Long-term Procurement Contract for Smart Photovoltaic Energy Storage Containers

4 FAQs about Long-term Procurement Contract for Smart Photovoltaic Energy Storage Containers

What are the challenges of procurement for utility-side storage & solar-plus projects?

The challenges of procurement for utility-side storage and solar-plus projects center largely on early-stage decisions: defining the top-priority use case, but also exploring ways to get more value out of the project and to prepare for market changes over its life.

How do energy storage contracts work?

For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.

What are the different types of procurement contracts?

There are three key types of procurement contracts—power purchase agreements (PPAs) or energy storage services agreements; engineering, procurement, and construction (EPC) agreements; and build-transfer agreements (BTAs)—and several key risks that must be allocated between the parties.

What is a PPA for new energy storage resources?

Some PPAs for new energy storage resources have been structured as capacity-only contracts in which the developer is responsible for the sale of energy and all costs associated therewith—including the costs of the required energy procured from the utility.