NextEnergy Solar Fund (NESF) has announced that it has into a £100m joint venture partnership (JVP) with Eelpower Limited, a leading battery storage specialist in the UK. The joint venture partnership is targeting the establishment of up to 250MW in projects with £100m in invested capital and has already signed its first acquisition of a 50MW standalone battery storage project. NESF says that the addition of energy storage assets to its portfolio of 99 operating solar assets comes as a result of its expanded investment mandate approved by shareholders in September 2020. The approval allows up to 10% of NESF’s Gross Asset Value to be invested into standalone energy storage systems.
How does the joint venture partnership work?
The joint venture partnership is owned 70% by NESF and 30% by Eelpower. It includes a framework for the acquisition of up to 250MW (including this initial 50MW project) of battery storage assets, generating complementary revenues to NESF’s existing solar portfolio. NESF says that battery storage forms a significant part of its growth and diversification strategy, and will be a key enabler to the further market deployment of solar assets in the UK. Given the intermittent nature of renewables, growth in battery storage will contribute to the UK Government’s drive to move to Net Zero by reducing the UK’s need for carbon emitting energy sources whilst contributing to tackling climate change.
The first acquisition
The maiden 50MW project is a ready-to-build, standalone battery, located in Fife, Scotland, which will provide additional stability to the grid via its export capacity. The project is expected to be energised and grid-connected in 2022. NESF says that one the project is operational, it presents NESF with multiple attractive revenue opportunities which include:
- Arbitrage Energy Trading, providing vital balancing capability for the national and local grid while trading in the £14bn UK electricity market;
- The Capacity Market, the UK policy mechanism from which storage assets derive longer term revenues, based on the availability to dispatch electricity during periods of system volatility; and
- Ancillary Services (including Firm Frequency Response and Dynamic Containment) providing sub-second increases or decreases in power output from the battery to maintain stability of grid frequency.
Who are Eelpower?
Eelpower is a specialist in the UK battery market with a strong track record and extensive experience in the delivery, management, and optimisation of battery storage assets in the UK. Eelpower will provide EPC and ongoing specialist asset management services to the storage assets and will source further acquisition opportunities for the JVP.
Comments from Kevin Lyon, Chairman of NextEnergy Solar Fund
“The board and I are delighted to announce NESF’s significant move into energy storage, forming an important part of NESF’s future growth plans. The joint venture lays the foundations and provides momentum for NESF’s pipeline of energy storage assets whilst also ensuring collaboration with a specialist partner, Eelpower, in operating these assets. NESF is now demonstrably progressing its exciting growth strategy both in UK energy storage and international expansion of its portfolio of solar projects.”
Comments from Ross Grier, UK Managing Director of NextEnergy Capital
“This is an exciting deal and opportunity for NESF as we introduce the first standalone utility scale battery project to the fund. We have been involved in the energy storage space for several years, having acquired two small-scale batteries back in 2017. It is encouraging to see that battery technology is now at a stage where it is feasible to introduce projects like this to the NESF portfolio. We are looking forward to securing further investment opportunities in this sub-sector alongside our partner Eelpower.”
Comments from Mark Simon, CEO of Eelpower
“Eelpower was founded to promote the transition to renewable energy sustainable, through the creation of a platform of grid-scale electricity storage assets. Since 2015, the Eelpower team has defined and developed this sector and is delighted to partner with NESF to lead the next stage of the UK’s energy transition.”