At a time when analysts are watching with interest to see where European energy storage projects are going to find their future revenue, French utility giant EDF gave its backing to one prospective model this week.
Its acquisition of the U.K. battery storage and electric vehicle infrastructure developer Pivot Power is a nod to how it views the future composition of the revenue stack for energy storage.
With tenders for frequency response and various other grid services maxed out, utility-scale energy storage has been on something of a hiatus in Europe.
Pivot Power has 40 projects in development in the U.K. All are proposed at 49.9 megawatts (energy infrastructure over 50 megawatts gets channeled through the national rather than the local planning process). In addition to bidding for contracted revenue, such as frequency response, its batteries will also participate in the power markets.
Pivot’s differentiator is a third pillar of revenue derived from building private wire connections from the batteries to “megawatt-scale” EV charging sites.
Matthew Boulton, Pivot Power’s chief commercial officer, told GTM that the contribution from EV revenue would “evolve” over time, with ancillary services and trading revenues doing the heavy lifting.
“As a rule of thumb, the battery is 90 percent of the capex and over 90 percent of the revenue in the early years,” he said. “But scroll forward 10 years, and across the portfolio, we expect the EV side to be generating 30 percent of the revenues.”
“By virtue of what we’re offering, this is new cable we’re laying, so we’re only interested in megawatt-scale offtake,” Boulton continued. “The typical model for a middle-of-the-pack project [is that] in 10 years we’ll see 10 megawatts of daytime peak demand and 10 megawatts of overnight demand. We’ll be laying cable for 25-megawatt absolute peak and expecting to contract for 10 to 12 megawatts.”
The Pivot deal brings EDF’s trading expertise to the fore, and Boulton considers the acquisition an endorsement of the contribution batteries can play in trading markets — namely, intra-day, day-ahead and the balancing mechanism.
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