New model agreement for pooling revenue streams in storage projects

Invest-NL today launched the Energy Storage Agreement to support the leasing of battery capacity to third parties. This agreement has been developed in cooperation with SemperPower, developer and operator of Energy Storage Systems (EOS), by working towards a generic agreement that can be widely used in the market based on a specific case from practice.

The agreement can be used to formalize arrangements between storage provider and customer. This makes it easier for battery operators to apply the "revenue stacking" model in which capacity is chopped up into pieces and thus revenue can be created in different markets. In this way, the battery owner continues to operate the battery itself, and can pool different revenue streams to achieve higher revenue. Parts of the battery's capacity can be leased to third parties at predetermined times, in which it is important that the agreements made here are well documented.
Examples of potential customers of the storage capacity are wind and solar farms, grid companies and industrial customers. The standardized agreement established in this FTR can be used for this purpose.

Making Storage Financable

In late 2020, SemperPower approached Invest-NL with a financing request that was difficult to fund. The main reason was that no comfort could be found with the market risk perceived by financiers. SemperPower was unable to raise the required portion of debt financing.

Invest-NL Business Development identified the underlying bottleneck and decided to help the company through an FTR project, in which consultants and lawyers looked into the business model, the valuation of such a model and as a final product the legal formulation of in a model agreement.

Energy Storage Agreement

The Energy Storage Agreement (EOO) is entered into between the buyers of the capacity and the battery operator. This agreement can then be used to provide security to financiers of the battery and can serve as collateral. Key topics covered in the agreement include obligations, fees, liability and penalties for failure to meet nominations and collateral.

Download energy storage agreement consultation model - Invest-NL