Statkraft, one of Europe’s largest renewable power generators, has agreed a “forward trade” for a Statera Energy battery asset in what has been called an “industry first” by the companies.
In this agreement, which is part of a 15-year strategic partnership, Statera will purchase power in advance of delivery for battery assets. In doing so, it will prevent the company from being susceptible to fluctuations in the frequency response market which includes the “day ahead” and “intra-day” markets.
The forward trade agreement will impact several Statera-owned battery assets including the 50MW Creyke Beck Storage project situated in Hull.
Introducing a forward trade for battery assets could enable further liquidity within the market and benefit the wider energy system as it transitions to low carbon energy generation.
“We are delighted to have concluded our first forward trade with Statkraft for one of our 50MW battery assets, Creyke Beck Storage. Working with Statkraft to access the forward markets this winter, we have materially enhanced the risk/return profile of the revenues on our battery storage and flexible generation portfolio,” said Tom Vernon, managing director of Statera.
“This new and innovative forward trade builds on our existing strong relationship with Statkraft and is a testament to its collaborative and sophisticated approach to asset optimisation.”
Via the forward trade agreement, 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 assets’ technical capabilities.
In doing so, the customised forward trade product could be used across a range of battery assets in the UK and could help increase investor confidence in the sector by eliminating price risks witnessed within the frequency response market.
“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,” said Brian Lonn, Statkraft’s head of UK Flexibility.
“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.
“This also demonstrates how Statkraft is constantly bringing innovation and new thinking to utilising storage and flexible generation projects in Great Britain’s energy market. This customised product can be utilised by any of our customers and will help bring greater returns and more certainty to their portfolios. We’re anticipating a great deal of interest in it.”
Statera announced in November 2022 that a 50MW battery energy storage facility situated in Malmesbury, Wiltshire, had entered commercial operation. At the time, the completion of Minety South Storage 2 took Statera Energy’s total operational portfolio to 350MW. The portfolio included 150MW of battery storage and 100MW of gas-fired flexible generation with a further 100MW battery storage project said to be due for completion in 2023.