Quinbrook Infrastructure Partners has made a further investment in US solar by launching Primergy Solar and is preparing to launch a UK-focused vehicle later this year.
Primergy is a platform business that will acquire, develop and operate distributed and utility-scale solar PV and battery storage projects in North America. Quinbrook has made the investment through its Low Carbon Power Fund, its inaugural fund that closed on roughly $1.6 billion in 2019. The firm did not disclose the size of its investment in Primergy.
The Low Carbon Power Fund is already invested in the $1.1 billion 690MW Gemini solar PV project in Nevada, which will serve as a cornerstone asset for Primergy. The US Department of the Interior and the Bureau of Land Management gave final approval for the project earlier this month, which Quinbrook said it believes is the largest solar PV project in the world.
“We decided it was a chance to merge the distributed and utility-scale projects under one vertical and do something similar to what we’ve done with Glidepath,” Quinbrook co-founder David Scaysbrook told Infrastructure Investor, referring to Glidepath Power Solutions, its platform business for investing in US wind projects.
“We think that solar and battery storage hybrid [projects] is the biggest game in town, and having a dedicated speciality in that, off the back of Gemini in particular, could benefit everything we’re doing across the board.”
Primergy will be headed up by chief executive Ty Daul, who joins the business from Recurrent Energy Group, the US project development arm of Canadian Solar, where he served as president.
Scaysbrook told Infrastructure Investor that the Low Carbon Power Fund would likely be fully deployed by the end of 2020.
“We have additional commitments that sit on top [of the $1.6 billion close], but the fund itself we think will be fully committed by the end of this year,” he said.
He added that the firm had “never been busier” than in the past four months and that covid-19 had not disrupted operations. “The things that were already underway or committed to before March are showing no signs of falling over or fracturing,” he said.
“For the US market, in the tax equity market there will be a flight to quality and it’ll be a buyer’s market for the next couple of years. The pricing and availability of tax equity [financing] is the biggest cloud hanging over the market.”
Scaysbrook said Quinbrook is preparing to enter the UK renewables market in a significant way after spotting opportunities, by launching a UK-focused vehicle soon.
“We’ve been out of the UK market doing mostly grid support projects, but we’re now seeing an opportunity to do some more in renewables there. We’ll be investing more aggressively in the UK in the next two years.”
This wouldn’t be a second version of the Low Carbon Power Fund, but rather something “more bespoke” for the UK market.
“We’re not interested in doing another ‘me too’ wind and solar fund in the UK – that’s been done to death and just isn’t that interesting anymore. We have got a different way of doing things that we are pretty excited about, and we’ve got a pipeline of £1 billion [$1.22 billion; €1.11 billion] already. It’s a strategy that’s very ESG and energy transition-focused, but it’s still heavy infrastructure,” he said.
The firm’s home market of Australia is still relatively unattractive, though: “We’re sticking to the embedded networks business that we’re building. I still think the Australian market is the least appealing of the three that we’re involved in, and in Australia we really want to stay behind the meter if we can.”