Northland Power Secures Financial Close for 250 MW Oneida Energy Storage Project

It looks like the energy storage infrastructure is burgeoning in Canada with many announcements being made this week. In the fresh case, Toronto-headquartered Northland Power has announced that its 250 MW Oneida Energy Storage Project in Southern Ontario has reached financial close. It has secured all the necessary financing. The total cost for the project is approximately $800 million.

Northland currently owns 72% of the project, which is being developed in partnership with NRStor, Six Nations of the GRDC and Aecon Group.

Northland Power said that Oneida is a 250 MW /1,000 MWh battery storage facility and the firm’s first investment in energy storage that offers immediate size and scale in a key target market. The firm will look at further opportunities within the Ontario market and other key markets to build out its battery energy storage portfolio.

Full commercial operations for the project are expected to commence in 2025, said Northland Power.

“Today’s announcement is a significant milestone for the Oneida project and a key step in Northland’s strategy of developing and operating battery storage facilities which will play a key role in providing stability and reliability to energy grids,” said Mike Crawley, President and Chief Executive Officer of Northland.

Consistent with its financing strategy, Northland Power will utilize non-recourse project-level financing to fund approximately 75 per cent of the construction costs. Its equity component will be funded from existing cash on hand and available liquidity under its revolving credit facility. Total debt required for the project has been fully committed by an external lender in the form of a non-recourse construction and term loan, matching the tenor of the capacity contract.

Natural Resources Canada (NRCan) has also provided funding from the Smart Renewables and Electrification Pathways program, recognizing that the project will reduce greenhouse gas emissions. The remaining costs will be funded by the contributed equity from the various partners.

Oneida will benefit from a 20-year capacity contract with the IESO in Ontario. Contracted revenue constitutes approximately 60% total revenues, and the remaining will be earned from operating the battery in the wholesale market.

Just the other day, Boralex had its two energy storage projects, totaling 380 MW of nameplate capacity, selected by the Ontario Independent Electricity System Operator (IESO).