Who Controls the Battery—and Who Gets Paid?
Multi-use energy storage projects promise higher returns by stacking revenues: peak shaving, frequency regulation, backup power, energy arbitrage, and industrial load optimization.
But most multi-use storage projects fail to deliver expected value—not because markets disappear, but because dispatch rights and revenue allocation are poorly defined.
This article explains why dispatch control is the real asset, how revenue conflicts arise, and how successful projects structure control and cash flows without destroying long-term value.
1. Why Dispatch Rights Matter More Than Capacity
In a multi-use project, storage capacity is fixed—but its value is not.
Every dispatch decision:
- Prioritizes one revenue stream over another
- Consumes cycle life
- Affects availability for backup or resilience
The party that controls dispatch effectively controls the project’s economics.
Without clear rules, multi-use becomes multi-conflict.
2. Common Dispatch Conflicts in Multi-Use Projects
Typical conflicts include:
- Arbitrage vs. backup readiness
- Grid services vs. industrial peak shaving
- Short-term revenue vs. degradation control
- Operator optimization vs. investor protection
If dispatch priority is not contractually defined, it will be decided in real time—usually in the wrong way.
3. Why “Shared Control” Rarely Works
Many contracts attempt “joint dispatch control”:
- Owner approval
- Operator recommendations
- EPC constraints
In practice, this leads to:
- Delayed decisions
- Blame shifting
- Missed opportunities
Successful projects assign clear primary control, with defined constraints and override rights.
4. Dispatch Control Models That Actually Work
4.1 Owner-Controlled Dispatch
Best when:
- Storage supports internal loads
- Revenue stacking is limited
- Investor is also the operator
Risk: under-optimized market participation.
4.2 Operator/Aggregator-Controlled Dispatch
Best when:
- Market participation dominates
- Revenue stacking is complex
- Fast response is required
Critical requirement: strict contractual limits on cycling and availability.
4.3 Rule-Based Dispatch Frameworks
Increasingly common:
- Pre-defined priority ladders
- SOC bands for different use cases
- Automated fallback logic
This balances flexibility with predictability.
5. Revenue Allocation: The Silent Failure Point
Revenue stacking only works if:
- Each revenue stream is measurable
- Allocation rules are transparent
- Costs are assigned correctly
Common failures:
- Gross vs. net revenue confusion
- Shared degradation costs
- Unallocated standby losses
If revenue cannot be cleanly allocated, it should not be stacked.
6. Practical Revenue Allocation Structures
Effective contracts often use:
- Base revenue (guaranteed or prioritized)
- Upside revenue (shared)
- Speculative revenue (operator-biased)
This protects investors while still incentivizing optimization.
7. Degradation and Cost Allocation
Every dispatch decision consumes value.
Good contracts:
- Assign degradation cost explicitly
- Use cycle budgets
- Penalize excessive cycling
- Allow rebalancing of priorities over time
Degradation is not a technical issue—it is a financial one.
8. Dispatch Constraints EPCs Must Enforce
EPC and system integrators should:
- Encode dispatch limits in EMS
- Define hard safety boundaries
- Prevent contract-violating behavior technically
If it matters contractually, it should be enforced technically.
9. Monitoring, Reporting, and Audit Rights
Multi-use projects require:
- High-resolution data
- Transparent reporting
- Independent audit rights
Without data transparency, disputes are guaranteed.
10. Why Investors Care More About Control Than Returns
Investors accept:
- Lower upside
- Longer payback
They do not accept:
- Uncontrolled risk
- Hidden degradation
- Dispatch decisions they cannot influence
Clear dispatch rights make projects financeable.
Dispatch Rights Are the Real Currency
In multi-use storage projects:
- Capacity is physical
- Revenue is theoretical
- Dispatch control is real
Projects succeed when dispatch rights, revenue allocation, and risk exposure are explicitly aligned.
Without that alignment, multi-use storage becomes a liability—not an asset.
