Quinbrook Infrastructure Partners has sealed its second UK deal following the acquisition of three gas engine power projects with a combined capacity of 56MW.
The move brings the Australia-based asset manager’s UK portfolio to 140MW, following its maiden UK deal last month when it paid £44.6 million ($59.8 million; €50.7 million) to buy four gas projects with a total capacity of 84MW. Quinbrook said after the latest deal that its committed capital to distributed UK power generation stands at more than $100 million between now and the end of next year.
The three projects were accredited with 15-year contracts in the UK’s December 2015 capacity markets auction, a subsidy-driven procurement of reliable power generation. They are also pre-qualified for another similar auction set to take place at the beginning of next year and are scheduled to become operational towards the end of 2018.
“Intermittent renewables have grown to such an extent in the UK market that reserve peaking assets, such as those we are now building, will provide an important enhancement to the security of supply and grid reliability whilst also offering the potential for an attractive return on investment,” said David Scaysbrook, co-founder and managing partner of Quinbrook.
“The UK has developed one of the world’s most sophisticated regulatory models that encourages new investment in flexible, lower-carbon power assets that will enable the continued phase-out of coal and continued growth in renewables without untenable risks to power supply reliability.”
Quinbrook did not state which fund was used to buy the latest sites, although a source familiar with the matter told Infrastructure Investor when agreeing last month’s UK gas deal that they were bought via commitments from a fund it is raising focusing on low-carbon power. The fund has a target between $1 billion and $1.5 billion, set to be completed by the end of next year.
Quinbrook added that it plans to establish its own operations and maintenance team in the UK given the growth of the portfolio. The group was founded by former Capital Dynamics duo David Scaysbrook and Rory Quinlan in 2015 and is focusing on investments in the US, UK and Australia.