Dive Brief:

• LevelTen Energy announced Thursday a new type of financial contract through which corporations and load-serving entities can invest in large storage projects.
• LevelTen's platform for connecting renewable energy buyers to wind and solar products is expanding through the RE-Store Energy Agreement, a virtual contract that would reduce energy portfolio volatility without adding operational risk to buyers.
• The deal comes a week after Starbucks announced a virtual storage agreement and virtual power purchase agreement that would power more than 550 stores in California, through LevelTen.

Dive Insight:

LevelTen's online marketplace had previously offered wind and solar contracts, but the company has worked on de-risking transactions for energy storage as prices of lithium-ion continued to come down, said Rob Collier, the company's vice president of developer relationships.

The contract type is expected to offer billions of investment for the development of large-scale energy storage projects, which would not be co-located with renewable energy projects or other types of generation.

Through its storage virtual agreements, a buyer does not receive payments based on the actual performance of an energy storage project. The developer pays the buyer the difference between the highest and lowest hourly prices each day in the wholesale energy market, in exchange for a fixed revenue stream of a larger, utility-scale project.

"[T]he industry has thus far lacked the transaction infrastructure to deliver reliable value streams to both storage buyers and storage owners,” Bryce Smith, CEO of LevelTen Energy, said in a statement.

The portfolio approach to purchasing energy storage capacity allows customers with smaller energy needs to invest in the economic larger products. For instance, Starbucks in contracting 24 MW of solar and 5.5 MW of energy storage from a larger project expected online before 2021 in Kern County, California. The project, developed by Terra-Gen consists of 1,118 MW of solar and 2,165 MWh of energy storage, claiming to be the largest solar-plus-storage project to date in the world.

The Starbucks announcement served as a proof of concept for the storage financial agreement for other companies that have similar energy needs and clean emissions goals, Collier said.

The new type of contract "affords storage owners full operational control, allowing projects to optimize all asset revenues, including capacity and ancillary services," Smith said.