So you’ve built your battery project – now what?

Published June 2017

With >400MWh battery projects due to come online in the UK in the next 18 months alone, it’s time to plan how to track whether these projects are performing.

I’m afraid this blog is about something quite unfashionable.

You see, the storage sector is ablaze with debate on battery degradation, revenue-stacking, and how to futureproof projects through smart design and warranties. These topics are of course important, and are certainly keeping the Everoze team very busy.

However, I’m interested in a slightly more prosaic issue. The question in my head is this: how do we track that these battery projects are actually performing as intended, once operational?

Urgency

Despite being almost entirely overlooked at storage seminar/conferences, battery project performance monitoring will soon become a pressing industry issue, due to the large number of projects on the verge of construction. Everoze expects that >400MWh batteries will become operational in the UK within the next 18 months alone – and this is almost certainly an underestimate.

In particular, there are a number of milestones when battery system performance demands close scrutiny, including:

1. In early months – to check performance of new players, contracting structures and technology combinations: We’re seeing a number of new EPC contractors enter the sector – some of whom have zero storage track record. Investors will likely want to pay close attention to system performance during early months, to get comfortable that any teething issues are being adequately addressed.
2. At the end of Year 1 and Year 2 – to release developer premiums: A proportion of the developer premium may be contingent upon satisfactory operation, with performance bonds being released upon staged acceptance milestones. This money will only be released upon satisfactory performance.
3. Following key warranty assessment periods: Performance and degradation will be assessed against key parameters at set intervals in line with the contracts and to keep the contractor’s honest.  Independent checks on contractor calculations could be valuable.
4. Upon a revenue stack reset: Asset owners will seek to assess the asset’s ability to provide different services, in response to market/regulatory changes, or upon expiry of an aggregator contract.
5. During acquisition: Buyers will want to understand battery state of health, to estimate the residual value of the asset.

Here are our top tips to track whether your storage project is performing  

1. Learn from renewables: Best practice from renewables provides vital lessons. Identify the key metrics, delve deeper to understand the true picture, scrutinise measurement data integrity.
2. Adopt robust technical metrics: Key items to check might include, for instance, system availability, average service performance measure, roundtrip efficiency, energy throughput and battery state of health, including degradation. These metrics should be tailored to the requirements of the project revenue contracts.
3. Remember to include commercial indicators too: A critical difference between storage and renewables projects is the more proactive management of revenue stacking required. Key considerations might include, for instance, frequency response tender success rate, or updates to revenue stacking prioritisation. Review of performance testing will be key.

Send me your comments!

I’m interested to know if others are similarly considering how to monitor battery project performance, once operational. Do you agree that this issue is important – and that it is conspicuous by its absence on the conference circuit? Are you including monitoring costs in your project budgets? Please send your comments to contact@everoze.com. I look forward to hearing your thoughts!