UK water company Northumbrian Water will trial energy storage systems at several of its UK sites next year.
The systems, comprising second-life lithium ion batteries from Renault electric cars, will be installed in north-east England and in the counties of Essex and Suffolk.
An installation and revenue sharing contract is expected to be signed by Northumbrian Water and its partners, including Argonaut Power, by the year end. The batteries will be commissioned by Autumn 2019.
Argonaut Power, backed by investor Ingenious, is supplying the behind-the-meter storage systems and will manage their operation, taking a share of income earned.
The energy storage units will mainly be used to manage energy loads and reduce energy spend, by recharging with lower cost electricity at night for providing power during high-cost evening peak times. The batteries will also earn revenues by providing grid balancing services.
Energy storage engineering outfit Connected Energy provided the battery systems.
Strategic advisor Ikigai Capital provided a bankable structure for the pilot.
Argonaut managing director and Ingenious senior investment director Roberto Castiglioni said: “We are excited to enter into an exclusive partnership with Northumbrian Water to install and manage behind-the-meter storage at some of their critical sites.”
He said the utility had been collaborative and supportive in structuring the projects.
“We believe we have created something unique and innovative through a combination of technical and financial engineering. As far as we know, we’re the only fully-funded solution offering 30-year storage installations to commercial and industrial customers under a revenue sharing agreement, boosting site profitability,” Castiglioni added.
Northumbrian Water energy development manager Anthony Browne said: “Large-scale battery storage is going to be a major feature of the electricity industry going forward and this is a great opportunity for us to develop our understanding of these processes.
“We expect that having batteries on site can also help us obtain more value from any renewable energy we generate on our sites.
According to Browne, the bespoke solution has been based on addressing the various elements of Northumbrian Water’s strategy, such as local content, innovation, sustainability and customers’ value.
He said: “We were certainly impressed by Argonaut’s ability to deliver results in line with our expectations.”
Connected Energy chief executive Matthew Lumsden said: “It’s great to be working with Argonaut and Northumbrian Water on this opportunity. This project has been built with innovation and sustainability in its DNA, from our second life battery energy storage systems through to the new operating and financing models.
“We’re very proud to be involved in a project that will demonstrate how companies installing behind-the-meter energy storage can generate new revenue streams while simultaneously bolstering their sustainability credentials.”