The evolution of BESS revenue models with Louise Dalton (Partner @ CMS Law)

The conversation centers on contracting and managing risks in energy storage projects, particularly battery storage, within the context of Great Britain and expanding into markets like Germany, Poland, and the Middle East. Louise Dalton from CMS shares insights on revenue structures, including floors and tolls, and the increasing innovation in ancillary services and wholesale market products. The discussion highlights the saturation of frequency response markets and the shift towards wholesale trading, emphasizing the importance of revenue certainty for investors. Challenges related to grid connections, regulatory changes, and the complexities of co-locating solar and storage are also addressed, alongside a contrarian view on whether sufficient institutional capital will be available to meet ambitious energy storage targets.

Outlines

Part 1: Introduction, Background

Part 2: Revenue Models, Market Evolution

Part 3: Tolling Agreements, Risk Allocation

Part 4: Portfolio Diversification, Green Energy

Part 5: Large-Scale Projects, Co-location

Part 6: Regulatory Reform, Grid Connections

Part 7: Policy, Legal Frameworks

Part 8: Networking, Future Outlook

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Transmission

Part 1: Introduction, Background

00:00Introduction to Contracting and Risk Management in Energy Storage Projects

Introduction to Contracting and Risk Management in Energy Storage Projects

00:41Louise Dalton's Journey into Battery Storage and Regulatory Challenges

Louise Dalton's Journey into Battery Storage and Regulatory Challenges

02:25CMS's Extensive Involvement in GB Battery Storage and Global Expansion

CMS's Extensive Involvement in GB Battery Storage and Global Expansion

Part 2: Revenue Models, Market Evolution

05:13Revenue Lessons Learned in GB Battery Storage: Market Saturation and Innovation

Revenue Lessons Learned in GB Battery Storage: Market Saturation and Innovation

07:32Frequency Response Market Saturation and the Shift to Wholesale Trading

Frequency Response Market Saturation and the Shift to Wholesale Trading

10:14Revenue Certainty: Understanding Floors and Tolls for Battery Assets

Revenue Certainty: Understanding Floors and Tolls for Battery Assets

Part 3: Tolling Agreements, Risk Allocation

12:45Toll Agreements: Negotiation Complexity and Risk Allocation

Toll Agreements: Negotiation Complexity and Risk Allocation

15:20Revenue Distribution and Asset Degradation in Tolling Agreements

Revenue Distribution and Asset Degradation in Tolling Agreements

17:38Toller Bankability and Debt Financing in Battery Storage Projects

Toller Bankability and Debt Financing in Battery Storage Projects

19:47Toll Agreement Timelines and Resource Allocation

Toll Agreement Timelines and Resource Allocation

22:32Materiality and Availability Definitions in Tolling Agreements

Materiality and Availability Definitions in Tolling Agreements

25:09External Factors and Risk Sharing in Tolling Agreements

External Factors and Risk Sharing in Tolling Agreements

Part 4: Portfolio Diversification, Green Energy

27:03Portfolio Risk Diversification for Tollers with Renewable Assets

Portfolio Risk Diversification for Tollers with Renewable Assets

28:3924/7 Green Energy Supply and the Role of Storage

24/7 Green Energy Supply and the Role of Storage

30:23Certificates of Origin and the Monetization of Storage

Certificates of Origin and the Monetization of Storage

32:20Revenue Potential of Half-Hourly REGOs and the Stackable Business Case

Revenue Potential of Half-Hourly REGOs and the Stackable Business Case

Part 5: Large-Scale Projects, Co-location

33:31Legal Considerations for Larger Battery Storage Sites

Legal Considerations for Larger Battery Storage Sites

34:59Challenges in Building and Maintaining Large Battery Projects

Challenges in Building and Maintaining Large Battery Projects

36:30Co-location of Solar and Storage: AC Coupling and Cost Sharing

Co-location of Solar and Storage: AC Coupling and Cost Sharing

38:00Legal Challenges in Co-located Projects: Contracting and Offtake

Legal Challenges in Co-located Projects: Contracting and Offtake

40:24Scenario Modeling and Legal Obligations in Co-located Projects

Scenario Modeling and Legal Obligations in Co-located Projects

Part 6: Regulatory Reform, Grid Connections

42:40Regulatory Change: Planning and Long Duration Energy Storage

Regulatory Change: Planning and Long Duration Energy Storage

44:15LDES Implementation and ESO Releases

LDES Implementation and ESO Releases

45:37Review of Electricity Market Arrangements (REMA) and Zonal Pricing

Review of Electricity Market Arrangements (REMA) and Zonal Pricing

47:21Zonal vs. Reform National Pricing Options

Zonal vs. Reform National Pricing Options

48:42Connections Reform: Addressing the Grid Connection Queue

Connections Reform: Addressing the Grid Connection Queue

50:30Strategic Alignment and Investor Certainty in Connections Reform

Strategic Alignment and Investor Certainty in Connections Reform

52:57Six-Monthly Application Windows and the Workability of Regulatory Change

Six-Monthly Application Windows and the Workability of Regulatory Change

Part 7: Policy, Legal Frameworks

53:45Policy Decisions and the Role of Ofgem

Policy Decisions and the Role of Ofgem

55:20Grandfathering and Investor Certainty in Zonal Pricing

Grandfathering and Investor Certainty in Zonal Pricing

57:50CMS's Energy Team and the Increasing Regulatory Workload

CMS's Energy Team and the Increasing Regulatory Workload

59:39Judicial Review and Challenge Options

Judicial Review and Challenge Options

Part 8: Networking, Future Outlook

1:01:41Plugs: Passion for Energy Storage and the Women in Energy Storage Network

Plugs: Passion for Energy Storage and the Women in Energy Storage Network

1:03:15Contrarian View: Concerns About Institutional Capital Investment in Storage

Contrarian View: Concerns About Institutional Capital Investment in Storage