How can government tenders be structured to better support long
Cost-Effective Procurement: Implement procurement mechanisms that are cost-effective and favor efficient technologies, as highlighted in the NY Energy Storage Roadmap.
Recent contracts are predominantly for much larger transmission-connected energy storage projects. Earlier energy storage contracts were significantly more expensive across all grid domains, and they generally reflect the cost reductions seen in the global storage industry.
These contracts allocate the risks of project development, construction, and performance between the parties and include the price that will be paid by the utility for the resource or the energy storage services that are to be provided.
The CPUC Energy Storage Procurement Study aims to improve data practices by addressing the lack of comprehensive and quality-controlled actual project characteristics and operational data across all resources and grid domains.
These contracts are particularly prevalent in Texas, which is an energy-only market (i.e., there is not a separate market for the sale of capacity). As a result, many energy storage resources will enter into hedges that will provide them with some fixed revenue streams to facilitate a project financing.
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