Statkraft has agreed a “forward trade” for a battery storage system owned by customer Statera Energy, eliminating price risk for the asset’s trades.
Forward trades backed by battery capacity will help flexible assets to smooth out their earnings by forward-hedging portions of their income, said Statkraft.
Usually, battery assets are optimised in the frequency response market where power auctions take place on the day before it delivers energy to the grid, as well as in the “intra-day” market, when trades take place on the day of energy transfer.
This means the financial return secured for a battery storage asset owner would depend on short-term price fluctuations in the energy markets.
Statkraft has created a “forward trade” product for sites such as Statera’s Creyke Beck Storage project, located near Hull in the UK.
In forward trades, the sale or purchase of power is agreed in advance of delivery, so Statkraft simultaneously sells the overnight power to charge the battery and buys the evening peak power discharge in volumes appropriate to the asset’s technical capabilities.
This eliminates Statera’s price risk, because the new forward trade product locks in the buy and sell prices at the same time.
This will also benefit the wider energy system by adding a new source of liquidity to the forward market as the energy system transitions to a lower carbon generation mix.
This new arrangement is part of a 15-year strategic partnership between Statkraft and Statera Energy, the UK-based developer, owner and operator of flexible generation and grid-scale storage capacity, who are working together to optimise approximately 800MW of flexible assets, including operational projects and those in development.
Brian Lonn, Statkraft’s Head of UK Flexibility, said: “Although battery forward trading has been discussed in the past, we believe that the transaction we’ve conducted on behalf of Creyke Beck Storage is the first to have been completed successfully using this kind of structure.
“It is a very exciting moment for us and Statera, as it represents the start of a new way to manage the risk and opportunities of their battery portfolio. We’re looking forward to continuing our partnership with them in the years ahead.”