NextEnergy Solar Fund (NESF) has announced it has acquired the development rights, permits, and initial grid milestones for a 250MW portfolio of high-quality battery storage projects and grid connections, with the project having secured planning permission and grid connection rights. The strategic portfolio named ‘Project Lion’, located in the East of England, was acquired for a consideration of £32.5m and will increase the current announced standalone battery storage in NESF’s joint venture partnership with Eelpower to 300MW (NESF has a combined installed power capacity of 865MW). Once constructed, the project will provide vital grid balancing services whilst harnessing excess electricity generation from wind at low import prices and then exporting electricity at times of low generation and high prices.
The project is a two-hour (500MWh) duration system and is expected to be energised in 2025, targeting an asset life of at least 50 years. It provides a very attractive return profile for NESF as battery storage is a highly complementary technology to solar photovoltaics, being uncorrelated and providing further diversification for NESF.
NESF note that full construction of the project remains subject to shareholder and FCA approval due to NESF’s existing investment policy being limited to 10% of Gross Asset Value into energy storage.
Michael Bonte-Friedheim, CEO of NextEnergy Group commented: “The project will provide crucial grid balancing services for a congested area in the UK, helping manage the ebbs and flows of renewable energy generation and nationwide demand for electricity. For NESF, it is a site that adds to its burgeoning exposure to UK battery storage, a sector where we, as the investment advisor, see enormous growth potential with synergies to NESF’s current solar portfolio.”
[NESF’s increased exposure to battery technology seems like a logical form of diversification for a fund which has previously focused on solar assets. The investment has the potential to boost the company’s NAV and revenue over the medium term.]
NESF : NextEnergy Solar Fund acquired 250MW battery storage project