US developer Broad Reach Power has closed US$435 million in financing to start construction on 880MW of battery storage projects in the CAISO and ERCOT markets, for 2023/24 commissioning.
The developer announced the financing from a large consortium last week (28 July), which will enable it to start construction on the seven standalone battery energy storage system (BESS) projects.
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825MW of the portfolio is in the ERCOT, Texas market, while the remaining 55MW is in California, where CAISO runs the grid. California is currently the largest US BESS market with over 5.6GW online although Texas is seeing massive deployments this year and may reach 8GW by the end of 2023.
Projects in CAISO are capitalising on long-term revenue opportunities providing energy to utilities through CAISO’s Resource Adequacy framework, while those in ERCOT mainly derive revenues from ancillary services and energy trading, with ERCOT being the more wind-heavy market and California predominantly solar.
The financed BESS projects have expected commercial operation dates (COD) ranging from late 2023 through to the first quarter of 2024. Although their energy storage capacity (MWh) wasn’t revealed in the announcement, CAISO projects are typically 4-hour systems while the market standard in ERCOT is 2-hours.
The financing was led by Deutsch Bank AG, New York Branch, while Coordinating Lead Arrangers and Co-Syndication Agents alongside it were were MUFG Bank Ltd and Norddeutsche Landesbank Girozentrale, New York Branch. The Joint Lead Arranger was First-Citizens Bank & Trust Company with Depositary Bank, Collateral and Administrative Agent Deutsche Bank Trust Company Americas.
Stacey Peterson, CEO of Broad Reach said: “Broad Reach Power is proud to be on the forefront of financing this new asset class, highlighting our portfolio of projects that have been meticulously developed by the team over the last several years as well as the confidence in our team’s ability to construct and operate quality BESS projects.”
“We look forward to constructing the rest of our development portfolio economically, allowing further renewables integration and providing relief to the country’s often strained transmission systems.”
The ERCOT market has accelerated at a dizzying pace in the last few years, but Broad Reach Power was among the early movers bringing large-scale projects online in 2021, as reported by Energy-Storage.news at the time. As of the start of this year, it was the second-largest operator of BESS projects in the ERCOT market with 349MW online, second to Jupiter Power’s 432MW (figures from market intelligence platform Modo Energy).
Broad Reach is owned by investors EnCap Investments, Apollo Global Management, Yorktown Partners and Mercuria Energy.