More than 1.4 gigawatts of four-hour storage, to be developed and built before 2028, with the capacity already secured by capacity market contracts.
That is Greenvolt Power's Polish portfolio, and Antonio Montoto Rojo is unfussy about why it grew there first. Local conditions, in particular the capacity market, and an economy in a range able to absorb the technology.
Hungary came next, with a standalone storage project awarded in the last auction to support the day-ahead and frequency markets. There are projects in the UK, and a pipeline in Italy, Germany and Spain for the years after that. Greenvolt itself is Portuguese, with offices across Europe and in the United States, Japan and Indonesia, and a biomass business it leads in Portugal.
The three-year warranty is the number that changed
Procurement, in his account, has to be a long-term strategy sitting on top of a market that will not sit still. His words for the price movement, and for the specification changes that come with it, are "a roller coaster dynamic, both in price, but also in the technology features."
The single measure of how far that has moved is warranty length. Ten years ago a utility-scale storage system usually came with three years of warranty, and extensions were not easy to get. Now, he says, everybody in the sector knows that more than twenty years is achievable on certain profiles.
So the work is holding the most accurate capex picture available, for now and for next year, and understanding how the features a supplier offers land in real opex. Technological, economic and market knowledge together are what decide which countries Greenvolt goes into, and how.
Capex is an enabling factor, not the deciding one
He is direct that capex is not the most important variable. It enables, and what it enables depends on the market.
In a high-profitability market the priority is to secure the project fast, with competitive capex but above all with the most reliable path to completion, so revenue starts early. In other markets nothing can move until the investment cost is very well defined.
One rule holds across both. Greenvolt only works with companies considered top tier by the main indexes. If a supplier sits outside that, the numbers may look fine and the perspective is still not realistic.
The contracting shape follows the size of the job. For small projects, which he puts at around 20 megawatts or less, a full supply package from one EPC or equivalent is easier. For a large portfolio that is already well scheduled over the coming years, a master supply agreement with a reliable supplier covering the key elements is better, because the volume can be turned into better commercial conditions and better treatment from suppliers.
Opex has to be defined before it can be managed
Capex components are easy to separate. Opex is not, and Montoto Rojo says a developer has to set its own criteria for what counts: annual management costs, taxes, energy asset managers, the local structure costs that vary in every country, and then the fixed and secured cost of maintaining the facility. That first group demands real knowledge of a market's tax and cost structure.
Behind that sits a change in how long these assets are meant to last. Projects used to be conceived as one-offs running ten to fifteen years, with new ones after. They are now being planned to be managed for more than twenty, which means the land option and the extension of the connection authorisation have to reach that far as well. He describes it as a transition towards the way solar and wind projects are treated.
Degradation then follows the revenue scheme rather than the datasheet. A two-hour frequency market with one cycle a day produces a different asset from a more profitable energy market with two cycles. There is no magical formula, in his phrase; the formula is linking the revenue and market scheme tightly to the operational one, and letting that set the capex and the expected life.
Regulation, not technology, separates the markets
Asked what differs between countries, he goes to grid integration policy rather than hardware.
The UK is highly differentiated from the rest of Europe: clear, transparent, easy to develop in, with greater freedom in how a plant is managed. Ireland mixes UK criteria with European Union criteria. Other markets he calls more traditional and more monolithic, where the regulation may limit what storage can actually do. What a developer faces is a set of fixed costs that occasionally change and a set of fixed limits on connection capability, sometimes including a ratio between the energy that can be installed and the power. In some places parallel projects and oversizing are allowed, in others not.
Poland improved its cable pooling law over the past year, which he singles out. Cable pooling is a national law regulating hybridisation: a site can oversize its capacity provided a control system keeps the exported power within the real capacity of the connection point. Spain and Italy can achieve the same result, but without a national regulation it is more technical and harder to do. He expects markets to converge on this, because it saves transmission operators a great deal of investment, and expects a much clearer picture within five to ten years, with the expertise to manage markets in groups rather than one at a time.
Hungary shows how far contract terms reach into engineering. There is a minimum obligation of ten years operating within a defined profile of conditions, plus end-of-life and offline configuration requirements he considers very new in Europe. The capacity market obliges a battery to follow the same criteria as a traditional gas or coal plant, with an end-of-life performance requirement held to a tight deviation. If that is not designed in from the start, the effect on capex, and on opex once augmentation is counted as part of it, can be an unpleasant surprise when the offer is priced.
Two businesses, on different clocks
On revenue he separates early money from long money.
Early players make their returns in secondary markets and ancillary services. Those markets have a maximum capacity to cover, and in most cases they are limited by what the government has budgeted, so the business there ends up concentrated in very specific projects. The long-term business is energy, and it is conservative: fixed, low profile revenue.
His view of what the early results did is the sharper claim. The early cases in the United States and the UK distorted how some investors read the profitability of batteries, and that golden age was only a two or three year period. What follows has to be modelled with more conservative profitability and heavier degradation, because ancillary markets demand more use of the battery per unit of revenue received.
What he expects to grow instead is co-location, supplement and hybrid schemes, helped by falling capex and by better adjustment of storage to the rest of the generation fleet. That matters most where generation and consumption are unbalanced across the hours of the day, as in Spain, or across geography, as in the UK and Italy.
And it matters for what comes after lithium, which is around 90% of battery technology deployed today. Northern Europe will have one or two months with neither enough wind nor enough sun, and seasonal storage will be impossible to avoid there unless the answer stays gas, or coal in Poland's case.
This piece draws on the full conversation, which is available with a complete transcript on the episode page.