Louise Dalton, a partner in the Energy & Infrastructure team at CMS and a leading legal expert in battery storage, discusses the evolving landscape of revenue models for battery energy storage systems. She delves into the intricacies of tolling agreements and how they help manage risk in fluctuating markets. The conversation also highlights the importance of adaptable contracts amid changing regulations and market conditions. Furthermore, Louise emphasizes the need for revenue certainty to navigate today's complex energy industry.
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insights INSIGHT
Tolls Enable Greater Debt Leverage
Tolls allow higher leverage (70%+) in debt financing due to contracted revenue certainty.
Merchant projects usually have lower leverage (~40-50%) because of higher revenue risk.
volunteer_activism ADVICE
Allocate Time and Resources for Tolls
Expect toll negotiations to take 5-6 months due to complexity and novelty.
Evaluate internal resource needs and legal costs when deciding between floors and tolls.
volunteer_activism ADVICE
Manage External Risk in Contracts
Clearly define availability and risk sharing for incidents beyond asset owner control.
Allocate system and network risks fairly to maintain revenue certainty and operational fairness.
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As battery storage continues to scale, the commercial and legal frameworks behind each project are becoming more sophisticated and more critical to long-term success. From merchant risk and revenue sharing to tolling agreements and long-term partnerships, the legal foundations of battery projects are becoming just as important as the technical ones. What are tolling models and how are they being used to share risk? How are contracts adapting to new market realities, and what should developers and investors look for when structuring battery deals in volatile or policy-driven markets? In this episode of Transmission, we’re joined by Louise Dalton, a partner in the Energy & Infrastructure team at CMS, and one of the UK’s leading legal experts on battery storage.
In this episode, we cover:
Tolling agreements in battery storage: What they are, how they’re used, and why they’re gaining traction across merchant-heavy markets.
Managing risk through contracts: How legal structures are being used to distribute volatility between developers, operators, and offtakers.
Market change and contract flexibility: How deals are being designed to respond to evolving market conditions without breaking down.
Revenue certainty vs. upside potential: Balancing risk and return in a maturing but still fast-moving storage landscape.
The evolution of the legal landscape: How storage contracts have changed over the past decade and what’s still missing from many standard structures.
About our guest:
Louise Dalton is a partner at CMS, an international law firm, where she specialises in energy and infrastructure transactions. She has worked on some of the UK’s most high-profile battery storage deals and plays an active role in industry development through initiatives like WiNES (Women in New Energy Storage). For more information on CMS, head to their website.
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