Swiss fund manager SUSI acquires 100MW Texas BESS development portfolio

SMT Energy CEO and founder John Switzer said his company was able to take the projects from ideation to shovel-ready status in just over a year. The pair will own and operate the portfolio in South Texas, which will play into the Electricity Reliability Council of Texas (ERCOT) wholesale power market on a merchant basis.

“The vision was to own and operate a fully merchant, front-of-the-meter energy storage portfolio in Texas, and it took the right partner to appreciate our concept,” Switzer said.

Texas and in particular the ERCOT service area which covers about 80% of the state, has become a hotbed for battery storage development.

That’s a consequence of various conditions, including the open competitive structure of the wholesale market, the growth of solar and wind requiring more storage to mitigate their variable generation profiles and latterly the lack of planning margins leading to projected shortfalls in electricity supply at critical times such as summer peaks and unexpected winter storms.

Starting just a couple of years ago, various developers began planting their flags in ERCOT territory with smaller projects of up to 10MW, with projects of 9.9MW or lower benefitting from a quicker regulatory approval process. But as developers gain more experience and prove out the economic case with those projects, they have tended to move onto bigger systems. It will be interesting if the SUSI-SMT partnership is at the early stages of such a play.

The projects in the portfolio are targeted for commissioning in the first half of 2023.

In a Guest Blog for this site last month, the CEO and founder of a new developer wrote about the compelling social, environmental, technical and economic dimensions to drivers for battery storage in Texas.

“[Texas] could see unsafe decreases in solar power of over 20,000MW or 30% of total supply during sunset if its solar queue is fully built out. This evolution, combined with thermal retirements, current and potential increasing regional carbon prices, and incredible load growth, add significant uncertainty and volatility to the markets,” Spearmint Energy founder and CEO Andrew Waranch wrote, just a couple of weeks before his company announced the acquisition of its first, 150MW, project in the state.

Texas is currently one of the two leading states for US energy storage deployment, together with California.

Meanwhile, SUSI Partners has a track record of investments in projects and technologies across the clean energy transition spectrum.

It is also noted for its involvement in the energy storage sector, having acquired a 340MWh behind-the-meter battery portfolio in Los Angeles, California, in 2019, invested in various large-scale commercial and industrial (C&I) battery projects in Ontario, Canada prior to that, and also formed a joint venture (JV) with UK developer Eelpower to build out a 1GW project pipeline in that country’s utility-scale battery storage market. That JV recently acquired a 150MW UK development portfolio.

SUSI Partners said that the SMT deal is its second in the US battery storage market after the California transaction, as well as being the first investment for SETF, a new energy transition fund it has launched. SUSI Partners manages funds with around €1.7 billion (US$1.73 billion) commitments from institutional investors.

“Having successfully finalised the deployment of our dedicated energy storage fund last year, this investment through our equity energy transition fund continues our commitment to battery storage as an important enabler of renewables integration,” SUSI Partners head of equity investments Richard Braakenburg said.