Vattenfall, Terralayr sign “industry-first” virtual battery tolling agreement

Vattenfall and Terralayr have signed what they describe as the energy industry’s first virtual battery tolling structure, covering 55 MW / 110 MWh of capacity across multiple decentralized storage assets.

The seven-year agreement allows Vattenfall to access capacity from a fleet of battery storage systems that are aggregated and dispatched through Terralayr’s software platform. This marks a departure from traditional tolling agreements, which typically involve a single large asset.

Unlike conventional models, this arrangement enables smaller battery storage systems to be included in large-volume agreements. The deal encompasses capacity from eight Terralayr storage facilities distributed throughout Germany, drawing from a portfolio exceeding 100 MW.

Terralayr, founded in 2022 in Germany, is a fully integrated energy flexibility provider, aggregating its own and third-party battery storage assets through a cloud-like aggregation.

The decentralized battery network integrates with automated trading processes, cutting portfolio imbalance costs while providing flexibility when required.

Under the arrangement, Terralayr maintains responsibility for the development, construction, financing, and operation of the physical storage systems. The batteries are then bundled via the company’s proprietary cloud-based software platform, with Vattenfall managing part of the capacity from Hamburg through a long-term purchase agreement.

The structure avoids upfront capital expenditure for Vattenfall while providing what the companies claim is higher reliability than a single large-scale physical battery. For storage investors and operators, the bundling approach creates stable revenue streams, potentially enhancing the financial viability of storage projects across Germany.

Operations utilizing the multi-asset capacity are scheduled to commence by the end of 2025. Both companies suggest the partnership will enable more efficient integration of renewable energy by balancing fluctuations in wind and solar power generation, thereby reducing costly grid management measures.