Blackstone’s Aypa secures US$550 million debt and tax equity for 700MWh California and Texas projects


Aypa Power has secured a portfolio debt and tax equity financing package totalling US$550 million for two battery energy storage system (BESS) projects in California and Texas.

Aypa, part of the world’s largest private equity firm Blackstone, secured the debt from First Citizens Bank & Trust Company, Nomura Securities International, Inc., National Bank of Canada and MUFG Bank, LTD. while U.S. Bancorp Impact Finance provided the tax equity investment.

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The money will go towards the Cald project, a 100MW/400MWh standalone system in urban Los Angeles, and the Borden County project, a 150MW/300MWh project in Texas. Both are currently under construction and set to enter commercial operation in 2024.

The projects are likely to be those for which Aypa ordered BESS systems from the energy storage arm of Canadian Solar earlier this year: a 487MWh order for an unnamed California project in February and a 363MWh order for an unnamed project in Texas. The larger size is most likely because of the need to overbuild a project to account for energy losses from DC to AC conversion at the inverter.

BESS projects in California are mostly 4-hour systems in order to get the maximum payment under the grid operator CAISO’s Resource Adequacy framework, the basis of the business case for grid-scale storage there. Aypa’s Cald project has secured an agreement under it with utility San Diego Gas & Electric (SDG&E).

In Texas, BESS still mainly get revenues from the state’s large ancillary services market and so have not moved significantly past 1 or 2-hour duration yet. However, the ancillary service market is pegged to start to saturate next year while recent state-of-charge regulations from grid operator ERCOT mean virtually all new projects are at least 2-hour systems.

Aypa has been owned by Blackstone since 2020, before which it was called NRSTOR C&I when it focused on the commercial and industrial (C&I) segment, though it has since pivoted to the utility-scale market. Alongside being active in the US’ two biggest markets for storage (California and Texas) this year it acquired BESS projects in Indiana.

The size of the tax equity portion of the financing package was not disclosed but it represents the latest in a string of large tax equity investments into standalone storage seen in the past few months, including from developer-operators Spearmint Energy, Plus PowerSMT Energy and SUSIStrata Clean Energy and Eolian (earlier in the year).

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