vgrinshpun said:
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For example, if it TE signs agreement with a large utility, say Oncor of Texas for supply of 10GWh of BES througout the 2017 with upfront payment in return to heavily discounted price, say $350/kWh instead of the list price of $445/kWh, it can bring $3.5B in cash upfront, with $1.1B of this payment being gross profit, ensuring, as I speculated earlier profitability in 2017.
The upfront payment/most probable scenario is unlikely to come from Oncor! Oncor's majority owner (80%), Energy Future Holdings, has filed for bankruptcy protection.
How is Oncor Protected?
The "ring fence" was as much about regulatory separation as it was about creditor protection. Texas/ERCOT has a bifurcated structure: Generation (in most of the state) is competitive and largely unregulated (other than ERCOT's role). Transmission and Distribution (T&D) utilities are regulated by the Texas PUC, because of the old regulated monopoly concept that economic monopolies are entitled to a return of and a return on their investments. Figuring out what is "fair" for the return of and on is a ponderous, expensive, time-consuming process.
The process is complicated by the reality that in a bifurcated market, stationary storage is a hybrid--neither fish (unregulated generation) nor fowl (regulated T&D).
The consequence of the bankruptcy coupled with the regulatory conundrum means Oncor is unlikely to buy 10 Gwh of battery storage anytime soon.
(The old-timers at EFH/Oncor from the time when TXU was an integrated, regulated utility still have scabs over wounds from "prudency" hearings about Comanche Peak.)