Q1 2020 Perspective for Batteries and Storage

In Episode 5, after a new shortened introduction, the Troutman Pepper Battery + Storage Podcast team highlights 2019 developments in the grid-level storage market, and sets the stage for battery project development and finance issues that face industry stakeholders in 2020. The team references its first four episodes of the podcast, in particular, the discussion with Mike Hopkins in Episode 2 regarding challenges facing stand-alone grid-level battery finance.

The team discusses a Q1 2020 Wall Street stock analyst’s report describing stand-alone battery finance as driven by merchant plays (in comparison to integrated utility entities that develop such assets on the company’s balance sheet). The team concurs with the analyst’s report, noting that they have seen stakeholders face interesting issues in developing PPA-type contracts to secure battery financing, including risk identification and mitigation associated with product and service definition(s), performance assurances, warranties, and other issues. Battery merchant risks are borne by developers to the extent Regional Transmission Organization product markets are underpriced, or not yet in existence.

The team discusses state-federal regulatory issues that linger over battery project development, but shouldn’t. They focus on the parties’ briefs to the DC Circuit on appeal of Order No. 841, and raise a “Listener Mail” question about how to think about Standards of Conduct compliance for a hybrid (generation-transmission) battery.