No ‘Honeymoon Period’ for Energy Storage Deals
Summary
From PacifiCorp to NV Energy, a growing number of major American utilities are drawing up aggressive plans to add storage capacity. But the company continues to spend half a billion dollars a year investing in new wind farms, and it owns more than 3 gigawatts of renewables capacity. Today’s storage systems, by contrast, are taking on a far larger set of tasks, from firming utility-scale renewables to plugging capacity and resource adequacy holes in regions where older power plants are retiring. The storage market seems to be “skipping the honeymoon period,” said Himanshu Saxena, CEO of the Starwood Energy Group, a private-equity investor in a range of generation and transmission assets. And these [assets] are being cycled far more than what people expected.” One way for storage developers to lock in a degree of revenue certainty is by granting dispatch rights to a utility, which can then call on the batteries when needed.