About General Contracting Project Energy Storage System Procurement
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6 FAQs about [General Contracting Project Energy Storage System Procurement]
What is the general contracting structure for a battery energy storage system?
The first, and the topic of an earlier article, is the general contracting structure. Developers of battery energy storage system, or BESS, projects are using a multi-contractor, split-scope contracting structure instead of the more traditional single-contractor, turnkey approach. (See "Battery Purchase Contracts" in the December 2021 NewsWire .)
What is the largest energy storage procurement in China's history?
The tender marks the largest energy storage procurement in China’s history. In what is described as the largest energy storage procurement in China’s history, Power Construction Corporation of China (PowerChina) is targeting an unprecedented cumulative storage capacity of 16 GWh. The bids were opened on December 4.
How do energy storage contracts work?
For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.
How does a storage system procurement process work?
Once finalized, procurement contracts will be signed, eliminating the need for separate tenders. This procurement covers a comprehensive range of services beyond the delivery of storage equipment, including system design, installation guidance, commissioning, 20-year maintenance, and integrated safety features.
What happens if a supplier is shortlisted for energy storage system equipment?
In the future, as specific projects are implemented and procurement needs clarified, the shortlisted suppliers will be directly invited to engage in secondary competition, either through negotiated procurement or competitive bidding, to determine the final supplier for the required energy storage system equipment.
Should a battery procurement contract aggregate liability in a collective project?
For example, if a developer has a number of projects supplying battery storage under a single offtake contract, then it might prefer a single battery procurement contract aggregating liability in the collective project, given that liability under the offtake contract may be connected for failure to develop the collective project.
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