Last week newcomer Pivot Power grabbed headlines by revealing it was moving ahead with a plan to deploy 45 50MW batteries with up to 100 rapid electric vehicle chargers, a move seemingly ripped from National Grid’s playbook.
While the system operator has told Current± that it is not the same as what had previously been proposed by its electric vehicle lead Graeme Cooper, which could see such chargers deployed at motorway services, it is still involved as Pivot is proposing to connect its batteries directly onto the national transmission network.
Until now, most battery developers have connected to the distribution system and therefore deal with the network operators working on this regional basis. With developers jostling for grid connections and overcrowding the ancillary services market, Pivot Power made the decision to take a new approach with a new business model.
The phased roll-out is expected to take place over five to six years depending on the speed of fundraising achieved. However the directors behind the new company are confident their approach will take off, as they recently explained to Current±.
'Competitive and commercially viable'
“It is a unique business model that we are seeing as competitive and commercially viable and therefore will definitely expect [competition] and we of course welcome that,” said chief executive Matt Allen.
Joined by chief technical officer Michael Clark and chief operating officer Matthew Boulton, the trio have brought their experience from developer Become Energy to the new proposition.
Clark said: “We are using the knowledge we've got from Become Energy in terms of the battery technology and the built environment, very much using that at Pivot Power to build much larger infrastructure and aligning that with EV charging. It is the same team, and using the same knowledge we've built up over time.
“From the battery side there's quite a lot of overlap - same vendors, quite often slightly different technology just due to the magnitude we're looking at and dealing with much different voltage levels on the transmission system.”
Despite taking on a new approach with EV charging that, until now, has proved difficult to grow revenue with owing to the low penetration of EVs on UK roads, investors are likely to look favourably on the proposition thanks to the decision to stick with the short (one hour) duration lithium ion batteries they have become comfortable with.
Clark continued: “I think the nature of the last few years has meant investors have got much more comfortable with battery revenues and the costs they have to bear to get them up and running.
“The beauty of the battery plus model where we are on the transmission system and we can add future electric vehicle revenues mean they've already got comfortable with the big ticket item which is the battery and all of these add to the business model rather than take it away.
“We are talking to investors who do see EV charging as quite a major piece of the energy system and they are interested in being first movers in that.
“What we’re doing is providing the infrastructure to enable that to happen in the future at the right price. Pivot Power has a desire to be part of the revolution and a facilitator and get rid of those barriers that are consistently talked about by potential EV customers, which is range anxiety and lack of infrastructure. We really want to be part of that and want to be part of the solution.”
Working at scale
In order to achieve this goal, the company will seek to utilise its batteries in the grid services and balancing markets
But where other competitors operate on the distribution network level, Pivot Power’s approach on the transmission system will offer greater scale in accessing these revenue streams while also allowing the company to make a big energy trading play.
This, combined with the potential revenue streams from electric vehicle charging - which Colin Corbally, partner and head of investment strategy at investor Downing said could become the main revenue stream of the network – offers some protection from uncertainty surrounding the market.
Under the shadow of National Grid’s System Needs and Product Strategy (SNAPS) review, Clark explained that the company is hoping to ensure that it is not locked out of providing any services or accessing any revenues.
However, Pivot remains in open conversation with National Grid as its customer working on the transmission system. This dialogue is set to continue over the months and years to come as the company sets out to deploy its batteries, which Allen says is a key solution for ensuring cooperation across the industry.
“We will be working with the industry to provide the services required. At the same time we are building up that capability and know how in house as well to play a more active role in the operational side of all this and making sure this is all optimised across the lifetime of the assets.
“This is an industry that needs to work together and not against one another so we absolutely welcome the advancement of battery storage as a solution,” he concluded.
Time will of course tell as to how cooperative industry will be with the first mover in Pivot Power and its march onto the transmission system, but if successful the company may well not be the last to adopt a new approach in the changing energy infrastructure landscape.