SUSI Partners is investing in a virtual power plant in Western Australia, the first of several such projects the energy transition-focused fund manager plans to make in partnership with Starling Energy Group, an Australian VPP developer.
“This is becoming a case study for us in terms of how we innovate and how we position ourselves in new markets and new niche segments,” Matteo Zanni, who heads the transaction for SUSI as director in the firm’s investment team, told Infrastructure Investor.
SUSI has agreed to invest up to A$50 million ($34 million; €31 million) in a first roll-out of residential rooftop solar PV and battery storage systems across the state of Western Australia, allowing users to generate and consume clean power for up to 90 percent of their electricity needs, the firm said in a statement announcing financial close of the transaction.
“The ultimate goal for this project is to support the grid,” Zanni said, which it is able to do since it aggregates and manages a portfolio of solar plus storage systems as a single plant. “And it allows us to use the batteries to provide these services should the grid operator call on us to do so.”
Asked how many systems will be installed, Zanni said SUSI Partners gave availability to fund the first 5,000 units.
The investment marks the second for SUSI in Australia and the fifth through its Energy Storage Fund, a vehicle the firm closed in June 2018 on €252 million and which targets investments in OECD countries.
SUSI will deploy the A$50 million it has committed to the project as the installations progress, “so we will not make the entire capital outlay from day one”, Zanni said. “We expect to deploy the full amount over the fund’s investment period which goes until 2021.”
At the end of the project life and upon achieving SUSI’s financial objectives, ownership of the platform will be transferred to the community, providing a clear path forward for the project beyond SUSI’s holding period and also comprising the project’s “single, most important pillar”, which, according to Zanni, allows the community to take an active role in the energy transition and benefitting from doing so at the same time.
Asked whether SUSI will invest in other projects alongside Starling Energy, Zanni said: “We’re looking at a number of projects. They’re all similar in the sense that they target the same kind of investment – solar and storage technologies with slightly different business models, depending on the project. We haven’t announced any other transactions but we’re working on a number of them.”
Founded in 2009, SUSI currently manages more than €1 billion in investor commitments across five funds focusing on clean energy generation, energy efficiency, energy storage and integrated energy solutions.
It is currently raising SUSI Energy Efficiency Fund II, which will invest in North America and Europe and has a target size of €300 million. Last month, the Asian Infrastructure Investment Bank said it was looking to commit up to $50 million to SUSI’s Asia Energy Transition Fund, which will invest in South-East Asia. According to AIIB documents, SUSI is planning to reach a final close on $250 million by the third quarter of 2020.
Last week, Infrastructure Investor reported that the firm’s founder, Tobias Reichmuth, will be stepping down as chief executive at the end of the year to serve as chairman of the board. SUSI’s chief investment officer Marco van Daele and Marius Dorfmeister, who joined the firm in October as global head of clients, will succeed Reichmuth as co-CEOs on 1 January, while continuing in their current roles.