Harmony Energy Income Trust has completed its £21.5m purchase of three ‘shovel-ready’ pipeline energy storage projects totalling 181.9 MW / 363.8 MWh, increasing the portfolio to nine projects with a total capacity of c.500MW / 1GWh.
These deals were done under an agreement that the trust secured at IPO which gave it a right of first refusal on up to 1GW of storage projects, from Harmony Energy Limited and Ritchie Bland Energy No. 2 Ltd (the developers). The trust is paying for the deal with the net cash proceeds of its recent C share issue and with the issue of 7m new C shares to the developers.
The three projects, known as Wormald Green, Hawthorn Pit and Rye Common (Phases I and II), are expected to be energised in Q1 2024, Q2 2024 and Q3 2024 respectively, with grid offers (the right to connect to the National Grid) secured. Harmony Energy Advisors Limited (the investment adviser) has already conducted a tender process for the supply of battery systems for this batch of projects and agreed material terms with the selected supplier of two-hour duration battery systems.
The trust has also agreed terms to increase the amount that it can borrow under its existing loan facility and a new revolving credit facility. This will fund the construction of the Wormald Green and Hawthorn Pit projects as well as the remaining Grid payments for Rye Common, which are essential to maintain that project’s timeline. The combined facility will increase the total debt available to about £130m, subject to final signing. Alternative funding options for the build-out of Rye Common are currently being considered and the land has been acquired by Harmony Energy Limited. [Really, this should be by issuing more shares as was the plan before the mini budget torpedoed the last fundraise, and now that the trust and its C shares are back trading at a premium, perhaps this would be possible.]
Both phases of the Rye Common project are held within a single special purpose vehicle (the SPV) and share a single 99MW grid connection. Whilst Rye Common Phase I has full planning consents in place, Phase II is awaiting planning consent which is expected to be received in early 2023 in line with the overall project timetable. Given the single project SPV and single grid connection, acquiring the project now will mean that the trust can make the necessary grid milestone payments to continue to secure the agreed energisation date. In the unexpected event that Phase II planning consent is not granted, a claw-back mechanism has been agreed.
Current Portfolio
The three project acquisitions increase the total capacity of projects in the company’s portfolio to c.500MW / 1GWh, with energisation dates between the end of 2022 and 2024.
|
Project |
MW / MWh |
Location |
Target Commercial Operations Date |
Status (12.12.2022) |
|
Pillswood1 |
98 / 196 |
Yorkshire |
Operational1 |
Operational |
|
Broadditch |
11 / 22 |
Kent |
Q4 2022 |
Under Construction |
|
Farnham |
20 / 40 |
Surrey |
Q1 2023 |
Under Construction |
|
Rusholme |
35 / 70 |
Yorkshire |
Q3 2023 |
Under Construction |
|
Bumpers |
99 / 198 |
Bucks. |
Q3 2023 |
Under Construction |
|
Little Raith |
49.5 / 99 |
Fife |
Q4 2023 |
Under Construction |
|
Wormald Green |
33 / 66 |
Yorkshire |
Q1 2024 |
Shovel Ready |
|
Hawthorn Pit |
49.9 / 99.8 |
County Durham |
Q2 2024 |
Shovel Ready |
|
Rye Common |
99 / 198 |
Surrey |
Q3 2024 |
Shovel Ready2 |
|
Total |
494.4 / 988.8 |
|
||
1 As announced on 21 November 2022, Pillswood was successfully energised in November 2022. At the time of energisation it was the largest BESS project in Europe (by MWh). 2 Phase II subject to planning as explained above.
HEIT : Harmony buys three pipeline projects