London-listed NextEnergy Solar Fund has made its first move into energy storage with the acquisition of two UK solar plants co-located with batteries.
The fund has paid £9.6 million ($12.8 million; €11 million) for the Salcey and Pierces projects, which have a combined capacity of 7.2MW and have been integrated with lithium-ion battery systems with a combined capacity of about 1MW.
The two projects have been made operational in 2014 and 2015 respectively and while the Salcey site benefits from 1.4 ROCs under the UK’s renewable energy subsidy system, Pierces is only aided by the feed-in tariff. The batteries can provide both frequency response and grid balancing services. The batteries were affixed in 2016.
NESF’s move into owning storage comes 18 months after it revealed it was “exploring the feasibility” of applying batteries to its existing solar portfolio, which now has a total capacity of more than 550MW. The fund is also examining building a portfolio of unsubsidised projects, for which it has bought four projects under development but is yet to construct them – citing concerns about their current profitability.
NESF has become one of the few solar asset owners in the UK to also own co-located battery projects. It joins mid-market fund manager Ancilla, which teamed up with developer Anesco last year to deploy a 12MWh battery portfolio. NESF is the first UK-listed solar vehicle to own such assets.
NextEnergy Capital, the fund manager of NESF, is also currently raising an unlisted fund. The firm is seeking $750 million to invest in utility-scale solar projects on a global basis.