Statera Energy, the UK-based energy storage developer and operator, has secured up to £300 million of debt financing through a syndicate led by Lloyds Bank.
The first £144 million phase of the financing will be used to deliver Statera’s 300MW / 600MWh Thurrock Battery Energy Storage System (BESS). The balance of the financing will fund the development of a 270MW flexible generation plant which secured a capacity market contract early this year.
The BESS project, located near Greater London, is the first stage of Statera’s wider Thurrock development plans to enter construction. Statera has already secured consent for a total of 900MW of energy storage and flexible generation assets at the site, classified by the UK Government as a ‘Nationally Significant Infrastructure Project’. The 300MW BESS project will be one of the largest in the UK and Europe once commissioned, Statera said.
Lloyds Bank acted as the sole structuring bank for the debt financing facilities and mandated lead arranger and hedge provider in a multi-bank transaction, which included NatWest, Santander, and Siemens Financial Services through Siemens Bank.
Statkraft, a provider of market access and optimisation services, provided a long-term revenue floor that supported the financing of the deal.
Statera’s CEO and founder Tom Vernon said: “Lloyds’ commitment to Statera, through one of the largest battery storage debt financing deals in the UK to date, is testament to the quality of our projects. Our Thurrock BESS project is strategically located near to Greater London providing further energy system resilience to this key demand centre. System flexibility in the form of energy storage technologies is a crucial part of achieving energy security, decarbonising our power system, and enabling the UK’s transition towards net zero. We are delighted to have worked with Lloyds, the syndicate of lenders, and Statkraft in achieving this significant milestone.”
James Taylor, managing director, head of infrastructure and project finance at Lloyds Bank, said: “By storing excess energy, Statera’s technology ensures the UK’s increasingly renewables-led power system can deliver all day and all year round, promoting security and stability, reducing carbon emissions and, ultimately, helping to lower people’s energy bills. The financing we’ve arranged will provide a platform for Statera to continue to develop its portfolio of assets across the UK. We’re excited to see what the team achieves next and to support more businesses and infrastructure projects leading the UK’s renewable energy transition.”
The World Bank has predicted that conflict in the Middle East could lead to a dramatic spike in oil prices, which is linked to increases in food prices - however it's argued that the forecasts do not take into account the ability of energy storage to meet demand
World Bank says Middle East conflict could see oil prices hit $157 per barrel
But forecast is ‘underestimating ability of energy storage’ to satisfy demand
Oil prices impact on food prices – more energy storage would ensure more food security
The recent reignition of conflict in the Middle East led to warnings from the World Bank that any potential escalation could push global commodity markets into “uncharted waters”. The international financial institution has predicted the outlook for commodity prices would “darken quickly” if the conflict were to escalate. And the effects on commodity prices would depend on the degree of disruption to oil supplies, the World Bank said.
Specifically, the World Bank outlined three potential scenarios dependent on the extent of oil supply disruption. In a “small disruption” scenario, the global oil supply would be reduced by 500,000 to 2 million barrels per day (to provide some context, global oil production in 2022 amounted to 94 million barrels per day) – roughly equivalent to the reduction seen during the Libyan civil war in 2011. Under this scenario, the oil price would initially increase between 3 per cent and 13 per cent – relative to the average for Q4 2023 – to a range of $93 to $102 a barrel.
However, in a “medium disruption” scenario – roughly equivalent to the Iraq war in 2003 – the global oil supply would be curtailed by 3 million to 5 million barrels per day. This scenario would lead to oil prices increasing by 21% to 35% initially, which would push them into the range of between $109 and $121 a barrel. But in a “large disruption” scenario – which would be comparable to the Arab oil embargo in 1973 – the global oil supply would shrink by 6 million to 8 million barrels per day. That would drive prices up by 56% to 75% initially – to between $140 and $157 a barrel.
Source: World Bank
Why oil prices impact on food prices
The fact that the resurgence in major conflict in the Middle East comes at the same time as the war in Ukraine further increases concerns. As the World Bank has highlighted, Russia’s invasion of Ukraine resulted in the “biggest shock to commodity markets since the 1970s”. Consequently, the World Bank has warned that an escalation of the conflict in the Middle East would mean the global economy would face a dual energy shock for the first time in decades.
Chief among the concerns is an increase in food prices. A sustained rise in oil prices is inextricably linked to growth in food prices. As Ayhan Kose, the World Bank’s deputy chief economist and director of the prospects group, puts it: “Higher oil prices, if sustained, inevitably mean higher food prices. If a severe oil-price shock materialises, it would push up food price inflation that has already been elevated in many developing countries”. According to the World Bank, at the end of 2022, more than 700 million people – nearly one-tenth of the global population – were undernourished. “An escalation of the latest conflict would intensify food insecurity, not only within the region but also across the world,” Kose adds.
Why gold price indicates levels of investor confidence
Gold prices are instructive when it comes to assessing global investor confidence. This is because the price of gold is deeply intertwined with geopolitical concerns – that is, the price will rise in periods of conflict and uncertainty, signalling an erosion in investor confidence. Since the outbreak of the latest widespread violence in the Middle East in the first week of October, Gold prices have risen by around 10 per cent (see chart below).
Given the risk to food security, the World Bank’s advice is that governments should avoid trade restrictions such as export bans on food and fertilizer as such measures intensify price volatility and heighten food insecurity. Instead, a shrewder move on the part of governments would be to “improve social safety nets, diversify food sources, and increase efficiency in food production and trade”, the World Bank says.
Recent gold prices with the price on the day prior to the outbreak of the latest conflict between Hamas and Israel on 7 October highlighted (Source: gold.co.uk)
World Bank ‘not considering impact of energy storage’
However, crucially, the World Bank has also said that, in the longer-term, countries can increase their energy security by accelerating the transition to renewable energy sources. This is a key point. Indeed, there is a belief in the energy storage sector, for example, that the World Bank has unwittingly exaggerated its forecast of the possible price shock caused by the Middle East conflict because it has failed to properly account for the potential for renewables and energy storage to satisfy energy requirements.
In a letter distributed to shareholders earlier this month, Avi Brenmiller, CEO of Tel-Aviv stock exchange-listed thermal energy storage company Brenmiller Energy, said: “Amidst current geopolitical tensions, the World Bank's latest forecasts on oil prices make it abundantly clear that the time for renewable energy is now — and thermal energy storage is at the forefront of this new era.” He added: “We, at Brenmiller, believe they are overestimating the potential price shock by underestimating the enormous ability of renewables and energy storage to meet new demands.”
Energy storage becomes more cost-competitive when oil prices rise
Brenmiller said increasing oil prices result in energy storage becoming more cost-competitive. He also drew parallels with the oil crisis of the 1970s, which, Brenmiller said, “catalysed a global quest for energy security, marking the beginning of a major shift toward alternative energy sources.” The 1970s saw the last major global energy crises – driven initially by the members of the Organization of the Petroleum Exporting Countries (OPEC) introducing an oil embargo on a number of industrialised countries in 1973 and then by the Iranian revolution in 1978. Crude oil prices increased four-fold in 1974, then fell back somewhat before almost tripling again in 1979, triggering the early 1980s recession. In the UK for example, over the decade, CPI [consumer price index] inflation and the unemployment rate peaked at 25 per cent and 5.7 per cent, respectively, and the economy fell into recession (with the combination of high inflation and recession leading to the term ‘stagflation’ being coined). The chart below
With concern about global price shocks growing, it is vital that governments around the world – in addition to avoiding food export bans and improving social safety nets – take more steps to facilitate the wider deployment of energy storage. By doing so, they will substantially reduce the impact of increases in oil prices and the associated rise in the price of food, which, as studies have shown, can have devastating impacts, such as increases in political violence and social disorder.
The Finnish Government has launched the tender process for two offshore wind projects totalling 3GW off the west coast of Finland.
Finnish state-owned enterprise Metsähallitus is planning to award support in late 2024 for the Edith project off the coast of Närpiö and the Ebba project off the coast of Raahe. The pair are set to be worth a combined €6bn-€8bn.
The French Government has picked sites for floating offshore wind complexes totalling 1.5GW in the Mediterranean Sea.
The Ministry of Ecological Transition has selected the exact locations for two 250MW projects off the coast of Narbonne and the Gulf of Fos, each of which has potential to extend by 500MW. The government plans to commission each of the initial 250MW projects in 2031.
Ørsted, Hynamics Germany and Raffinerie Heide have scrapped plans to build a green hydrogen production plant at Heide oil refinery in Germany.
The companies came together to develop the 30MW facility in 2021 in their H2 Westend joint venture, but have now ended the project due to the high construction costs.
US offshore wind is beset by economic challenges, but this shouldn’t blind the sector to the potential for incorporating green hydrogen production into project plans
Gulf of Mexico and Texas are areas with ‘significant potential’ for offshore wind & green hydrogen projects
Securing project finance for offshore wind combined with green hydrogen is ‘entirely feasible’
UK and Europe ‘hydrogen backbone’ plans could be replicated in US
The US offshore wind sector is wrestling with a number of significant economic challenges at present, which include supply chain issues and interest rate rises, which are having a negative impact on the profitability of projects. With such dark clouds on the horizon, it would be unsurprising if offshore wind developers were reluctant to prioritise incorporating green hydrogen production into offshore wind projects at present. That said, despite such uncertainty, there is a belief that significant potential exists in the US for the development of offshore wind projects that do make provision for this type of technology.
As the latest issue of Tamarindo Finance Quarterly highlights, the Gulf of Mexico, and Texas in particular, are seen as areas where there is significant potential for the development of offshore wind projects that include green hydrogen production. This is due to the fact these areas have extensive oil and gas infrastructure that can be re-purposed for green hydrogen-related uses as well the associated production of methanol, ammonia and sustainable aviation fuel.
Europe takes the lead
In formulating strategies for the inclusion of green hydrogen production in US offshore wind projects, it is instructive for US developers to look at developments in Europe. Source Galileo, which specialises in the development of offshore wind projects in the UK, Ireland and Norway, has incorporated proposals for green hydrogen production in a number of its planned projects. “We believe the future of offshore wind is in green hydrogen – for example a large amount of our energy is currently supplied by natural gas, and green hydrogen could be used as a replacement for this provided that it can be produced at scale,” says Stirling Habbitts, director business development, MD hydrogen at Source Galileo. “If we look at northern Europe, to produce large amounts of green hydrogen at scale – which are not imported and are locally produced – the obvious answer is to go for offshore wind.”
Stirling Habbitts (Source Galileo)
Grid restrictions
Habbitts explains that restrictions associated with electricity grids mean that it can be beneficial to include green hydrogen production in plans for offshore wind projects. “The electricity grids were not designed originally to accommodate large amounts of renewable energy in a dispersed generation model, so there are significant constraints nowadays with connecting further renewable projects to the grid and this applies to battery projects as well,” he says. “Around parts of the coast of Scotland or the west coast of Ireland or off parts of the coast of Norway, for example, you don’t necessarily have a very developed electricity network or grid, so relying on the grid in those areas to be able to accept the electricity from large new offshore farms can be a challenge.”
In this regard, incorporating green hydrogen production into offshore wind projects is a game-changer, according to Habbitts. “If you can produce hydrogen, you can use it potentially to produce derivatives or you can put the hydrogen into dedicated hydrogen pipelines and you can transport it over long distances,” he explains. “When you go the hydrogen route, you basically bypass the electricity grid and you don’t have the constraints associated with grids.”
Only 'minority' of offshore wind developers considering green hydrogen
A number of offshore wind developers are exploring the potential for incorporating green hydrogen production into projects, but at the moment they are in a minority, says Habbitts. He adds that one of the reasons is that financing an offshore wind project incorporating hydrogen can currently be more challenging as such projects are still relatively new, though he says there are precedents that provide encouragement. One is the announcement earlier this year that NEOM Green Hydrogen Company had concluded a $8.4 billion financing for what it described as the “world’s largest green hydrogen production facility”, which is being built at Oxagon, in Saudi Arabia’s NEOM region. “There is precedent for project finance for green hydrogen projects, and there is precedent for project finance for offshore wind farms, so it should be entirely possible and feasible to obtain project finance for an offshore wind farm that produces green hydrogen,” Habbitts says.
Habbitts acknowledges that green hydrogen is a relatively new sector, but he stresses that there are projects in Europe and the Middle East that produce green hydrogen via electrolysis that are up and running having secured project finance from banks. He cites the example of Siemens, which last year commissioned one of Germany’s largest green hydrogen generation plants – with an electrical capacity of 8.75MW at Wunsiedel Energy Park. Elsewhere, In April last year, it was announced that the European Investment Bank (EIB) and the Official Credit Institute (ICO) would provide Spanish energy company Iberdrola with a combined total of €88 million for the development of a 100MW photovoltaic plant, a 20MWh battery and a 20MW green hydrogen production plant in Puertollano (Ciudad Real), Castilla-La Mancha.
Saudi Arabia's NEOM region will be home to a $8.4 billion green hydrogen project (Image source: neom.com)
UK’s ‘Project Union’: The lowdown
Habbitts points out that, across Europe, there are now a number of initiatives aimed at building green hydrogen pipeline networks that take into account the production of green hydrogen by offshore wind farms. “We already have extensive gas networks that are owned by large gas operators,” he says. “We know fossil fuel gas will be a reduced part of the future energy mix because of the greenhouse gas emissions it causes, however the infrastructure and the expertise of the gas network sector can be redirected to a hydrogen network.” One such initiative in the UK is Project Union, a National Grid Gas Transmission initiative aimed at delivering a “first of a kind hydrogen transmission backbone” for the UK. Through the phased repurposing of existing assets alongside new ones, the National Grid says a hydrogen backbone of around 2,000km will be created, representing around 25% of the UK’s current natural gas transmission pipelines. “This approach of primarily repurposing assets is up to five times more cost effective compared to new build,” the Project Union launch report stated.
Habbitts highlights that Project Union’s plan has taken offshore wind into account. “Offshore wind farms are considered in the plan,” he says. “Project Union identifies large industrial clusters where there could be large users of hydrogen, and connects those hydrogen hubs so that hydrogen from offshore wind, for example, in Scotland or in the Celtic Sea, can be moved relatively quickly across the country to where it’s needed,” Habbitts says. “With a network like this, so much more becomes possible because you can then sign offtake contracts from your wind farm producing hydrogen – for example, in the Celtic Sea – with maybe an industrial party on the other side of the country.”
Could US replicate Europe’s ‘hydrogen backbone’?
In a similar vein to the UK’s Project Union, Europe has come up with the European Hydrogen Backbone (EHB) initiative, which aims to “accelerate Europe’s decarbonisation journey by defining the critical role of hydrogen infrastructure – based on existing and new pipelines – in enabling the development of a competitive, liquid, pan-European renewable and low-carbon hydrogen market”. This initiative makes reference to “significant green hydrogen supply potential based on onshore and offshore wind”, which it sees as driving the development of additional supply corridors that can connect Nordic and Baltic hydrogen supply to the rest of Europe. Habbitts envisages a scenario where the US takes a similar approach. He says: “The US is a few years behind, but I absolutely see the US following suit - I would imagine areas like the Gulf of Mexico, Texas, for example – where there’s already a lot of offshore oil and gas infrastructure – would be ideal for bringing in offshore wind.”
This is an abridged version of an article that appears in the latest issue of Tamarindo Finance Quarterly, to download a copy click here
GE Vernova and Our Next Energy (ONE) have signed a term sheet that will facilitate the provision of ONE’s battery modules containing lithium iron phosphate (LFP) cells for GE Vernova's Solar & Storage Solutions business projects across the US, as well as collaboration “towards advancing battery energy storage solutions in the US using locally manufactured batteries".
With the integration of locally manufactured LFP batteries, GE Vernova and its customers will be able to take advantage of incentives offered by the Inflation Reduction Act (IRA) and investment tax credits (ITC).
Prakash Chandra, CEO of GE Vernova’s Solar & Storage Solutions business, said: “Battery energy storage systems (BESS) are vital for the renewable energy transition and grid stability. GE Vernova has deployed its ‘FlexReservoirTM’ BESS systems globally. Now, in partnership with Our Next Energy, we're bringing American-made batteries to power local communities, bolstering manufacturing and job growth.“
Mujeeb Ijaz, founder and CEO at ONE, said: “Storage is the key to stabilising the grid. In addition, it unlocks 100 per cent renewable energy to power factories, communities, hospitals, and data centres. As demand increases for energy storage systems, we are honoured to play a role in helping GE Vernova and its customers transition the US to more sustainable power sources by providing them with domestically produced batteries and cells.”
Cleantech integrator Ameresco is to construct a 50MW / 200MWh battery energy storage system (BESS) for Silicon Valley Power (SVP).
The BESS, named Kifer Energy Storage LLC, will be installed adjacent to the existing Kifer receiving Sstation within SVP’s service territory.
The Ameresco owned asset, which is scheduled to begin construction in mid-2024, will mark the beginning of a 25-year lease and energy storage agreement with the City of Santa Clara.
Ameresco will develop, own, and operate the BESS, while SVP will supply the charging energy.
Additionally, the batteries at the facility will participate in the California ISO markets, assist in balancing generation and consumption, reducing congestion and regulating voltage and frequency. Ameresco and SVP aim for the BESS to be fully operational by the fourth quarter of 2025.
“We’re thrilled to announce our partnership with Silicon Valley Power to bring this state-of-the-art battery energy storage system to life,” said Britta MacIntosh, Ameresco executive vice president and general manager, west region. “This asset installation really is a game-changer, not just for enhancing SVP's system reliability, but also for advancing and integrating the renewable energy sources of the future.”
Manuel Pineda, chief electric utility officer at Silicon Valley Power, said: “With the installation of this new battery storage system, we are committed to providing reliable and flexible power solutions for our customers embracing renewable energy integration. This project is perfectly aligned with our mission to deliver affordable, sustainable, and environmentally friendly energy options. Together, we hope to help lead the way towards a greener Silicon Valley."
Swedish utility Vattenfall and Finnish forestry firm Metsähallitus have agreed to expand their planned Korsnäs offshore wind farm in Finland by over 50% to 2GW.
The partners linked up on Korsnäs project in December 2022, when it was intended to have headline capacity of 1.3GW. However, the pair are now planning an additional 700MW because a new regional plan in Finland's Ostrobothnia region increases the size of the site by 5,400 hectares, to 27,400 hectares.
German utility Bioconstruct has ordered Nordex turbines for the 40.8MW Bösel-West wind farm in the Lower Saxony region of Germany.
Nordex is set to begin installing the project's six turbines in the third quarter of 2024, with commissioning due in mid-2025. Nordex has also secured a 20-year servicing deal at the project.
BP and Corio Generation are planning to invest around $1.2bn in offshore wind projects in South Korea, the Asian country's government has announced.
South Korea's Ministry of Trade, Industry & Energy said yesterday that the pair are planning to develop offshore wind projects totalling 3GW, including the 1.5GW Gray Whale complex. This builds on a clean energy investment partnership between the UK and South Korea.
Attendees at 'Financing Wind Offshore' in Boston last week were quietly optimistic, even though the Biden administration's target of 30GW installed offshore wind by 2030 now looks out of reach. That positivity will be needed in the year ahead.
The Biden administration wants 30GW of installed offshore wind by 2030
Most attendees at Financing Wind Offshore expected less than 10GW by then
Conservative think tanks are taking aim at the 2.6GW Coastal Virginia project
US offshore wind experts believe the Biden administration’s goal of 30GW installed capacity in the country’s waters by 2030 is out of reach. The question now is how far short the country falls.
That was the verdict of the professionals at our Financing Wind Offshore conference last Thursday (16th November).
We polled attendees at the conference in Boston to find out how optimistic they are about the prospects of a sector that has taken a hammering in the last year, due to inflation, supply chain disruption and vocal opposition. This has caused high-profile problems for developers and led Ørsted to cancel the 2.3GW Ocean Wind 1 & 2 complex on 31st October. Other projects are still in doubt.
Over half of attendees (58%) said they expected less than 10GW of offshore wind to be operational in US waters by 2030, with a further 40% expecting between 10GW and 20GW. Only 2% predicted more than 20GW by 2030 and none over 30GW. This is far short of the federal government's target, but still strikes us as fairly bullish given the commercial challenges of the last 12 months.
Respondents were most positive about the prospects for offshore wind off the coast of New York, where Ørsted has this week installed the first turbine at the 130MW South Fork Wind project. Fifty-nine percent of attendees said they expected New York to have the most offshore wind capacity installed in its waters by 2030, ahead of Massachusetts (27%) and Virginia (8%). This may reflect how fast New York has reacted to market uncertainty: it is due to open a new offshore wind solicitation on 30th November, with bids due in January, so stalled projects can secure off-take deals at higher prices.
Finally, just over half of attendees (51%) expected GE Renewable Energy to be the turbine maker with the largest market share by 2030, ahead of Vestas (29%) and Siemens Gamesa (17%). GE has taken an early lead as turbine supplier for the 800MW Vineyard Wind 1, which is due to be commissioned by mid-2024, but each firm in the ‘big three’ has won headline-grabbing orders. For example, Siemens Gamesa is preferred supplier to the 2.6GW Coastal Virginia project by Dominion Energy, and said its plans would not be affected by its recent cancellation of a planned $200m blade factory in Portsmouth.
There are still reasons to be optimistic about offshore wind in the US – and those in the industry will need all of those positive vibes as more legal challenges surface.
Legal battle looms
Those of us who’ve watched US offshore wind for the last decade will be well aware of the saga of the 468MW project Cape Wind. This scheme was first mooted in 2001 and developer Energy Management Inc. won more than two dozen legal battles. However, Cape Wind was eventually weighed down by this litigation, which caused delays that led to the project defaulting on its power purchase agreements in 2015. It never recovered and was pronounced dead in 2017.
The project is long gone but the lesson of its failure remains highly relevant. Offshore wind developers can win all the legal fights at projects, but still see projects fail if their opponents delay them for long enough. Delays can cause developers to run out of money, contracts, political support, benign economics, or the will to fight.
This is why the threat of legal action by conservative think tanks Heartland Institute and the Committee for a Constructive Tomorrow against Dominion Energy’s 2.6GW Coastal Virginia scheme should put the industry on alert. The pair said they are filing legal action against the Bureau of Ocean Energy Management and National Marine Fisheries Service’s approvals for the projects, which they claimed are in breach of the Endangered Species Act because of the potential harm to North American whales.
This should concern developers and investors because the challenge is about more than one scheme. Rather, the think tanks said it is about “the Biden administration’s plan to industrialize the ocean”, which shows they want to create a legal precedent that would derail other schemes too.
As well as judges and policymakers, the think tanks are looking to influence Dominion shareholders by stressing how the firm’s share price has halved since August 2022 and promising that it would rebound if Coastal Virginia is axed.
This also coincides with the increased use of fake scientific studies and images to discredit offshore wind. In Australia, the editor of a scientific journal has this month warned that anti-wind objectors are using a fictional report, reportedly produced by the University of Tasmania, to discredit the offshore wind sector; while the think tank Texas Public Policy Foundation has reportedly used fake images produced by artificial intelligence too.
We enjoyed hearing from all of the expert speakers at 'Financing Wind Offshore' last week. However, there can also be no doubt that the current woes facing the sector have only empowered the industry's critics ahead of an expected Biden-Trump presidential fight in 2024, which is set to include much discussion about the Biden administration's ‘green’ plans.
The 30GW by 2030 target may be out of reach, but there’s so much for those in the industry to fight for.
Madrid-headquartered Grenergy is to invest €2.6 billion in solar and battery storage projects between now and 2026, the company has confirmed.
Of the total, €1.5 billion will be allocated to the development of its portfolio of photovoltaic projects, with €800 million to be invested in boosting battery storage.
With development teams in eleven countries across its three main regions (Latin America, Europe and the United States), Grenergy has a 15.5GW portfolio in various stages of development and has successfully sold a total of 1.1GW.
The company has three-year installed capacity targets, with 5GW of solar capacity targeted by 2026 and 4.1 GWh of energy storage. The Oasis de Atacama energy storage project in Chile will be key to the company's growth - Grenergy has started construction of the project, in the north of the country, which will be the largest storage project in the world, incorporating 4.1 GWh of storage and 1GW solar. Grenergy will invest a total of $1.4 billion in this initiative, which is divided into five phases. The phases are expected to come on stream over the next 36 months.
"Today, Chile is a superpower in terms of the development of energy storage due to the exceptional conditions of the Atacama Desert in terms of hours of solar radiation and the particularity of the energy mix of this vast area, where the penetration of solar energy reaches 50 per cent", said David Ruiz de Andrés, CEO of Grenergy.
"Oasis de Atacama will be an iconic project for Grenergy and the entire renewable sector,” added Ruiz de Andrés. “We have the backing of five international banks mandated to finance it, the secured sale with a PPA signed with EMOAC, and the know-how and talent needed to get it off the ground.”
Pacific Green subsidiary Sheaf Energy has entered into an agreement with SSE Energy Supply wherein SSE will provide trading and optimisation services for the 249 MW / 373.5 MWh Sheaf Energy Park battery energy storage system that Pacific Green is developing in Kent, England.
Under the terms of the agreement, Pacific Green will be responsible for the construction, operation and maintenance of Sheaf Energy Park, while SSE will provide optimization services for a ten-year period from the start of commercial operations, which is expected in July 2025.
Scott Poulter, Pacific Green’s chief executive, said:“SSE is one of the UK’s most prominent and reliable energy providers, and we are thrilled to have them trading Sheaf Energy Park for the foreseeable future. southeast England is an extremely dynamic part of the country’s electrical grid, so partnering with an experienced operator such as SSE will be a big asset towards Sheaf Energy Park’s success.”
Gordon Bell, managing director of SSE Energy Markets, said: “As one of the UK’s leading electricity generators, we clearly recognise the crucial role batteries will play in providing backup to renewables. Sheaf Energy Park can be a major contributor to our energy future and we look forward to bringing SSE’s leading markets expertise to bear as we provide trading and optimisation services across the next decade.”
The US Department of the Interior has given federal support to BP and Equinor's 2.1GW Empire Wind offshore wind complex in New York waters.
Empire Wind is made up of the 816MW Empire Wind 1 and 1.3GW Empire Wind 2 projects, which are due to be commissioned in 2027 and 2028 respectively. This is the sixth utility-scale offshore wind complex to gain support from the US federal government.
Basis Climate, a digital marketplace for transferable renewable energy tax credits, has closed a $60 million transfer of investment tax credits from California-based independent power producer W Power, LLC and Wellhead Electric Company, for their utility-scale Stanton Battery Energy Storage Project.
Basis Climate co-founder and CEO Erik Underwood, said: "We're honoured to have been able to facilitate this important transaction that supports California's renewable energy transition. In a highly competitive environment, we supported W Power, Wellhead, and the buyer in transacting efficiently while understanding each party’s priorities and needs. Structuring large transactions such as these is simplified through the mechanisms of tax credit transferability, and we are proud to be an early player in this market.”
Wellhead’s president, Hal Dittmer, said: “In a complex deal environment, the Basis team provided excellent client service and transaction support that allowed us to finalise this $60 million tax credit transfer soon after the project was placed in service. We look forward to working with Basis again as we continue developing innovative storage projects."
Basis provides matchmaking between buyers and sellers of credits, and offers a transaction framework and client support to guide parties through the sale.
The 2022 Inflation Reduction Act (IRA) created a market for clean energy tax credits by allowing for their one-time transfer to other federal tax-paying entities – thereby making it easier for developers to raise the capital they need to finance their projects. Basis has forecast the annual transfer volume of clean energy tax credits to grow to over $60 billion by the end of the decade.
FP Investment Partners and Re:cap Global Investors plan to raise €400m for a fund targeted at the wind, solar, battery storage and electric vehicles sectors.
The partners are looking to invest in the sectors through their FP Lux Energy Transition Fund. This is a successor to their RE Infrastructure Opportunities Fund, which achieved a €290m final close in January 2023.
Dutch utility Eneco has submitted a planning application for a green hydrogen production plant in Rotterdam's Europoort industrial area.
Eneco is partnering with Mitsubishi on this up-to-800MW facility through the pair's Eneco Diamond Hydrogen joint venture. The project would use energy from solar and wind farms to produce green hydrogen for use in the industrial sector.
Danish utility Ørsted has finished installing the first turbine at its 130MW South Fork offshore wind farm in waters off the coast of New York.
This is the first wind turbine completed in New York waters. South Fork is set to be made up of 12 Siemens Gamesa turbines, and be fully commissioned in early 2024.
Fortescue Metals Group has taken final investment decisions to invest a combined $700m in two green hydrogen production plants.
The directors of the Australian mining giant have approved investments in the Phoenix Hydrogen Hub in the US and the Gladstone PEM50 Project in Queensland, Australia. The company has also approved an investment in a pilot green iron project in Western Australia.
BlackRock’s Evergreen Infrastructure fund has secured almost $1 billion in client commitments from European founding partners and has reached a deal to acquire a US commercial and industrial (C&I) solar and battery platform “well positioned for the energy transition”.
The cornerstone commitments to Evergreen Infrastructure come from investors including Intesa Sanpaolo, Italy’s largest bank, and Inarcassa, the first pillar pension scheme for Italian engineers and architects.. Western Europe, including Italy, is a key region for the Fund, with 50-60 per cent of the total portfolio expected to be allocated to the region.
The fund has signed definitive documentation to acquire, subject to customary closing conditions, Lighthouse, a US C&I solar and battery storage platform with an operating portfolio spanning six US states that capitalises on the growing demand for distributed renewable energy, which is supported by the recently enacted US Inflation Reduction Act.
Announced in June 2022, Evergreen Infrastructure is a core, open-ended infrastructure equity fund that focuses on investing in infrastructure businesses in Europe and North America aligned with the themes of energy transition and energy security. It seeks to deliver investors “consistent long-term cash yield and resilient inflation-linked, fully contracted returns by investing in a portfolio of core infrastructure businesses diversified across geographies and sectors”, BlackRock said. In addition to energy transition and energy security, the fund will also focus on thematic sectors including transportation, digital infrastructure and the circular economy.
Blackrock said the fund’s open-ended structure enables it to be a long-term partner for infrastructure businesses “looking for financing to support their evolution and growth through the decades-long energy transition”. It will work with portfolio companies to help implement decarbonisation activities and actively track, assess, and report on progress over time. Evergreen Infrastructure will also track Temperature Alignment Key Performance Indicators, which will help the portfolio management team align the fund, on an aggregate basis, to a 1.5°C temperature rise scenario, Blackrock said.
Anne Valentine Andrews, global head of infrastructure and real estate at BlackRock, said: “In today’s evolving energy landscape, companies are looking for capital that will partner with them as they adapt their businesses and navigate an accelerating long-term shift towards a lower-carbon economy. Evergreen’s forward-looking lens, partnership approach, and focus on core businesses and assets is designed to help investors capitalise on these dynamics, while supporting the sustainable growth of essential infrastructure.”
Flavio Gianetti, executive director of M&A and group shareholdings at Intesa Sanpaolo, said: “BlackRock's new fund will span Europe and North America, regions teeming with opportunities for the construction or revitalisation of sustainable telecommunications, digital, energy, gas storage, and renewable energy infrastructure.”
Inarcassa president Giuseppe Santoro, said: “By choosing financial policies that secure the pension future of our members, we are not only seeking to maximise returns; by joining BlackRock’s Evergreen Infrastructure fund we are entering a network of institutional investors who are active in supporting the transformation of an evolving, low-carbon economy, while promoting the wellbeing of communities and the environment.”
Macquarie Asset Management has launched a new onshore renewable energy business, Aula Energy, which will originate, develop, construct and operate utility-scale wind, solar and integrated batteries across the Australian and New Zealand markets.
Aula Energy’s initial portfolio has an expected capacity of 4 GW of planned projects “spanning every state in Australia and each asset will have grid connection potential,” a statement said. In terms of project specifics, construction of Boulder Creek Wind Farm near Rockhampton, Queensland, is expected to begin in 2024.
The initial portfolio includes a series of large-scale onshore wind farms in Western Australia totalling up to 2.4GW. These projects, to be developed in partnership with Green Wind Renewables, are in the early stages of development.
Aula Energy’s expected portfolio includes developments in New South Wales, Victoria, South Australia and Tasmania, with details to be “announced as they progress”.
The business will be led by Chad Hymas, who brings 20 years of experience in the energy industry across strategy, growth, regulation, operations, and finance.
He said: “A powerful collaboration with partners will deliver on Aula Energy’s vision to be a leading green independent power producer in Australia and New Zealand that is trusted and committed to providing sustainable energy, energy for the future. Key to Aula Energy’s approach will be the long-term sustainable development of these assets. We believe it’s through partnerships that we can have the most impact. That’s why we will prioritise long-term relationships and meaningful collaboration in developing our projects.”
Lachlan Creswell, head of Macquarie Asset Management’s specialist Green Investments team for Australia and New Zealand said: “Aula Energy offers Australian and international investors exposure to a unique and diversified portfolio at an important time for renewable energy markets in the region, in the context of increasing demand from commercial and industrial off-takers. The energy transition in Australia requires an acceleration in the deployment of new renewable generation. Macquarie Asset Management’s specialist Green Investments team is a global leader in decarbonisation solutions, and we are excited to expand this work through Aula Energy.”
