Triple Point Energy Efficiency buying battery portfolio – Triple Point Energy Efficiency says that its investment manager has secured, under exclusivity, a near-term pipeline of £108m of grid-scale battery energy storage systems assets. If the deal progresses to plan, the portfolio will be substantially deployed. To fund the short-term pipeline and to allow greater financial flexibility going forwards, the company is in the process of arranging a revolving credit facility of up to £40m.
Update on hydro assets
Towards the end of 2021, the company paid £47m for a portfolio of nine ungeared hydroelectric power assets, with a total generation capacity of 6.6MW. Over the final three months of 2021, the performance of the portfolio was 17% ahead of budget (which provides the base case for valuation purposes) from a generation and revenue perspective, and 5% ahead in terms of availability.
About 90% of revenues for the hydro portfolio are underpinned by Feed in Tariffs with a remaining period of 14 years. These are indexed to RPI, with the next uplift due in April 2022. With UK RPI currently at 7.5%, this is expected to result in a meaningful uplift to revenues. [It is worth us underlining the attraction of the inflation linkage for renewable subsidies at this time. This benefits all of the listed renewable generation funds with assets in the UK.]
An enhancement programme is underway, designed to optimise the flow from the catchment area for the generators, which will improve the generation profile for the assets. A key aspect of this programme is the re-instatement of peatland which has significant associated environmental benefits related to biodiversity and carbon sequestration.
Update on the CHP+ portfolio
Spark Steam in Teesside comprises 3.3 MW of power generation facilities and supplies heat, electricity, and also carbon dioxide to the UK’s largest tomato grower. Spark Steam has signed a new, additional power purchase agreement with a well-known, large food manufacturer through a private wire arrangement. This arrangement benefits the food manufacturer by providing it with savings against its electricity costs, whilst enabling Spark Steam to benefit from a greater level of contractual cashflows at more attractive rates. By supplying power through a short private wire, significantly greater energy savings will be made than previously expected due to much reduced transmission losses as compared to sales to the national grid.
In addition to the grid-scale battery energy storage system opportunities under exclusivity, the manager is also in discussions on a wider pipeline of £454 million across a range of sectors [in other words, TEEC may soon be asking for more money].
TEEC : Triple Point Energy Efficiency buying battery portfolio