos financing diesel farms believed that they had certainty. We know we do not have certainty and can price it in accordingly,” said Zingher.
As such, he said, “investors in our projects are making higher returns than investors in diesel projects.”
Behind the meter
Zingher said behind the meter projects were “hopefully” where volume in the battery storage market would settle.
“It seems like it is the natural place for these types of projects to be. Big batteries in the middle of nowhere can do stuff for the grid, but 20-30 smaller projects at customer sites can provide better value for them and better value for the whole system, so consumers pay less across the board.”
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