Thrive Renewables and Aura Power have launched a joint venture that will install and operate batteries for industrial and commercial users free of charge, sharing the revenues.
The companies are targeting businesses spending at least £500,000 a year on electricity.
Thrive plans to invest around £20 million over the next 12-18 months at an initial 20-30 sites that will probably together represent around 40MW of onsite storage.
Revenue lines are likely to vary depending on the location and site characteristics, Matthew Clayton, managing director of Thrive Renewables, told New Power. Revenues would come from fast frequency reserve contracts with National Grid – that would be the “primary value element”, he said – and from savings in the host site’s energy bill, as the companies avoided use of system charges (by triad avoidance) and network red periods. The batteries will also compete in the Capacity Market auction but “we are quite realistic about that proportion”, said Clayton, referring to low prices in the recent auction and government decisions to de-rate batteries with short discharge periods. He added, “Six months ago it would have been all about the Capacity Market”.
“We plan to pool the benefits of the flexibility between ourselves and the host site on an open book basis that includes savings on the electricity bill and revenues accessed through grid services”, Clayton said. The host sites – which make no capital investment – will get between 10% and 20% of the income. Customers with a mid-range 2MW battery could save more than £1 million over a 15-year standard contract, the companies said at the launch.
Aura Power will operate the batteries and contribute technical management. The joint venture is currently in talks with aggregators.
“We are offering businesses a straightforward solution. We take the investment risk, manage the development, and operate the battery to maximise mutual returns. We agree a contract with the customer, they can get on with their core business and save tens of thousands from year one,” said Clayton at the launch.
Simon Coulson, director of Aura Power, said: “We are already in advanced talks with several clients including a large dairy, a food processor and a tile manufacturer.”
Clayton said these 20-30 sites would be ‘phase one’ of a planned larger programme. Before the company moved to step two it would assess the status of regulation and flexibility markets, as well as other industry changes like the move to active distribution networks who might also procure flexibility services.