Paris-based Ardian Infrastructure has entered the energy storage space through a joint venture with a subsidiary of Italian energy company Enel to develop battery systems for commercial and industrial customers in Ontario, Canada.
Ardian, which did not disclose the investment amount, is taking an 80 percent stake in a portfolio company created to manage 10 battery systems with storage capacity ranging between 3MW and 21MW, a spokesman for the firm told Infrastructure Investor. Three systems are already operating, four are expected to be completed by the end of this year and three more are expected to be built in 2021.
Stefano Mion, co-head of Ardian Infrastructure US, told Infrastructure Investor in an interview that the battery systems sit behind-the-meter and will take electricity from Ontario’s existing grid and power its customers’ operations when needed.
“We own the batteries and lease them to our clients, and we both share a cost-saving mechanism that generates revenue,” Mion said. “The customer is giving us part of the benefit they’re receiving for saving money on electricity.”
The demand for these systems comes in response to regulations in Ontario that industrial businesses have to either reduce power consumption or pay a surcharge for extensive use of grid electricity, Mion explained. He said this was also Ardian’s first investment in Canada.
“Energy storage is a sector we’ve been looking at for a while,” he said. “The way we’re approaching the sector is by looking at it as grid optimisation, as part of the global energy transition story.”
Ardian’s joint venture with Enel X, a business line of the Italian energy company dedicated to developing innovative and transformative products in the energy sector, is a continuation of the relationship forged in 2009 when Ardian bought Enel Group’s stake in 2i Rete Gas, an Italian gas distribution company. That paved the way for the recent energy storage transaction, Mion said.
“Enel X was looking for a financial partner for this transaction, and when we raised our hand, we were a known entity and had common ground to start from for this venture,” he explained.
Through the partnership, Enel X will continue to construct, operate and maintain these projects while Ardian will continue to support Enel X in the development of similar projects across North America, the spokesman said.
The deal is the fifth transaction from the Ardian Americans Infrastructure Fund IV, which closed in May 2018 on $800 million. The fund is focusing primarily on investments in North America, Chile and Colombia.
Other assets in Ardian’s Americas fund portfolio include LBC Tank Terminals, which is headquartered in Belgium though its main operations are based in Baton Rouge, Louisiana, and Houston, Texas.
The firm also launched Skyline Renewables, a US-based renewables platform, in partnership with Transatlantic Power Holdings in March 2018. Since then, Skyline has built up its capacity to 803MW, with a view to growing it to 3GW.