Macquarie Capital has team up with CIT Bank to help finance the first of a $200 million energy storage project pipeline in partnership with Advanced Microgrid Solution.
The 50MW fleet of battery storage systems is the first project to start development after Macquarie purchased the exclusive rights to the first 200MW of projects AMS will build for commercial, industrial and government sites last August, marking the Australian investor's entrance in the US storage market.
Financial details about the project were not disclosed.
The project will install Tesla Energy's Powerpack 2 lithium-ion batteries in Los Angeles and Orange, in the service area of Southern California Edison, the state's largest utility. SCE will purchase capacity from the battery systems under 10-year capacity contracts to provide load reduction services. They can also provide reserve capacity, solar integrate and voltage management services.
The battery system is expected to begin operations over the next 12 to 24 months.
Investors have long considered energy storage as key to fully integrating renewable energy in the electric grid, but high costs for the new technology have led to slow deployments. As costs decrease, utilities are increasingly willing to negotiate contracts with battery storage developers.
“Macquarie believes there is tremendous opportunity for this asset class and looks forward to continuing to grow its presence with leading innovators in the space, including AMS, CIT and Tesla,” Macquarie's global head of infrastructure Nick Butcher said.
As part of its deal with AMS, Macquarie will own the projects once they are operational. Other projects in the pipeline include Opus One Solutions, Skyscraper One Maritime Plaza, California State University, Shell Energy North America and the Inland Empire Utilities Agency.