“Finding the right way to secure flexible, but still reliable, grid import and export access for storage—so we do not have to reinforce grids to add storage flexibility—is still something where we lack a European best practice model,” he said.
Hansen therefore sees flexible and reliable grid access as the key policy question for which the industry and governments still needs to find a solution.
However, when asked how he sees the role of TSOs evolving, he said: “Most TSOs are sitting on their hands—and need to analyse, demand and incentivise what BESS can do for them and their stakeholders.”
Financing and commercialisation
Grid is likely to be a big talking point at the event in a few weeks’ time, but so will the topic of project financing and deciding the mix of tolling and merchant revenues.
Last week we published an ESN Premium article on that topic after hearing from other event speakers, which you can read here.
“Merchant is currently the most attractive in all our markets but in Denmark, for example, tolling is a profitable alternative,” Hansen said, weighing in on the topic.
He added that some markets have tolling agreements that ‘make everything easy’, while in some markets banks have been positive to hybrid and co-located projects that offer a hedge between revenue on PV capture prices and energy market spreads.
“Some banks are mature, some are open for BESS as new opportunities, and some are afraid.”
The best optimisers, meanwhile, are those that “have an eye for all possible revenue streams including spreads, ancillary, capacity, tolling and CfD (contracts for difference),” he said.
Technology
We also touched on some of the big topics in BESS technology today. Hansen sees higher capacities and built-in fire safety solutions as some of the key new features that suppliers are bringing.
However, there is an issue around control software and whether this can be made in China or not. The majority of BESS is manufactured in China, but concerns around cybersecurity make it hard to apply control software originating or controllable from China.
Grid-forming BESS is agreed by many to be the next frontier of what BESS can do on the grid, but Hansen said that this is much more common outside of Europe, pointing to China, the Middle East and Australia as good examples.
When it comes to long-duration energy storage (LDES), Hansen sees a need but “not much traction” in Europe.
See other Q&A pieces with event speakers published in this series below: