Zouk injects £30m into UK energy storage pipeline

Projects of up to 50MW will be funded by the firm’s €220m second Renewable Energy and Environmental Infrastructure Fund.

UK-based investment firm Zouk Capital has penned a £30 million ($38.9 million; €34.1 million) deal to invest in storage developer Green Hedge.

Zouk will take an undisclosed majority stake in the company, which has previously focused on developing and selling solar projects in the UK totalling 150MW of capacity across 20 sites.

The fresh equity injection will help Green Hedge realise its energy storage pipeline over the next 12 months, spread across projects and set to have capacity of between 10MW and 50MW. Green Hedge declined to state how many sites are in the company’s plans.

The deal has been financed as part of Zouk Capital’s €220 million Renewable Energy and Environmental Infrastructure Fund II, which closed in September 2014. Its previous investment came in December, plugging £12 million into electric vehicle charging company InstaVolt.

“The Green Hedge team has a very strong track record in project development, and has done a great job at de-risking the otherwise challenging business case of energy storage,” said Massimo Resta, a partner at Zouk Capital. “The power sector is changing rapidly due to the rapid growth of renewables and the decommissioning of traditional power generation assets. This creates opportunities for flexible assets such as batteries, and we believe we have the right team to take advantage of those opportunities.”

Zouk’s investment follows a deal agreed by infrastructure and private equity firm Foresight Group, which last month made its maiden energy storage transaction by purchasing a 35MW battery project in the UK from Renewable Energy Systems.