Leclanché has recently signed an agreement with Enel Green Power, which is the renewables division of the Enel Group, and wind energy supplier Enertrag, to form a JV to construct a €17m battery storage plant in Cremzow, Germany, for completion by the end of 2018. The terms of the JV and the value of the contract to Leclanché have not been disclosed. Together with a smaller (2MW/4MWhr) project with NRStor in Canada and a 15MWhr project with swb in Germany, this 33MWh/22MW project represents 37% of the 140MWh of capacity we model for delivery in FY18, underpinning our estimates, which we leave unchanged.
The new battery storage project is Enel Green Power’s first commercial storage plant. It will be used as part of the primary control reserve (PCR) mechanism in the state of Brandenburg, evening out imbalances between electricity generation and consumption to maintain grid stability. This is critical as the state shifts away from using lignite for power generation to renewables, switching from a predictable power output to a highly variable one. The project highlights how battery energy storage systems are playing an increasingly important role in grid stabilisation. They provided about 200MW of power, representing 31% of the German requirement in 2017. For Enertrag, the project provides a potential route for improving its efficiency, as at peak production times, surplus wind energy may be saved in the battery energy storage system rather than curtailed (wasted).
It is encouraging to note that Leclanché is a strategic partner in the project, acting as turnkey systems integrator and EPC (engineering, procurement and construction) contractor, integrating battery and power conversion systems and energy management software, as well as supplying the battery modules. This confirms that the company is moving up the value-chain.