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A pivotal play?

Tom Palmer Tom Palmer Managing Consultant
5th November 2019

On the 4 November, EDF Renewables UK agreed to acquire Pivot Power. Pivot Power is a UK start-up which aims to build 50MW batteries connected to the Transmission Network and provide rapid Electric Vehicle (EV) charging nearby.

The firm announced plans in 2018 to develop up to 2GW of batteries connected directly to the transmission system. The move would require investment of up to £1.6bn and Pivot Power looked to secure this from investors and specifically through crowdfunding.

Two to tango

The Transmission Entry Capacity (TEC) register currently shows that Pivot Power have just shy of 1.8GW of battery storage projects in the process of scoping, awaiting consents or consents approved. As of 31 October 2019 Pivot Power has 67% of the battery storage capacity in the TEC register across 36 sites.

The investment is important for both parties in very different ways, given recent developments and future plans. For Pivot Power, they have the connections agreed to the transmission network in which they negotiated ahead of many other parties in the market with National Grid. However, they lacked the capital to develop the projects and meet the increasing and ongoing collateral requirements for the connections they have secured.

Teaming up with EDF Renewables UK will give Pivot Power access to a large business customer base and provide the opportunity to interact with customers closer to planned deployment sites. It could also offer the opportunity for partners to provide a combined energy supply and EV charging opportunities to businesses willing to relocate, such as distribution centres, closer to connection points.

The Waltz

The potential opportunity for EDF Renewables UK and its generation business will be a growth area and help offset the reduction in its thermal generation capacity. The closure of Cottam Power station and uncertainty around the proposed Sutton Bridge B mean the generation portfolio is limited to West Burton A (1,975MW coal) and West Burton B (1,333MW CCGT), West Burton C (299MW OCGT) and Enhanced Frequency Response 49MW battery on the site of West Burton B.

The Pivot Power planned portfolio is a step change from EDF Renewables UK's current generation fleet and provides a different approach to the traditional business by focusing on providing stability, flexibility and vehicle charging to the market. This development reduces the reliance on the wholesale market, while allowing it to maintain its dominant position in the generation market. These new assets will also be able to provide shape, flexibility and reliability which is not available from its nuclear generation portfolio by meeting its customer’s needs.

Ballet

EDF Renewables UK also could integrate storage solutions into its existing and growing renewable fleet, potentially co-locating or providing baseload solutions to corporates through a combination of wind and storage. Alternatively, it could allow the business to capture flexibility revenues or mitigate imbalance exposure.

Quickstep

Pivot Power fits in well with EDF Renewable North America's acquisition of electric vehicle technology company PowerFlex System given the desire by Pivot Power to develop rapid EV charging. The investment is expected not to alter the day to day running of the business, with EDF recently acquiring several organisations and letting them run separately to the core business.

The key challenges will be around flexibility revenues, electric vehicle roll out and getting customers to locate close to valuable connection point to extract the full value.