ESS player Broad Reach Power valued at US$600m+ as asset manager buys 50% stake

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A Broad Reach Power BESS project under construction in Texas. Image: Broad Reach Power.

Broad Reach Power has been valued at over US$600 million as a 50% stake in the US energy storage company changes hands.

Existing shareholders have agreed a deal to sell half of their interest in Broad Reach Power to Apollo Funds, which is managed by affiliates of alternative asset manager Apollo. 

Broad Reach Power was only founded in 2019, has more than 1.4GWh of energy storage under construction or in operation and owns a 21GW portfolio of storage, wind and solar projects in a number of US states. It uses a combination of energy storage technology and power market analytics to improve the performance of renewable energy and power generation facilities, the company claims. reported at the beginning of this month that Broad Reach brought online two 100MW / 100MWh battery storage projects in Texas’ ERCOT service area, among the biggest projects so far in the region’s growing energy storage market. The company had commissioned its first smaller projects in state about a year before — each of about 10MW — before rapidly moving on to the larger scale systems. 

Broad Reach recently contracted the energy storage arm of solar PV inverter company Sungrow for the supply of 1GW of battery storage equipment for six further projects in Texas, while it recently also placed a 118MWh battery storage order with SYL Battery for a project in California

EnCap Investments, a provider of capital to high growth independent energy companies, and co-investment partners Yorktown Capital and Mercuria Energy will retain the remaining 50% stake. A commitment has been made by the owners old and new to invest US$400 million in additional equity into the company.

The funding will be used to fuel Broad Reach Power’s expansion and its growth pipeline of projects. 

“Broad Reach has emerged as a disruptor in the dramatic transformation of the US electricity sector,” EnCap Energy Transition managing partner Shawn Cumberland said. 

“We believe this transaction both validates the value created by EnCap’s sponsorship of Broad Reach and allows us to continue to participate in its dominant position in the market.”

EnCap founded Broad Reach Power by creating a team of battery storage professionals with renewable energy developers. The transaction is EnCap’s first sale from its Energy Transition Fund I, which is worth a total US$1.2 billion. 

Apollo Funds also has a track record of investment in the new energy sector, including an US$820 million stake in a NextEra Energy Partners renewable energy portfolio and international investments and joint venture (JV) partnerships in areas including renewable energy royalties, utility-scale solar, wind and bioenergy. 

The transaction is expected to close by the end of this year, Apollo and EnCap Energy Transition Fund I said today.

“We view this as a significant vote of confidence in Broad Reach and our exciting growth prospects, as we continue to execute on our long-term goal to supply the nation with clean, reliable and affordable power,” Broad Reach Power CEO Steve Vavrik said. 

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