Who should own the battery? Exelon wants it in rates, Gresham House puts a fleet up for sale
Victoria Shinder2 min readOn 30 October Exelon told investors its utilities could spend $3 billion to $7 billion building 1.5 GW to 3.5 GW of regulated energy storage, on top of a 500 MW project already proposed in New Jersey. Days later the board of Gresham House Energy Storage Fund, one of the largest battery owners in Great Britain, launched a formal process to sell the whole company after shareholders pressed for value to be delivered faster.
The two moves rest on different answers to the same question. Exelon's chief financial officer argued that regulated ownership gives certainty that a project gets built and control over when and how it runs, and that customers benefit through lower capacity prices and passed-through tax credits. The case is made in PJM, where Exelon's chief executive says new generation is not arriving fast enough. Gresham House's fund is the opposite model: merchant batteries owned by listed investors who take market revenues and market risk, and whose board now says some of those investors would rather sell than wait.
Neither announcement settles the question. Exelon's plan needs state regulators in New Jersey, Maryland and Delaware to put each project into rates, and competitive developers will argue that regulated ownership crowds them out. Gresham House's process may not end in a sale, and the board says it will keep running its growth plan meanwhile.
What it means
The useful comparison is what each model asks of the customer. Regulated storage moves the risk of a battery underperforming onto bill payers, in exchange for a guarantee it gets built; merchant storage leaves that risk with investors, who in Great Britain have now shown how much patience they have left. Where a grid is short of capacity, regulators will increasingly be asked to choose between the two, and the price a buyer offers for the Gresham House fleet will be one of the few hard numbers available when they do.