Swiss institutional investment group SUSI Partners has agreed to finance C$120 million (US$94.56 million) of commercial and industrial (C&I) sector energy storage projects by Canadian project developer/owner NRStor.
Toronto-headquartered NRStor completed one of Canada’s first large-scale grid-connected energy storage systems, a 2MW flywheel system using 10 separate Temporal Power flywheels, in 2014. That appears to be the only completed project in the company’s portfolio as listed on the NRStor website, but in late 2016, the company signed a deal with fellow Canadian company Hydrostor, which delivers advanced adiabatic compressed air energy storage (A-CAES) from underground caverns, to jointly develop utility-scale energy storage projects across Canada.
Meanwhile SUSI Partners’ SUSI Energy Storage Fund hit energy storage industry headlines when it provided third-party project financing for 12MW of Canadian energy storage projects with developer Convergent Energy and Power. At the time, Florian Mayr of consultancy Apricum, who advised on the deal, said the arrival of an institutional investor such as SUSI in the space spoke volumes about the promise of energy storage as a technology and economic opportunity.
“SUSI Partners has clearly realized the high potential of the energy storage market for its institutional investors seeking attractive risk-adjusted returns in a rapidly growing infrastructure asset class that also contributes to the mitigation of climate change,” Mayr said at the time.
The investment group has earmarked a total of €250 million (US$298.7 million) for investment in energy storage and related areas such as smart microgrids, which SUSI said will be open to investors until early next year. SUSI reached the first closing of a €66 million (US$70.4 million) fund in April, garnering investments from pension funds and other institutional investors. This was followed by a second closing of €110 million (US$130.9 million) in July.
'Large-scale repeatable financing'
SUSI Partners said last week that its US$120 million financing facility with NRStor will support projects featuring the “best-in-class lithium-ion technology” for behind-the-meter projects for C&I customers in Canada. The projects will help with peak demand management, balance the network and deal with intermittent or variable generation to aid the integration of renewable energy sources.
SUSI claimed NRStor’s C&I division has a growing portfolio of projects, with a potential 300MW pipeline of customer opportunities identified. Selected projects for SUSI’s financing will be proven to have stackable, multiple streams of revenues that deliver consistent cashflows to customers.
SUSI said the projects will likely utilise “a number of Tier 1” manufacturers of lithium-ion batteries. There will also be a diversity of applications and customer profiles, to give SUSI’s investment a broad and diversified portfolio profile.
“The facility is a great example of the rapidly increasing demand for energy storage projects and the changing energy infrastructure requirements due to the energy transition,” SUSI Partners chief investment officer and co-founder Otto von Troschke said.
“Following SUSI’s numerous energy efficiency transactions with C&I customers, we are excited to expand to this customer segment with energy storage projects.”
SUSI Partners managing director for energy storage Asif Rafique said the financing deal required the creation of a “standard set of agreements and templates” and was the first example in the sector of “large-scale repeatable financing”.
NRSTor has previous form in attracting institutional investors into the energy storage market. The company closed a deal in February of this year with the Labourers’ Pension Fund of Central and Eastern Canada (LiUNA). LiUNA committed an US$11 million equity financing committment as well as access to US$200 million of additional capital towards financing NRStor energy storage projects.
This article has been amended from its original form to reflect that SUSI Energy Storage Fund has held two successfully closed funding rounds.