Procurement contract for a 50kw integrated energy storage cabinet for a chemical plant

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4 Frequently Asked Questions about “Procurement contract for a 50kw integrated energy storage cabinet for a chemical plant”

What are the different types of procurement contracts?

There are three key types of procurement contracts—power purchase agreements (PPAs) or energy storage services agreements; engineering, procurement, and construction (EPC) agreements; and build-transfer agreements (BTAs)—and several key risks that must be allocated between the parties.

How do energy storage contracts work?

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.

Can a contractor get tax incentives for a solar-plus storage system?

(For a privately-owned solar-plus storage system) The Contractor may be eligible for tax incentives associated with the PV and BESS. To qualify, the BESS must only charge from the solar PV system, and this PV-only charging must be documented throughout the BESS operating life.

What is a PPA for new energy storage resources?

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.

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