esVolta, a developer of utility-scale battery energy storage projects, recently entered into a $140 million senior secured credit facility to fund a 136MW/480MWh portfolio of eight storage projects in California.
It is this type of institutional investment that will drive the expected massive growth of the energy storage industry.
It’s not the next lithium-ion battery breakthrough that’s going to accelerate the energy storage industry. This is not the next inflated promise of a flux battery start, a compressed air program, a solid-state battery research project, or an energy storage dream. financed by Bill Gates.
These are energy storage projects as quality financing tools for institutional investors that will grow the energy storage market to $546 billion in annual revenue by 2035, as predicted by Lux Research , or increase activity tenfold from 2018 to 2023, reaching $5 billion per year. , according to Wood Mackenzie.
One of the largest debt transactions in the energy storage market
CIT’s power and energy business led the financing round, alongside Siemens Financial Services (SFS), CoBank, ACB and KeyBanc Capital Markets.
These investor names can usually be found in the financing of natural gas power plants and wind projects – so this entry into energy storage is a watershed moment.
Krish Koomar, CFO of esVolta, said it was “one of the largest and most innovative debt transactions” in energy storage.
A few years ago there was a wave of funding for energy storage – more in the behind-the-meter area than these projects. Stem, a provider of commercial energy storage systems, added $100 million in funding from energy investor Starwood Energy Group, Generate and Clean Feet Investors. Consumer infrastructure investor Macquarie Group planned to invest $200 million in a fleet of Advanced Microgrid Solutions battery projects.
Since then, Stem and AMS have had to pull out and change their business plans. Stem recently flagged it for sale.
“Institutional investors are waking up”
Randolph Mann, president of esVolta was interviewed by pv magazine and noted, “We believe this is the largest and most significant funding for self-contained meter-front energy storage.”
He added that the battery chemistry used in these projects is lithium iron phosphate (LiFePO4) – with batteries supplied by Powin Energy, a minority shareholder in the company. Powin’s battery cells are supplied by CATL and used in a modular 140 kWh battery that scales from 125 kW to several megawatts.
Mann notes that these projects are “all stand-alone projects in front of the meter, not solar-plus-storage projects.” esVolta has long-term revenue contracts on all the projects and has partnered with Southern Power Company on four of them. The capital will be used to finance the construction and operation of the projects.
Mann adds that they are “all grid-connected to the CAISO market” and are “long-term projects with investor-owned utilities won through competitive bidding over the years.” He adds: “The market for stand-alone projects is much larger and there will be more large-scale projects.
Mann said, “Institutional investors are waking up and ready to invest in storage. These projects are conducive to traditional project financing.
Battery-based storage projects are designed to provide power, capacity, and ancillary services to the California electrical system. Here is a list of esVolta projects.
