Fluence has signed an agreement with DRI, a subsidiary of Ukrainian energy investment group DTEK, to supply a large-scale battery energy storage system for a project in Poland. The Virginia-based battery energy storage system integrator and technology provider announced the deal this morning.

Project Details and Technology

The agreement covers DRI's 133MW Trzebinia BESS project located in Chrzanów, southern Poland, approximately 330 km southwest of Warsaw. Fluence will provide its newest BESS solution, SmartStack, which was launched in February at the Energy Storage Summit EU conference. SmartStack is an AC block that integrates power conversion system and thermal management into one unit, positioned underneath the battery modules.

The design enables up to 7.5 MWh storage capacity per unit using 300Ah cells, in a form factor that is slightly longer and considerably taller than standard 20-ft ISO shipping containers used by most BESS enclosures on the market. The system's Battery Pod battery modules and Smart Skid AC skid are transported separately and plugged in on-site. Fluence recently began mass production of SmartStack for delivery to non-US markets at a factory in Vietnam, which the company is ramping to 35GWh annual production capacity.

A Fluence spokesperson confirmed that the Trzebinia project is now being designed for 622 MWh battery capacity.

Capacity Market Contract and Competitive Context

DRI secured a capacity market contract in December 2022 for 125MW of the Trzebinia project's power, making it the largest among four BESS projects from successful bidders in a reverse auction. The auction had a clearing price of PLN 406.35/kW, equivalent to USD 101/kW at that time's exchange rate. The other successful developers in the auction were Hynfra, OX2, and Energa Wytwarzanie.

The Trzebinia BESS's capacity market delivery obligation starts in 2027, along with the other projects. DRI's win comprised most of the 165MW awarded to battery projects, while other resources, such as gas, were awarded 5,379MW of contracts. The project was originally developed by Columbus Energy, which agreed to sell it to DRI in Spring 2024. At that time, the project's planned capacity was 532 MWh.

Market Development and Revenue Opportunities

The following capacity market auction, held in 2023, attracted 16GW worth of pre-registered BESS project bids. This resulted in 1.7GW of contract awards to batteries out of a 7GW total when results were announced in December. The 2023 auction achieved a lower clearing price than its predecessor at PLN 244.90/kW, for capacity market obligations commencing in 2028 with contract lengths ranging from one to 17 years.

While other revenue-generating opportunities, such as frequency regulation, ancillary services, and wholesale market arbitrage energy trading, are available and likely to be more profitable, the capacity market's long-term contracts are considered vital for supporting the business case for batteries in Poland. Poland's growth of BESS revenue opportunities across the merchant value stack and the bankability of capacity market contracts mean the market has started to see its first waves of third-party asset optimization deals between project owners and route-to-market providers.

DTEK's Broader Energy Storage Activities

DTEK describes itself as the largest private investor in Ukraine's energy sector, with DRI serving as the group's arm for investing in renewable and clean energy projects in European Union territories. The Polish project announcement comes weeks after DTEK and Fluence announced the start of commercial operation at a 200MW/400 MWh, six-project BESS portfolio in Ukraine.

These projects range from 20MW to 50MW each, and DTEK has signed ancillary services contracts for all six with Ukraine's transmission system operator Ukrenergo, representing an investment of around EU125 million. The Ukrainian projects form part of a total 500MW BESS buildout that DTEK is targeting in Ukraine. DTEK CEO Maksym Timchenko described the switching on of these projects as a “historic step” for the country's energy system.

DTEK was behind Ukraine's first-ever megawatt-scale BESS project, which went online in 2022, just weeks before the Russian invasion began. In an October 2024 interview, DTEK energy storage lead Vadim Utkin expressed his impression of the resilience of Ukraine's energy network despite ongoing assaults from Russia. Ukraine's national energy minister Svitlana Grinchuk stated that “in the context of large-scale attacks on Ukraine's energy system, the role of energy storage systems has become just as fundamental as energy generation itself.”

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