US battery storage developer Key Capture Energy (KCE) has closed a US$300 million financing agreement with British multinational bank Standard Chartered.
KCE, which develops battery energy storage system (BESS) projects to own and operate long-term under an independent power producer (IPP) business model, announced the letter of credit facility and its closing on Tuesday (18 August).
The financing will support KCE’s project development pipeline, with the developer’s near-term focus on the New York Independent System Operator (NY-ISO) and the Midcontinent Independent System Operator (MISO) markets.
Key Capture Energy CFO Seungyong Oh said the credit facility will support the company’s ability to advance projects through the development process. Standard Chartered is the facility’s sole provider and arranger.
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While the bulk of KCE’s 623MW operating portfolio is concentrated in Texas, where it has 580MW of assets in the ERCOT market, NY-ISO, where it was an early mover, and MISO, which the company has been enthusiastically talking up for some time, are also known focuses.
For example, the developer, headquartered in Albany, upstate New York, was the first to put a grid-scale BESS into commercial operation in the state in 2019. As regular readers will know, various factors have proved a barrier to many other such assets getting over the line in New York, not least of all a market design that does not capture electricity price volatility as ERCOT does.
However, the Bulk Energy Storage Program, a new large-scale BESS procurement programme, is underway via the New York State Energy Research and Development Authority (NYSERDA), and the state government is hopeful that it will put a dent in the 6GW by 2030 energy storage procurement target put into legislation by Governor Kathy Hochul. Energy-Storage.news has heard that Key Capture Energy submitted projects to the programme that will use a revenue-underwriting formula called the Index Storage Credit Mechanism to derive a strike price for wholesale power sales.
In MISO, which covers all or part of 15 US states and the Canadian province of Manitoba, former KCE CEO Jeff Bishop told Energy-Storage.news back in 2021 that the ISO was a blank slate with big potential for storage adoption.
Bishop was then among the first industry voices to commend Michigan’s Governor Gretchen Whitmer in 2023 for implementing a storage target (ESN Premium) for her state, the first in MISO and the broader US Midwest region to do so.
KCE’s interest in MISO aligned with a broader company strategy of seeking out ISO and RTO markets with an emerging need for energy storage but little development, thereby securing a position in those markets.
The strategy has continued into the leadership of Bishop’s successor, Brian Hayes, who discussed KCE’s then-9GW pipeline with ESN Premium shortly after taking up the role in 2024.
In a follow-up conversation last year, Hayes said that KCE was “starting to see lots of action in MISO,” particularly in Michigan, Indiana and Illinois. Since then, the dual trends of electrification and data centre development have driven upward revisions to US electricity demand forecasts.
“We’re starting to see much more positivity in MISO, and I think it’s really around the data centres and the AI. They’re coming to that area of the country, and so as a result, they’re figuring out that storage is a good way to shorten the time to power,” Hayes said.
First publicly announced financing for KCE since owner SK was reported to be considering sale
The financing is also of interest from a business perspective, given that KCE’s owner, South Korean technology conglomerate SK Group’s energy division SK Innovation E&S, said in spring this year that it was “exploring strategic options” to bring in a financial partner for the developer it acquired in 2021.
This followed media reports in April that claimed SK Group, which has the battery manufacturer SK On among its subsidiaries, was seeking a buyer for Key Capture Energy.
SK Innovation E&S’s US investment arm, PassKey, said in a statement in response to those reports that the owner was “committed to Key Capture Energy’s success as we expand battery energy storage to strengthen grid reliability and resilience.”
The need for financing as Key Capture Energy transitions from developer to owner-operator IPP with recurring revenues from long-term contracts, may be driven by several factors, as speculated in an ESN Premium analysis at the time.
These included revenue compression in ERCOT impacting its existing asset base, the cost of developing projects in newer territories, KCE’s strategy of investing R&D spend in in-house route-to-market (RTM) software optimisation and external factors such as policy changes and increasingly long lead times for permits, grid connections and high-voltage equipment orders, such as transformers.
Key Capture Energy senior performance engineer Shany Kapadia will be among the speakers at Battery Asset Management Summit USA 2026, which will be held 15-16 September in Garden Grove, California, hosted by Energy-Storage.news publisher Solar Media (part of the Informa Group). This year, the conference is also co-located with Solar & Storage Finance Summit USA. Visit the official site for more details.
