Deals

Nexif Energy to deploy Australia’s first unsubsidised battery

The 10MW grid-connected energy storage system is part of a 212MW greenfield wind project being developed by the Denham Capital-backed JV. The battery will complement other large-scale batteries in south Australia, including ElectraNet’s 30MW battery on the York Peninsula and Tesla’s 100MW facility near Jamestown.

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Nexif Energy, a joint venture between energy group Nexif and private equity firm Denham Capital, has reached financial close for stage one of the 212MW Lincoln Gap wind farm, a facility that comes with Australia’s first unsubsidised, utility-scale battery.

Stage one of the project, which is a A$300 million ($228.8 million; €196 million) development, includes a 126MW wind facility and a 10MW energy storage system. The project has secured a A$150 million debt package from the Clean Energy Finance Corporation, the country’s state-run green financier.

“Large-scale battery technology is developing rapidly, and we expect costs to fall significantly, as we have seen with wind and solar,” said Andrew Gardner, who leads CEFC’s wind sector division.

“This is the first development project in Australia which has been able to secure debt finance for a grid-connected, large-scale battery component on a non-subsidised basis,” he said, adding that this transaction provides an important financing model for other developers and investors.

The 10MW battery will complement other large-scale batteries in south Australia, including ElectraNet’s 30MW battery on the York Peninsula and Tesla’s 100MW facility near Jamestown. These energy storage systems are expected to provide a significant amount of frequency response services to the south Australian grid, which suffered from significant blackouts earlier this year.

The Lincoln Gap project is expected to become operational from mid-2018. It has secured two long-term Large-Scale Generation Certificate agreements with local energy retailer ERM Power and a long-term offtake agreement with power producer Snowy Hydro. The project will also supply electricity to the national grid.

Nexif acquired the Lincoln Gap project, as well as a portfolio of Australian wind and solar projects, from OneWind Australia in December 2016, as an expansion of its investment mandate. Singapore-based Nexif was founded in August 2015 to develop renewable energy projects across Southeast Asia.