Commercial scale battery energy storage systems are a relatively new concept. The lack of familiarity has led to some interesting questions - our answers might put your mind to rest.
Q. Won’t it just be like solar and the Government will cut all the subsidies and tariffs?
A. The revenues from battery storage are not Government subsidies (extra payments intended to grow a specific industry). National Grid has a need for services to help it respond to the growing demands on our system and will contract with providers to buy (pay for) those services. It is forecasted that National Grid’s need for those services will continue to grow.
Q. Batteries are falling in price all the time; why shouldn’t I just wait until next year and install it at half the cost?
A. Two reasons:
1. Battery prices have reduced dramatically but that downward curve is levelling off and there are upward pressures on prices (such as the supply of raw materials).
2. Battery storage systems can protect your business, generate savings and revenues NOW so every day waiting represents benefits lost. There is a clear and quantifiable cost of delay.
Q. It’s so complicated; everyone I speak to gives me a different answer. Why can’t anyone provide some certainty over the solution and benefits?
A. There is already risk and uncertainty in the future price of energy and the reliability of our electricity system. The installation of a battery storage system mitigates much of that risk and uncertainty. Furthermore, we would put your system in the capable hands of KiWi Power with vast experience in managing such systems for the benefit of its clients.
Q. I understand the technology, but don’t see how I’m going to sell this to my Financial Director. Can you help me?
A. Yes, we can provide a fully costed business case for you along with various finance options (including a free fully-funded option). We’d be happy to support you explaining the proposal to your FD.
Q. There’s only a couple of these installed in the UK. Why should my site be the guinea pig?
A. Tesla built their first system in December 2012 and has since deployed >300MW in over 18 countries and the number of installations is growing globally at a significant rate. Most notably the massive 100MW Hornsdale Power Reserve in South Australia was switched on at the beginning of 2018 and has proved itself many times over. It even surprised its owners when it responded to the unexpected outage of a coal-fired power station in just 0.14 of a second. You would therefore not be a guinea pig but in esteemed company.
Q. If I install it and it doesn’t produce a 23% ROI, will you refund the difference?
A. No, sadly not. Is any investment in business guaranteed? If you expand production, can you guarantee sales? Can you guarantee you’ll never have an expensive power outage? What we can say is through our aggregator partner, KiWi Power, your investment will be in safe hands as KiWi will maximise its value for you.
Q. My bonus targets are based on 2018 Earnings Before Interest & Tax (EBIT). Can you guarantee the quoted £Xk of benefits will be delivered this year?
A. We can’t guarantee the benefits because the energy market is always changing, but we would ask you; what impact would a couple of hours power outage have on bonuses?
Q. My bonus targets are based on 2018 Earnings Available for Commons shareholders (EAC) or EBIT; is there any way that you can install this without purchasing the battery?
A. Yes, we have investors who will fully fund the battery and agree on a share of the benefits with you in return for a small piece of land on your site to locate the system.
Q. I’ve already got 2=two transformers, multiple switch-rooms and a wind turbine on site; how will you ever manage to configure a battery into this as well?
A. As experienced High Voltage electrical engineers, we have all the necessary in-house capabilities to work out how to connect, be it at High Voltage or Low Voltage.
Q. I don’t like Tesla cars; they’re just too big. The batteries all seem to be just as bad. Does Volvo or Polestar sell commercial batteries?
A. Each to their own when it comes to cars; in our view, the Austin Allegro was vastly underrated! Joking aside, it is the versatility, control systems, battery cells and warranty envelope that matter in a stationary battery energy storage system. The Tesla cells have been proven in their cars in over a billion miles driven.
If you have found yourself asking these questions, then we do hope that we have offered some clarity. If you would like to explore these questions in more detail or have additional questions please do contact Rock Clean Energy today.