Key considerations in battery storage offtake agreements

FlexGen’s battery storage system in Fort Wayne, Indiana (Courtesy: FlexGen)

Contributed by Nathan Santamarina

Within the quest for dependable, renewable-sourced baseload energy, utilities, and industrial offtakers have turned to utility-scale electro-chemical battery power storage techniques (BESS) to stabilize capability by intermittent useful resource swings and meet coverage demand for low or zero-carbon power. Although not a brand new know-how, the proliferation of BESS initiatives prior to now few years has meant that even seasoned builders, operators, and utilities are coming to grips with the quite a few idiosyncrasies of contracts on this sector for the primary time. Nowhere are these extra acute than in the primary income contract that facilities on the economics and authorized dangers of a BESS challenge: the storage offtake settlement. This text is meant to make clear a number of distinctive options of those agreements and spotlight key points that have to be thought of in structuring and negotiating BESS offtake agreements in at this time’s market.

Supply: Division of Vitality International Vitality Storage Database.
  1. The menu of merchandise and enhancing efficiency

A BESS challenge’s contractual offtake construction hinges on the product(s) the system sells. BESS initiatives have the technical functionality of offering a variety of companies. Globally, when deployed for power, BESS initiatives’ most distinguished present use is for transmission congestion aid companies, black begin ancillary companies, and distribution reliability companies, in line with the Division of Vitality. When deployed for capability attributes, bulk power companies (particularly renewable power time shifting) comprise the lion’s share of the use circumstances. The actual menu of merchandise to be bought to the offtaker will in fact have vital impacts on the construction and phrases of the general offtake settlement. For functions of this text, we’re assuming initiatives are meant on the market of capability alone, power alone, or each, implicating a number of of the beforehand talked about use circumstances.

For initiatives that promote solely capability and capability attributes, builders and their prospects must contemplate whether or not there are circumstances when saved power might be marketed to 3rd events when not required for dispatch to the offtaker. In lots of capacity-only offtake preparations, charging power is generated by the offtaker itself and is tolled by the challenge with the offtaker retaining title all through, thereby eliminating third-party gross sales. For capacity-only preparations the place offtakers don’t provide charging power, the BESS should as an alternative supply power both by a mixed and linked technology supply (e.g., a solar-plus-storage facility) or through buy of power from the grid. On this case, the challenge proprietor might want to have the proper to promote such saved power to 3rd events, offered it maintains its capability and every other dispatch obligations to the offtaker.

The menu of merchandise a specific challenge sells may also form the efficiency checks required by the offtaker to show the challenge’s efficiency capabilities previous to preliminary industrial operation. For instance, energy-only offtake agreements will usually give attention to testing and guaranteeing dispatch availability, charging charges, discharge period, put in precise capability (to the extent not already integrated as a operate of calculating dispatch availability), and ramp charges and response occasions. In distinction, ramp-rate and response time testing for capacity-only agreements could also be of much less significance to an offtaker whose wants are much less tied to frequent dispatch calls for. If the offtaker can also be the charging power provider, round-trip effectivity (RTE) shall be an vital system efficiency attribute, which frequently ends in both a contractually assured RTE credit score for superior storage effectivity and/or an evaluation of corresponding liquidated damages for extreme storage losses. In sure mixed generation-plus-storage initiatives the place power created by a linked technology facility is partially bought on to the offtaker and partially saved after which bought to the offtaker, RTE ensures for the storage element should still make sense, since inefficient charging and storage charges will diminish each saved and direct power gross sales from the technology facility. Thus, the specified performance-driven system’s use case and the way that efficiency is demonstrated have to be rigorously thought of by the developer and the offtaker and set out clearly within the offtake settlement.

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2. Fee buildings: flat vs. punctuated equilibrium

Fee buildings throughout long-term storage offtake agreements usually comprise a typical thread of a hard and fast month-to-month cost for the precise storage capability of the ability (measured in MW), whatever the power really discharged within the interval. That is as anticipated in a capacity-only association, however can also be frequent to energy-only offtake eventualities. Within the latter case, there’s a distinction between the product delivered (MWh of power) and the fee construction for the challenge ($/MW of capability) that nonetheless is commercially workable offered the capability cost is sized appropriately to cowl O&M and financing prices.  In each circumstances, the periodic, dedicated capability funds can assist long-term restricted recourse challenge financing for the storage challenge.  Further variable costs, or adjustment to the fastened funds, may additionally be required to cowl precise demand-related operational prices. 

These market norms for offtake agreements are, nevertheless, not the one fee buildings current out there.   Some utilities have proposed an alternate construction to long-term capability funds that includes a big, up-front fee to the system proprietor upon achievement of business operation. This upfront fee would represent, for instance, 70% of an agreed internet current worth for the challenge, calculated by multiplying an agreed $/MW-of-capacity worth by the challenge’s nameplate capability. On this state of affairs, the remaining 30% of the challenge’s NPV can be paid out in equal periodic installments, ostensibly overlaying the O&M prices, any remaining debt service, and the proprietor’s return on funding. This construction appears nearly too good to be true till factoring in two additional particulars: first, in trade for a 70% industrial operation fee, the proprietor is required to submit efficiency safety equal to all the fee; and second, the offtaker locations an absolute prohibition on liens on the asset, together with as would safe challenge financing after the industrial operation date. Factoring these in, industrial lenders can be unlikely to lend to such a challenge on a long-term, unsecured foundation, but the big efficiency safety would require some sort of collateralization or asset base. Mixed, the proprietor would seemingly be compelled to hold the price of capital after industrial operation by itself stability sheet. The industrial viability of such an association stays to be confirmed.

3. Pricing: How a lot is sufficient?

An extra complication for builders and utilities to think about is methods to worth  any revenues the challenge may generate after the offtake time period (e.g., service provider revenues or signing-up a substitute offtake contract), and the extent to which such worth must be thought of throughout the offtake settlement itself. An offtaker may recommend that such valuation be thought of on the outset of the offtake contract if the time period of the contract is shorter than the anticipated lifetime of the challenge,  and on this foundation push to scale back the worth of month-to-month capability funds. There are a number of key dangers to this. First, there may be residual, unproven know-how threat, since utility-scale BESS projcts haven’t been in operation lengthy sufficient to guarantee house owners and their lenders of income flows as many as 15 years after industrial operation. Additional, the present dynamics within the BESS storage market are so unstable, with evolving applied sciences, falling prices, fluctuating utility and state PUC requirements and unsure non-public demand that correct predictions of service provider revenues on the finish of any long-term settlement are terribly troublesome to mannequin. Lenders, in fact, can be reluctant to lend previous the dedicated offtake time period, however buyers too might search to restrict their publicity.  Thus, accounting in current capability pricing for NPV values of future revenues after the offtake time period could also be a non-starter within the utility-scale technology area. Builders will predictably push to have the pricing mirror the price of constructing, proudly owning and working a storage facility just for the dedicated time period of the settlement.

4. Capability score: How usually is just too usually?

How often ought to a plant’s capability be examined? The capability score of a challenge is its key income driver since funds and pricing are usually structured on a $/MW foundation. Nonetheless, as a matter of chemistry, BESS initiatives are in a relentless state of degradation. Builders know methods to work round this, by a mixture of facility overbuild, augmentation, enlargement, and substitute. However degradation patterns are usually not at all times steady and predictable on this evolving technical area, particularly the place the BESS challenge’s operational use can differ and be strained (even inside agreed working use limits).  With their fee obligations tied to capability, offtakers will in fact wish to know as quickly as they’ll if their funds now not match as much as the precise capability of the system. On the identical time, they in fact need confidence {that a} minimal capability degree is at all times current, and in pursuit of it will search agency capability provide commitments, whereas assessing liquidated damages and imposing strict termination rights when capability falls brief. A key debatable level, due to this fact, is methods to set, take a look at, and reset the capability score of a plant over the time period of the offtake settlement.

The capability score of a extra conventional photo voltaic plant, as an example, is unlikely to be examined after passage of commissioning checks, since degradation patterns in PV modules are extra predictable and well-proven and output capability is extremely variable due to the intermittence of photo voltaic power. BESS challenge offtakers, nevertheless, usually search way more frequent testing regimes, in some circumstances as usually as month-to-month, and in others upon demand. Builders and offtakers—inversely to one another— ought to view this with each a way of warning and alternative. On the one hand, frequent capability checks can, along with being administratively burdensome and expensive, imply that short-term efficiency shortfalls shall be promptly recorded, lowering month-to-month funds between checks and even triggering liquidated damages. On the flip facet, frequent testing permits a plant to reset its score after a short lived, curable shortfall or after a capacity-enhancing augmentation funding.

For example, contemplate the next state of affairs: A 100 MW name-plate BESS challenge is obligated to keep up capability at 98% of nameplate in the course of the time period; month-to-month storage funds are calculated on a $/MW of as-tested capability foundation as much as a cap of 105% of nameplate; and month-to-month testing is remitted underneath its storage capability offtake settlement. The system was overbuilt by the developer and often achieves 105 MW in its testing. Because of a threat occasion contractually allotted to the developer, nevertheless, the capability was examined in a single month at 98% of nameplate, inflicting a reset of the month-to-month storage capability fee all the way down to the identical 98% of nameplate (and additional down from the 105 MW), however just for the outlier month. Now contemplate this state of affairs the place testing happens yearly: the momentary drop within the instantaneous month would scale back developer income for as much as the following twelve months.

Thus, there’ll at all times be pressure between the developer and the offtaker relating to the frequency of capability testing.  No matter the place the glad medium falls, it appears affordable and in each events’ curiosity for the developer at all times to have the chance to instantly remedy and retest following a low or failed capability take a look at. In all occasions, the testing and curing phrases have to be rigorously thought of and clearly spelled out within the drafting of the offtake settlement.

5. LDs All Round: Substantial Completion vs. Business Operation Deadlines

An offtaker might generally search to impose liquidated damages for delays past said deadlines in a challenge’s achievement of every of “substantial completion” and “industrial operation”. Such a place is presumably based mostly on the idea that substantial completion situations are decided primarily by the underlying engineering, procurement and development association, and that industrial operation is often outlined independently, with each overlapping and generally distinct situations, by both the offtaker or, in sure utility circumstances, a regulator. The doubling of those assured milestones, nevertheless, must be thought of in mild of authorized enforceability guidelines and industrial causes. To be enforceable as a matter of legislation, liquidated damages have to be an inexpensive estimate of an offtaker’s precise damages. Substantial completion milestones in offtake agreements, nevertheless, might not assume achievement of a challenge’s precise industrial operability in any respect, that means monetary losses for an offtaker for failure to ship product wouldn’t but have materialized. Thus, liquidated damages for delayed substantial completion which might be charged on a $/MW per day foundation would solely be an inexpensive estimate of damages if the delay in attaining substantial completion induced a delay in attaining industrial operation past the industrial operation deadline. On this case, an offtaker would in actual fact be unable to well timed obtain MWs of contract capability within the anticipated industrial operation interval. Nonetheless, if the industrial operation is in actual fact achieved by that deadline, then the offtaker won’t have suffered a lack of obtainable capability, and any previous delay in attaining substantial completion would have induced no precise damages. The appliance of liquidated damages on this occasion would represent a penalty that will be unenforceable as a matter of legislation.

An offtaker should still argue the industrial logic of imposing liquidated damages for delayed substantial completion on the premise that such delays forecast a commensurate delay to industrial operation and the last word materialization of economic loss. The liquidated damages, on this case, are meant to mirror heightened threat, somewhat than precise loss. A decision of this pressure between enforceability and industrial logic, due to this fact, might lie in including to the settlement a mechanism that reduces day by day delayed substantial completion liquidated damages to the variety of days (if any) which industrial operation is definitely delayed. For example, if substantial completion is 10 days delayed, however industrial operation is achieved by its assured date, then the proprietor must be refunded the entire delayed substantial completion liquidated damages. Correspondingly, if substantial completion is 10 days delayed but industrial operation is simply 7 days delayed, delayed substantial completion liquidated damages must be assessed solely on 7 days of delay.

Within the absence of this mechanism, challenge house owners might be able to problem the legality of considerable completion liquidated damages clauses, placing offtakers within the place of getting to display precise damages arising from a delay in attaining substantial completion. That expensive and time consuming “demonstration” (i.e. a dispute course of) might be forestalled by cautious foresight and drafting of the offtake’s liquidated damages clauses.

6. Charging prices, station load, and storage losses

Duty for charging prices and station load and storage losses might differ relying on the kind of challenge and the know-how deployed. Charging prices are operational prices straight tied to the periodic charging of the BESS, resembling dispatch and distribution service costs handed by from a utility, and extra operational prices incurred within the strategy of charging, and should, relying on the construction of the offtake association, embody the per-unit value of the charging power itself.  Station load losses (aka station service) usually embody day-to-day energy draw required by the BESS as a way to function usually and apply to such capabilities as followers, local weather management and HVAC techniques, lighting, cooling tower capabilities, safety, and different auxiliary techniques of the ability. Storage losses consult with unusual degradation of the state of cost of a BESS as usually happens in electrochemical storage techniques.

In a renewable generation-plus-storage challenge, the related renewable technology station will usually decide to promoting 100% of its power to the offtaker, whether or not by the instant sale of generated power, or delayed sale of saved power. This time delay causes each a delay in money circulation (saved power will not be monetized till someday after the second of technology) and a discount within the general quantum of power bought resulting from station load losses and storage losses. If the related technology challenge’s power will not be obtainable, the proprietor could also be required to make direct purchases of charging power from the grid and may have the latitude to take action (topic to relevant grid issues). This construction locations full accountability for charging power prices (together with potential arbitrage and financial savings) and storage losses within the arms of the challenge proprietor.

As talked about above, a challenge that’s totally depending on the grid for its charging power, nevertheless, would usually supply its energy from the utility offtaker itself by a tolling association through which the offtaker/charging power provider retains title to all saved power. Find out how to account for station load and storage losses is a significant consideration within the storage offtake settlement.

Within the case of storage losses, the mix of delays between charging and discharging of the BESS, inevitable degradation within the BESS parts which can cut back charging effectivity, and potential defects can add as much as vital hits to a challenge’s RTE. These losses will usually be borne by the proprietor, topic to reasonable allowances mirrored in an RTE assure mechanism.

Within the case of station load losses, the parasitic energy consumption required to function the BESS tools, specifically the energy-intensive air flow and cooling techniques wanted for sustaining protected facility working temperatures, considerably transfer the needle – actually – of a battery’s state of cost (SOC). Offtakers usually demand that this power loss be metered and paid for individually from any charging power equipped to the battery. Whereas this offers simplicity and readability round station load losses, not all BESS EPC contractors, together with a number of the main suppliers, permit for separate metering for station use. In these circumstances, adequate allowance within the RTE assure of the offtake settlement may also must be built-in to account for this substantial energy draw. Setting the RTE allowance turns into extra sophisticated in initiatives positioned in locations with vital seasonal (and day by day) temperature fluctuations – station use for cooling in summer time warmth (or daytime highs) will seemingly be considerably greater than within the chilly of winter (or lifeless of evening). Business and technical groups must work rigorously by the RTE assure calculation to handle this weather-related station load threat. It could possibly be that RTE ensures must be structured to trace seasonally-adjusted station load curves. Mixing station load and storage loss metrics right into a single RTE calculation has another drawbacks. In occasions the place station use is proscribed (both resulting from seasonal temperature fluctuation or operational effectivity), no matter RTE flexibility is afforded underneath the RTE assure can be utilized for unusual storage losses brought on by pure or operationally-caused capability degradation. This favors challenge house owners in some respects however masks important efficiency shortfall warnings. It turns into troublesome in these circumstances for offtakers and house owners to carry challenge operators to effectivity requirements inside their management. BESS suppliers which might be capable of individually meter station load might due to this fact be a preferable possibility in initiatives the place RTE is tightly measured.

Lastly, industrial choices have to be made and documented regarding the price (and eventual discharge) of charging power previous to the industrial operation date. Since offtakers typically don’t really feel dedicated to an unproven challenge, they’re reluctant to pay for any pre-COD charging power, even whether it is tolled by, in the identical method, it will be after industrial operation. An answer to that is for offtakers to bear the price of charging power however then have the proper to obtain the financial good thing about the sale of any discharged power originating from charging power obtained previous to industrial operation. Within the absence of viable third-party sale choices, offtakers would then be obligated to buy the discharged power at an agreed substitute value (usually linked to an appropriate market charge for energy within the area of the challenge).

7. Availability ensures: high quality vs. amount

The dynamics and pitfalls of BESS efficiency ensures might fill an entire different article of 10 key points. Right here we spotlight one of many subtlest and most extreme that’s usually proposed and too simply neglected in utility offtake preparations: the function that precise capability performs in measuring precise availability. Historically, availability is a measurement of a plant’s skill to discharge power of any amount at a given cut-off date. The main focus of an availability take a look at will not be how a lot energy, however if there may be energy in any respect, reflecting the standard of operation and fundamental technical sturdiness of the ability.  Availability is thus an on/off ratio measurement for a plant, as measured over a selected time period. Many offtakers, nevertheless, suggest an availability calculation formulation that includes a plant’s precise capability as a part of the measurement. That is usually integrated along with a separate capacity-specific calculation and assure. As such, a challenge with faltering capability measurements would run the chance not solely of tripping its capability assure but additionally its availability assure, thus triggering double liquidated injury funds because of the identical underlying difficulty.

Ideally, availability-applicable measurements might be totally divorced from capability readings, in every case as expressed within the calculation formulation. Establishing each short-term capability checks that measure solely MW capability at a cut-off date, and period-capacity checks that measure capability in MWh over a number of hours (or from full cost to zero cost) would permit for an availability take a look at that doesn’t additionally incorporate the variable of capability. It will make clear the character of any specific efficiency shortfall (i.e. just one key variable is measured per every take a look at), and permit an offtaker to be appropriately compensated by fairly assessed liquidate damages, as wanted. The place a celebration makes a technical justification for incorporating capability measurements into calculations of availability, we advise together with a transparent prohibition on doubling liquidated damages assessments for a similar capability shortfall if it implicates each the capability and availability ensures.

8. Truthful and authorized: Find out how to construction termination funds

Harsh termination-for-default cures have labored their approach into the storage offtake market such that defaulting house owners could also be required to speed up and payout, as a kind of liquidated injury (with out using such time period) the total internet current worth of all remaining storage offtake capability funds underneath the time period. Moreover, house owners usually are required to supply huge efficiency assurances, which can tempt these extra aggressive offtaker cures at termination. However as mentioned beforehand in respect of liquidated injury assessments at substantial completion, blanket termination fee provisions which have little-to-no bearing on precise losses or damages suffered by an offtaker resulting from an proprietor default could also be unenforceable. Moreover, in typical purchase/promote contracts, a non-defaulting occasion is obligated to cowl and mitigate its losses by searching for substitute sources for the merchandise. Due to this fact, broad-brushed, over-reaching termination funds shouldn’t be the norm. As an alternative, termination treatment provisions ought to account for precise financial losses suffered by the offtaker consequently (after mitigation) of the termination, together with precise third-party prices incurred in unwinding related hedges or in getting into into substitute preparations.  

One metric for demonstrating financial loss is to fairly calculate the distinction (if optimistic) of the current worth of a substitute storage offtake association much less the current worth of all funds remaining underneath the time period of the terminated offtake settlement. The financial loss calculation might be flipped for offtaker defaults, the place the optimistic distinction (if any) between the current worth of funds underneath the terminated settlement and the current worth of substitute preparations must be paid out. One additional contractual step that may fairly settle termination cures can be to internet any quantities owing to a defaulting occasion on the time of default from any financial loss and prices of the non-defaulting occasion. Taken collectively, such provisions set up each a industrial stability between the events and would survive evaluation for unenforceability, thereby offering events certainty and avoiding disputes.

9. Pressure majeure exceptions

Pressure majeure is a authorized, industrial and operational thicket of points. We spotlight briefly right here three core points that usually come up within the drafting and negotiation of storage offtake preparations.

First, the type of storage offtake agreements (or their time period sheets) usually printed in RFPs are notoriously devoid of specificity over which obligations are excusable by drive majeure. Sure obligations are expressed so completely of their drafting that the authorized intention of drive majeure could possibly be argued to be restricted in that case, eradicating any aid for the obligated occasion. For example, an RFP draft time period sheet might set up sure assured dates for key challenge milestones, with out clarifying whether or not such dates could also be prolonged resulting from occasions of drive majeure. Is the assured nature of the milestone meant to override Pressure Majeure protections? Or, the place availability ensures are set out in a contract, does the prevalence of a drive majeure occasion relieve an proprietor from attaining the provision warranty, and/or does the provision calculation formulation consider durations of drive majeure induced outage? The anomaly in these examples could possibly be detrimental to an proprietor’s curiosity, and expensive to each events the place the paradox results in disputes.

Questions over the applicability of drive majeure clauses might be considerably resolved by way of cautious and exact contract drafting. The drive majeure clause itself must be drafted in such a approach as to point the scope of a celebration’s obligations to which drive majeure aid could also be accorded; this scope usually covers all obligations of a celebration apart from fee obligations. The broad software of drive majeure may additionally must be accompanied by exact references to aid at numerous factors in a contract and/or how aid shall be accorded. Including in particular reference to drive majeure, nevertheless, might result in ambiguity about why drive majeure aid is explicitly referenced in respect of 1 obligation, however not one other, even the place the intention is for it to use to each. Due to this fact, particular and exact drafting must be added to point that advert hoc references of drive majeure aid don’t prejudice the final software of drive majeure aid to contract obligations, and are merely inserted for readability or so as to add particular nuance to how drive majeure aid is accorded in particular eventualities.

Second, utility offtakers generally have management over facility charging and discharging in addition to an affect (if not management) over curtailment choices and obligations. These and different offtaker rights and obligations might be integrated into drive majeure clauses to the good thing about the proprietor, to the extent they stop or hinder an proprietor’s operation of a facility. For example, a utility might search to press onto house owners the chance of curtailment resulting from grid congestion when ordered by a transmission or system operator, even the place the utility or its affiliate is the transmission or system operator and has discretion and an financial incentive to curtail some power and capability sources and never others. An Proprietor must be entitled to drive majeure aid for such dangers since they’re solely outdoors of its management.

In some circumstances, curtailment might not really have an effect on core proprietor obligations. For instance, in a capacity-only contract, relying upon how precise capability is measured, it might be doable for an proprietor to nonetheless measure and meet its capability ensures, even the place the plant has been curtailed by the grid operator. This requires contractually insulating the proprietor from grid threat by establishing within the contract efficiency requirements and metering factors that may be measured solely by inner plant operation, to the exclusion of exterior grid availability.

And third, batteries current a recognized however misunderstood security threat: fireplace. A latest high-profile Tesla megapack challenge in Australia caught on fireplace in July of 2021 throughout testing and pulled all the system offline till early December of that 12 months. Greater than 40 different such fires have occurred inside large-scale lithium-ion BESS, the bulk throughout the previous 3 years. The depth and longevity of lithium-ion battery fires could make such incidents extremely dangerous for dry, fire-prone areas or dense city environments. Due to this fact, drive majeure provisions must be clear sufficient to handle and allocate fireplace dangers in addition to associated regulatory dangers if authorities deem sure BESS applied sciences too harmful to function of their respective jurisdictions. Now, drive majeure clauses usually accord aid for government-ordered shutdowns or different regulatory adjustments that make challenge operation costlier or unattainable. But when regulatory orders are directed at BESS initiatives typically, or the kind of system deployed by an proprietor notably, it begs the query of who ought to bear the hindrance, change in security regulation, or shutdown threat. Given their severity, cautious drive majeure drafting ought to deal with these eventualities and so allocate threat explicitly prematurely of the prevalence of such incidents.

10. Knowledge sharing obligations

Final, however not least, and although it might seem to be a small piece of the general operations of a BESS challenge, operational information can have huge worth for each house owners and their utility offtakers. Each are searching for to navigate – and compete over – advanced, unproven, and evolving applied sciences whereas using a fluctuating and unpredictable market. But broad latitude in an offtake contract for offtakers to request – or absolute obligations to demand – facility operational and capital value information can result in disclosure of delicate working, proprietary, financial and monetary data that might jeopardize an proprietor’s aggressive edge. Nonetheless, language in offtake contracts setting out reporting and information sharing obligations are sometimes set out as an on-demand, blanket handover activity of any information associated to the sale of the merchandise or required to substantiate prices for the challenge. These requests ought to as an alternative be rigorously pared again to the precise information that’s fairly required by utilities’ protected and environment friendly monitoring of their power and capability suppliers. Typically, utilities are obligated by native system operators, public utility commissions, and federal regulatory our bodies to supply particular units of knowledge on producing belongings like BESS initiatives. These necessities additionally must be enumerated so far as doable in the course of the drafting and negotiation of the offtake settlement. The data sharing obligation must be tailor-made to these necessities. If regulatory reporting obligations change, they’ll make efforts to accommodate the data switch, as required by legislation. We recommend spelling out the reporting obligations as exactly and fairly as doable, due to this fact, as a way to keep proprietor enterprise confidence.


The wild world of BESS challenge growth and the correct commercialization of the comparatively new and at all times evolving applied sciences deployed can catch many seasoned power-industry house owners and offtakers off guard. We’ve tried to assist events grasp only some of the numerous distinctive options of those offtake preparations, to assist events side-step a number of the extra well-known contractual gaps which will result in unintended outcomes or protracted disputes. Extra so than in well-established offtake preparations resembling renewable technology PPAs, offtake contracts for BESS initiatives nonetheless require vital, project-specific inventive and demanding thought to form and keep the meant deal for the lifetime of the challenge. We hope this text kick-starts that course of for events assessing the core income contract for these initiatives.

Concerning the creator

Nathan Santamaria is a principal on the boutique power transactions legislation agency Mercer Thompson LLC, based mostly in New York. His observe focuses on challenge growth and financing of renewables belongings throughout the Americas, the place he represents each blue chip corporations and start-up builders, from mega initiatives to distributed technology portfolios. Nathan’s expertise covers the spectrum of renewables applied sciences, together with battery power storage, wind, photo voltaic and rising efficiency-oriented and low-carbon initiatives.