31 October 2022

NESF announces 250MW Battery Storage Project Acquisition

NextEnergy Solar Fund is pleased to announce it has acquired the development rights, permits, and initial grid milestones for a 250MW portfolio of high-quality battery storage projects and grid connections.

The strategic portfolio named ‘Project Lion’, located in the East of England, was acquired for a consideration of £32.5m and will increase the current announced standalone battery storage in NESF’s joint venture partnership with Eelpower to 300MW.   

Once constructed, the project will provide vital grid balancing services whilst harnessing excess electricity generation from wind at low import prices and then exporting electricity at times of low generation and high prices.  The project has secured planning permission and grid connection rights.

The project provides a very attractive return profile for the Company’s portfolio as battery storage is a highly complementary technology to solar photovoltaics, being uncorrelated and providing further diversification to the Company’s portfolio from a technology, revenue and geographic perspective.  

The project is a two-hour (500MWh) duration system and is expected to be energised in 2025, targeting an asset life of at least 50 years.  

This announcement sets another key milestone for the Company and further increases NextEnergy Solar Fund’s participation in the UK battery storage market.  Once energised, the project will significantly contribute to increasing the UK’s energy independence and will help accelerate the increased penetration of renewable energy in the UK.

Full construction of the project remains subject to shareholder and FCA approval due to the Company’s existing investment policy being limited to 10% of Gross Asset Value into energy storage.  The Company’s investment manager and advisor, NextEnergy Capital, will continue to consult investors over the coming months to seek support to increase this limit to allow the Company to fully capture the energy storage growth opportunities available to the fund.

Kevin Lyon, Chairman of NextEnergy Solar Fund commented:

“This acquisition of development rights adds significantly to NESF’s participation in the UK battery storage investment space.  The project will take our battery storage programme up to a capacity of 300MW, showing how NESF has been able to secure a significant development pipeline of storage projects in a short timeframe.  NESF offers investors a unique investment opportunity, making a real difference in the transition to net zero.”

Michael Bonte-Friedheim, CEO of NextEnergy Group said:

“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.  For NESF, it is a site that adds to its burgeoning exposure to UK battery storage, a sector where we, as the investment advisor, see enormous growth potential with synergies to NESF’s current solar portfolio.  We look forward to constructing this project by 2025 and to operating it for decades into the future.”

Click here for the full press release