Gore Street Energy Storage Fund (GSF) has announced that it will acquire Big Rock, a 200 MW / 400 MWh energy storage project located in California, United States from Avantus. The project is part of a grid network that supplies electricity to 80% of California and a small part of Nevada. GSF’s investment manager estimates that the project will have an unlevered IRR in the range of 10-12%, in line with GSF’s target. The acquisition will cost, including capex spent on or around the closing date, approximately $110m. GSF will be left with c.£144m in cash after the transaction, £66m of which is already committed to other obligations.
Following this deal, the portfolio will consist of 27 projects with a total capacity of 1,173.2 MW of operational and construction assets across the UK, Ireland, Germany and the US (Electric Reliability Council of Texas or ERCOT and California Independent System Operator or CAISO). Big Rock will be connected to CAISO, which provides electricity to 80% of California and a small part of Nevada.
The construction-ready project has secured material land rights, planning consents and a grid connection scheduled for H2 2024. Commercial operations will commence shortly thereafter as a battery supply contract for all battery cells for the two-hour duration site, and engineering procurement and integration contracts have been secured. It will be eligible to benefit from an investment tax credit for up to 30% of qualifying capital expenditure via the Inflation Reduction Act, which was passed in late 2022.
GSF : Gore Street buys 200MW project in California