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Neoen raises 2022 guidance, energy storage revenues nearly tripled year-on-year

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French independent power producer (IPP) Neoen has reported a 46% increase in revenues for the first nine months of 2022 versus the same period last year.

The company said revenues from its solar PV business were 20% higher from January to September this year, its wind revenues up 50% and its energy storage revenues have multiplied 2.7 times over compared to the same period of last year.

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In the opening nine months of 2021, Neoen netted €23.8 million (US$23.66 million) from energy storage and €65.4 million this year. Solar revenues went up from €123 million to €147.5 million and wind from €94.3 million to €141.1 million.

In reporting its latest quarterly figures, Neoen said its nine-month unaudited revenue total was €354.6 million, a 46% increase on the 2021 equivalent period. It has also beaten 2021’s full-year total of €333.6 million. Q3 2022 revenues were also 68% higher than Q3 2021’s.

The company is revising its EBITDA target range up from a previously offered €380 million to €400 million to between €390 million and €410 million.

Earlier in the year, Neoen had said that the strong revenue uplift in its energy storage segment had been largely driven by the Victorian Big Battery (VBB), at 300MW/450MWh the largest battery energy storage system (BESS) in Australia.

The VBB participates in merchant opportunities in the National Electricity Market (NEM) frequency control ancillary services (FCAS) markets, as well as performing energy arbitrage. It also has a long-term contract in place to provide capacity reserve to the grid under the Australian Energy Market Operator’s (AEMO’s) System Integrity Protection Scheme (SIPS).

The BESS was commissioned in December 2021 and since then, it earned a significant chunk of its Q1 revenue from its capacity reserve contract as it helped open up capacity on interconnectors between Victoria and New South Wales in summer peaks. Then in Q2 and Q3, as Australian energy pricing remained volatile, FCAS and arbitrage contributed a bigger share of revenues.

Neoen also pointed to positive performance from its Hornsdale Power Reserve BESS in South Australia and another large-scale BESS project in Finland. Energy storage revenues for the quarter were 26 million, again a significant increase on 10.5 million for Q3 2021, while the company noted that in the nine-month period, storage accounted for 18% of total revenues, as opposed to 10% in 9M 2021.

However, at the moment, of 2GW of clean energy projects Neoen is constructing around the world, only a relatively small portion is new BESS capacity. The 100MW/200MWh Capital Battery near Canberra, Australia, is the biggest.

As it stands, 12% of Neoen’s 5.6GW total capacity in construction or operation is battery storage, versus 49% solar and 39% wind. During 2021 it commissioned 898MW total wind, solar and storage capacity, of which 300MW was the Victorian Big Battery, its only completed BESS project in the year.

This year so far it has only completed 12MW of BESS at two equally sized projects in El Salvador, with the Capital Battery scheduled for completion next year.

Australia continues to be an important energy storage market for Neoen – last week the company announced a deal with mining and resources company BHP to supply 70MW of renewable energy to BHP’s Olympic Dam copper, gold, and uranium extraction site.

Energy from Neoen’s Goyder South Stage 1 wind farm project in South Australia will be supplied as “baseload” energy, firmed up using Neoen’s planned 300MW Blyth Battery project nearby. It should be sufficient to meet 50% of the Olympic Dam facilities from July 2025 and planning approval for the battery storage system was given in April.

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