A Long Duration Storage Long Term Energy Service Agreement (LDS LTESA) is a financial derivative contract that provides an LTES Operator with a series of options to access a variable annuity payment. If the option is exercised, the annuity payment will be in the form of a top up to net operational revenues achieved by the Project. The award of an LDS LTESA is conditional upon entry into and compliance with two primary contractual Project Documents:
- Project Development Agreement (PDA) – includes obligations on the LTES Operator to achieve Financial Close, construct and commission the Project, and comply with various social licence commitments.
- LTESA – includes the specific terms of the derivative arrangements and ongoing operational obligations on the LTES Operator.
For LDS LTESAs awarded, the SFV will be the counterparty to the relevant Project Documents.