Photovoltaic energy storage battery procurement

Checklist provides federal agencies with a standard set of tasks, questions, and reference points to assist in the early stages of battery energy storage systems (BESS) project development.

Note rising interest in value streams that are locally realized, e.g., time-shifting to balance rising distributed energy resources (DERs) locally. Battery storage can prevent solar over-production, while facilitating local high-renewables goals. It also may sometimes defer the need for a distribution upgrade (non-wires alternative).

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.

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.

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.

Operating Limitations: Energy storage resources may be subject to operational constraints that do not affect traditional generation projects. For example, certain battery technologies will degrade more quickly if the state of charge is not actively managed within a certain range.