Dais Energy ‘getting in market early’ with 250MW Denmark partnership

Denmark is aiming for 100% renewable energy by 2050 but has been relatively quiet for large-scale energy storage project news to-date, with 10MWh and 12MWh BESS projects launched this year by Nordic Solar and Better Energy respectively, as well as thermal energy storage pilot projects from Hyme Energy and Kyoto Group.

We asked Connor therefore why Dais had chosen Denmark as a first market of entry and how it would approach commercialising the projects, which will be spread across the country’s two electricity zones – DK1, an EU market, and DK2, a Nordic one.

“Denmark has strong underlying merchant revenues. There is talk of capacity market (CM) and a few other things but we’d rather get in early, you can always take advantage of those later. The important thing is to get in before many others do, to pick up key grid nodes and build projects in the right places,” Connor said.

But the lack of something like a CM, with its fixed revenues and the benefits that brings to financing projects, is a challenge the company has to get around, as Connor explained.

“Without something like the CM you need to find the right counterparty by talking at the right scale. And then you can either take structures that give revenue security on day-ahead markets which are available, and compare the cost of that to going fully merchant with the financiers who are prepared to back that. The latter is not the norm, I suppose, some of those are strategics.”

“We’ll use third-party traders for commercialising. If we go for the contracted structures that would be announced pretty soon before final investment decision (FID) obviously. If it was merchant we’d wait until we are already well into construction, as that’s where you’ll get the best terms.”

Dais is in discussions with three suppliers with the aim to have two supplying the Denmark pipeline, with one accounting for the majority.

The firm is targeting Germany, Poland and Romania after the Denmark entry (hence his attendance at last week’s event). A lot of the discussions around Poland and CEE are about fine-tuning the business case, with next to none of its expected huge pipeline of grid-scale projects actually under construction yet.

“Everyone knows energy storage will work. You can spend a lot of time arguing about how exactly it will work in every single market but you can still get on with developing while you work that out,” Connor said.

Connor was formerly head of storage EMEA for oil and gas major BP’s clean energy arm Lightsource BP (covered extensively by our sister site Solar Power Portal). Before that, he was head of optimisation and storage sales for the large UK utility Centrica.