Allens has advised ENGIE in Australia on the negotiation of a virtual storage agreement with AGL.
The agreement is ENGIE's first 100% virtual storage agreement to be entirely de-linked from a physical battery asset, marking a significant milestone in the evolution of energy trading in Australia.
The five-year, derivatives-only agreement is based on hypothetical energy storage capacity, offering a new level of flexibility and sophistication for energy market participants.
'This transaction represents a step-change in how energy storage can be commercialised and traded. It reflects growing appetite among energy traders for innovative financial instruments that support portfolio diversification and risk management,' said lead partner Danielle Jones.
'The agreement enables ENGIE to replicate the operational flexibility of a two-hour battery, giving their customers additional firming capacity without the constraints of a physical asset.
'We congratulate ENGIE and AGL on reaching this landmark agreement. We expect to see increased demand for virtual offtake structures across the market as the sector continues to evolve.'
The agreement builds on Allens' work with ENGIE on other innovative virtual offtake agreements, with the firm having also advised ENGIE on agreements with Neoen Australia and Hazelwood BESS. Allens has also recently advised on a number of other first-to-market energy storage transactions, including Akaysha Energy's Orana Battery Energy Storage System and ZEN Energy's battery and solar investment platform.
