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ENGIE acquires Broad Reach Power BESS business for ‘over US$1 billion equity value’

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French multinational utility ENGIE has agreed to acquire the battery storage business of US developer Broad Reach Power.

In a transaction said to be worth in excess of US$1 billion equity value, Broad Reach Power’s current owner EnCap Energy Transition and co-investors will sell on the developer’s pipeline, as well as projects in operation or under construction in US markets including CAISO in California and ERCOT in Texas.

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It will however not include a 1.8GW portfolio of solar and wind projects. It also excludes a total of 4GWh of in-development battery energy storage system (BESS) assets in three of the US’ Mountain West region states, Wyoming, Utah and Montana, which have planned commercial operation start dates ranging from later this year to Q4 2026.

Broad Reach Power closed US$435 million financing this summer on 880MW of assets in Texas and California with commissioning dates in 2023 and 2024, as reported by Energy-Storage.news a few weeks ago.

That portfolio represents the total of the construction-stage projects ENGIE will be acquiring, and the vast majority of them, 825MW, are in ERCOT. That is in addition to 350MW of operational BESS, while the claimed development pipeline of 1.7GW are a mix of advanced and early stage projects, EnCap said in a release.

Much like the US battery storage markets it is active in, Broach Reach Power has enjoyed rapid growth and in July 2022 raised US$160 million financing for its portfolio of operational assets. That made the developer one of three US energy storage-focused companies Energy-Storage.news reported to have raised in excess of US$100 million funding within a few weeks of each other, the others being technology providers and system integrators Powin Energy (US$135 million) and FlexGen (US$100 million).

Broad Reach Power’s owners alongside EnCap Energy Transition, a fund of EnCap Investments, which seeks investments in high-growth potential independent energy companies, include Apollo Funds, which bought a 50% stake in the developer in 2021, and fellow investors Yorktown and Mercuria.

Towards the end of last year, EnCap also sold on Jupiter Power, another US developer with a focus in the BESS market leaning heavily towards owning and operating assets in ERCOT. Jupiter Power was sold to asset management group BlackRock. Jupiter Power has more than 655MWh of operational projects, and recently raised US$70 million funding towards another 320MWh of ERCOT projects.

ENGIE advancing interest in BESS

For ENGIE’s part, the move for the Broad Reach Power BESS business appears to mark a continued play for further market share in the US storage market. In October last year the French company acquired a 6GW portfolio of early to late stage solar, hybrid solar-plus-storage and standalone energy storage projects from developer Belltown Power, including 0.7GW of solar-plus-storage and 2.6GW of standalone BESS.     

Globally, the utility group also has a battery asset management business, which appears to be relatively small or early stage at the moment, with 170MW of BESS assets under management listed on its website including commercial and industrial (C&I) installations.

It also used to have a global system integrator arm, ENGIE EPS, which it acquired in 2018. However it sold on that business to Taiwan Cement Corporation (TCC) in 2021, with the new owner subsequently rebranding it New HOrizons Ahea (NHOA).

NHOA is also active in EV smart charging infrastructure, but has said BESS is the main growth engine of its business. Relations between NHOA and ENGIE post-acquisition have not always been smooth sailing: in 2021, ENGIE dropped a solar-plus-storage project in Hawaii, despite contracts being in place with utility Hawaiian Electric Co (HECO).

The following year ENGIE also dropped a solar-plus-storage project in Guam that it had won a 2019 tender to build. NHOA had been contracted to supply both, with the Guam project including 300MWh of BESS and the Hawaii project 240MWh. In both instances ENGIE referred to project-related costs having risen since the time of contract awards through competitive solicitations.   

ENGIE remains active in the energy storage space outside the US, having submitted permit applications in April for three projects in Belgium totalling 380MW, while its subsidiaries in Latin America are working on hybrid or standalone BESS projects in Colombia and Chile, where it recently got a US$400 million loan agreement from the World Bank’s International Finance Corporation for an unspecified capacity of BESS.

Our publisher Solar Media is hosting the 10th Solar and Storage Finance USA conference, 7-8 November 2023 at the New Yorker Hotel, New York. Topics ranging from the Inflation Reduction Act to optimising asset revenues, the financing landscape in 2023 and much more will be discussed. See the official site for more details.

22 October 2024
New York, USA
Returning for its 11th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.

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