Utility Week

connec on applica ons, and generally to get going", says Allen. "We've not disclosed how much investment we've had, but it's in the millions." Pivot has just launched a funding round for Q1 and Q2 with the goal of raising £250 million for its first 10 ba ery network sites. Downing has invested more than £500 million in renewable energy. Allen says that Southampton will be the first site because Na onal Grid was able to make it immediately available and it was the most straigh orward to get opera onal. He adds that Pivot is working closely with local councils to ensure there is support and to facilitate the planning process. Local authori es that are commi ed to improving the environment and where there are air quality issues have been par cularly enthusias c, he says. "All of the different sites we own will have their unique requirements and customer base. We are working with communi es to establish those ambi ons. Some mes the links within communi es will be at council level, and some mes this will be at the private level – or with local landowners, where we might be able to build a vehicle charging hub. "But we do start at the council level; this is because we want to have their support." The chargers may be at hubs, but connec ons could go straight to large users, to bus depots, taxi and delivery van fleets, within a five-mile radius of the ba ery site. "A number of companies are dipping a toe in the water in terms of having electric vehicle fleets; our USP is that we have the ability to scale up with those organisa ons," Allen says. "We're looking at a distribu on centre with 20 rapid chargers. As we start scaling up with the uptake of EVs, we will be able to increase the volume to those sites." OPPORTUNITIES AND RISKS So will Pivot be able to raise the huge investment that will be needed to deliver this ambi on, and what are the risks? The great opportuni es for ba ery-based storage combined with the expected growth in electric vehicles is an a rac ve proposi on for investors. But, as Allen acknowledges, there is s ll Brexit to come, and snap policy changes outside the private sector's control always make for risk. "We have a view that storage is the greenest solu on when it comes to flexibility – compared to interconnectors and gas fire plants and pumping hydro-plants." He talks through Pivot's investment model and how ba eries can provide a number of services and income streams. The first is in trading electricity, filling up during the cheap me and selling back when demand is highest; the second is in ancillary services, providing a balancing mechanism and frequency response to the Na onal Grid; and the third is to act as a backstop to the capacity market. The capacity income stream was never planned to be huge, he says, but he doesn't foresee the market stalling permanently, referring to the judgement by the European Court of Jus ce in November 2018 which ruled the UK capacity market to be illegal. He expects that Pivot will appeal to investors who take the view that the EV market will scale up and that demand for charging will rise in future. The government announced plans last year to ban petrol and diesel cars by 2040, and the past four years has seen a surge in EV registra ons, up from 3,500 in 2013 to more than 195,000 by the end of January 2019. But that isn't to say Pivot is undertaking a risk-free venture. "There are always risks: policy and regulatory risks – those things always scare investors – Brexit, of course," Allen acknowledges. "But if you look at the spread of the wholesale market, it's an enormous opportunity – par cularly because you can be paid to take surplus electricity." He doesn't give a figure on the payback period, and says the rate of return will be different for each site. The key, he says, is to be aligned with what the investment criteria required. Interest in inves ng in Pivot is coming from mul ple sources, he says – incumbents in the market (power companies and oil companies alike) and also from infrastructure and pension funds. "To cement anything new there will always be challenges, but investors so far have been posi ve," he says. "The key is making sure we have the right investment partners on board – partners who believe in the vision." Other risks include the bo lenecks in the EV industry, such as the lead me from placing an order for an EV to actually having it roll off the produc on line and delivered to the customer. "There are enormous opportuni es for flexible storage," Allen says. "We are managing the controllables, which is all we can do. "At Pivot Power we need a business plan that morphs to meet the needs of energy systems; the adaptability mindset is within our DNA." What about the emergence of compe on? Allen is relaxed: "We would welcome others replica ng what we're doing. Our skill is about trading to maximise revenue – that's more our focus." In terms of aggrega on, he says, the company is working to develop some so ware in-house as well as collabora ng with others. "I don't see the point in reinven ng the wheel to predict vola lity," he declares. To register free for U lity Week Live, visit: h ps://www.u lityweeklive.co.uk/ con nued from previous page P R E S E N T S IN ASSOCIATION WITH 28 | 22ND - 28TH FEBRUARY 2019 | UTILITY WEEK

• Cover