Slowly And Steadily, Battery Storage Builds Up To Make The Renewables Case Stronger

By Saur News Bureau/ Updated On Thu, Oct 19th, 2023

Highlights :

Plus Power LLC announced completion of $1.8 billion in new financing for standalone battery storage, including the largest single such project financing to date, to help stabilize the U.S. electrical grid while incorporating more solar and wind energy
The financing for the 1.04 GW / 2.76 GWh in projects, including largest single project financing to date for standalone storage, will go some way to ensure renewables power is not inflationary, and can actually deliver.

Slowly And Steadily, Battery Storage Builds Up To Make The Renewables Case Stronger

The announcement by Plus Power LLC of $1.8 billion in new financing for standalone battery storage, including the largest single such project financing to date, to help stabilize the U.S. electrical grid while incorporating more solar and wind energy should be welcomed. The news comes at a time when detractors have been challenging the relevance of not just large scale solar, but also wind farms, on the case that energy storage is simply too expensive. Thus, for the sector to continue to grow and deliver on its promise of lower emissions worldwide, storage costs must come down, and these large projects will be a crucial path to discovering efficiencies. Of course, few detractors point to the almost $7 trillion dollars of implicit and direct subsidies for fossil fuels, while counting every billion spent on renewables.

Construction underway at the Sierra Estrella Energy Storage project in Avondale, Arizona, which just received the largest financing package for a single standalone energy storage project, worth $707 million. (Image: Plus Power)

Plus Power, an energy storage leader, will use the capital to fund the construction and operations of five projects. It has a rapidly growing portfolio of large-scale lithium-ion battery systems in more than 25 states and Canada, and the company is executing on 10 gigawatts of interconnection capacity now in transmission interconnection queues.

The $1.8 billion financing announcement includes Plus Power’s $707 million financing for the 250 megawatt Sierra Estrella Energy Storage facility in Avondale, Arizona, west of Phoenix. It will be the largest to date for a standalone energy storage project. The 11-acre footprint of the Sierra Estrella project allows the project to be sited without attached generation, closer to load.

The announced transactions are also supporting construction of 700 megawatts of batteries on the ERCOT grid in Texas. Three new Plus Power battery plants will begin operation by next summer to handle increased demand amid increasingly extreme temperatures and numerous days of scarce operating reserves on the power grid.

For example, as this year’s summer heat waves triggered record demand for electricity, Plus Power’s existing 100-megawatt Gambit Energy Storage facility in Angleton, Texas, repeatedly provided energy and ancillary grid services (such as regulation up and down, contingency reserve, and frequency response) to help grid operators stabilize the power system and avert a blackout.

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The size and breadth of the financings by leading institutions – and the projects’ geographic and revenue structure diversity – highlights the variety of services and value that well-sited standalone energy storage can offer power markets.

Among the completed transactions were construction, term, and tax equity financings totaling $884 million on three new standalone storage facilities in Texas. They bring Plus Power’s current ERCOT portfolio to 800 MW, or 1,575 MWh. Deutsche Bank and First Citizens Bank were the coordinating lead arrangers, with First Citizens Bank as the administrative agent and Siemens Financial Services, Inc. acting as the joint lead arranger. They include:

$212.2 million of tax equity financing from Foss & Company, as well as $276 million of construction and term financing, for the 300 MW / 600 MWh Rodeo Ranch Energy Storage facility in Pecos.
$196 million of construction and term financing for the 200 MW / 400 MWh Ebony Energy Storage facility in Comal County, northeast of San Antonio.
$200 million of construction and term financing for the 200 MW / 400 MWh Anemoi Energy Storage facility in Hidalgo County, on the Mexican border northwest of Matamoros.

While the Ebony and Anemoi projects are expected to operate as merchant resources in the ERCOT wholesale market, Plus Power executed an innovative hedge for Goldman Sachs’ commodities group for a portion of the Rodeo Ranch Energy Storage facility.