Aerial drone image of Eelpower's Rock Farm battery storage site. The developer and NESF committed to a £200 million JV earlier this year. Image: Eelpower.
NextEnergy Solar Fund has acquired a “strategic portfolio” of battery storage development projects located in a grid-congested area in the East of England.
The solar PV and energy storage investment vehicle said today that it has acquired the 250MW portfolio of two-hour duration (500MWh) battery projects from an undisclosed developer. The value of the deal was disclosed however, at £32.5 million.
With planning permission and grid connection agreements in place, NextEnergy Solar Fund (NESF) gets the development rights, permits and grid connection work for the standalone battery energy storage system (BESS) projects.
The fund noted that it will be good for the diversification of its portfolio, which currently stands at a combined capacity of 865MW of solar PV and battery storage, to have separate solar and BESS assets and spread technology, revenue and geographical risks and opportunities.
The fund, which celebrated the start of operation of its 100th solar PV plant earlier this year, is however retrofitting some of its existing solar PV power plant sites with co-located battery storage.
NextEnergy Solar Fund (NESF) intends for the 250MW/500MWh project portfolio to be online in 2025. It is expected to perform grid-balancing services, and is also located, like the 200MW project Gore Street Capital’s energy storage fund announced the acquisition of today, in a place on the grid where it can be used to charge from and absorb wind power at times of abundance.
NESF said it would be able to arbitrage the lost-cost wind and sell it at times of lower generation and high prices.
“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,” NextEnergy Group CEO Michael Bonte-Friedheim said.
The project will be developed and owned by NESF together with developer Eelpower, which the fund has partnered with to work on UK battery storage assets. The pair’s first acquisition was a 50MW project in Scotland in 2021, and in September they made a £200 million launch of their second joint venture (JV). NESF owns 75% of the JV and Eelpower 25%. At the time of the JV’s launch, Bonte-Friedheim said its pipeline stood at about 500MW.
Shareholder approval and then FCA approval will be sought for the project before its construction can go ahead, with NESF having committed to limiting energy storage investments to 10% of Gross Asset Value. NESF is said to be seeking support from investors to allowing NextEnergy to raise that cap, in order to capitalise on energy storage market opportunities.