BW ESS and Penso Power sign BESS tolling agreement with Shell Energy

Global energy storage owner-operator BW ESS and battery storage developer Penso Power have signed a seven-year tolling agreement with Shell Energy Europe Limited for their Bramley Battery Energy Storage System (BESS), currently under construction in Hampshire, UK.

According to the partners in a release, the deal is the first announced long-term tolling agreement – a contract allowing access to the battery’s power when needed – for a single BESS asset in Great Britain, creating a template for a new revenue structure that will help to unlock energy storage market opportunities across Europe.

The fixed-price tolling agreement for the BESS provides revenue certainty for BW ESS and Penso Power, while Shell Energy will trade the Bramley BESS into a range of ancillary services and wholesale markets.

The 100MW/330MWh Bramley site is the first project in Europe to deploy Sungrow’s PowerTitan 2.0 liquid cooled BESS – a system that combines a 2.5MW Power Conversion System using integrated string inverters and a 5MWh battery into a single container.

This has enabled BW ESS and Penso Power to deliver a 330MWh project within a relatively small project footprint. Bramley is expected to be the longest-duration BESS in the UK at the time of commissioning, which is expected in Q4 this year.

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“We are thrilled to partner with the highly experienced energy trading team at Shell on this project,” said Erik Strømsø, CEO of BW ESS. “Bramley showcases our commitment to advancing energy storage solutions that set the bar for the wider market – while pioneering new models for project financing and operation.

“This tolling agreement, which has been some time in the making, demonstrates the attractiveness of longer-duration, higher-performance battery systems. It not only secures long-term revenues for Bramley, but also helps enable the market’s shift away from short-term frequency response towards load shifting.”

Richard Thwaites, CEO at Penso Power, added: “We are pleased to continue our relationship with Shell with another innovative contract structure to de-risk revenues and support project funding. The floor contract we agreed with Shell on our Minety battery storage project back in 2020 became a template for the industry and this tolling agreement for Bramley breaks new ground. It represents a coming of age for the battery energy storage sector.”

Rupen Tanna, Head of Power and Systematic Trading at Shell Energy Europe, said: “The Bramley battery system is one of the most sophisticated longer-duration assets under construction in the UK and will provide us with unmatched capabilities for portfolio optimisation.”

“Tolls have been a feature of conventional energy trading for many years. By extending the business model to battery storage, Shell has the trading experience to add significant value, while supporting the UK’s ongoing energy transition. The experience gained through these early tolling contracts will be invaluable to the wider market.”

The BESS agreement commences upon commissioning of the Bramley project in Q4 this year.

Ashurst LLP acted as legal advisors to BW ESS and Penso Power and Shell used its own in-house legal team.