Swiss investor enters PJM frequency regulation market with Leclanché

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Leclanché batteries at a Younicos project on the Portugese island of Graciosa. Image: Younicos.
Swiss Green Electricity Management Group (SGEM), an investor in energy storage projects, has announced a 20MW / 10MWh battery storage system for PJM Interconnection’s frequency regulation market, to be supplied and built by Leclanché.

The first project in Lausanne-headquartered SGEM’s portfolio will be constructed in Marengo, Illinois. Leclanché will act as engineering, procurement and construction (EPC) partner as well as supplying the battery storage system for the project, while Glidepath Power, which has participated in other PJM region projects including Renewable Energy Systems’ (REC’s) twin Jake and Elwood systems, acted as developer.

PJM Interconnection’s transmission network spans several US states and has rigorously implemented a “pay-for-performance” market design that rewards battery storage’s ability to respond to grid signals quickly and accurately. As much as 263MW / 148MWh of battery storage was installed in the regional transmission operator’s (RTO’s) service area by the beginning of 2016.

The latest project will be connected to the local Commonwealth Edison Company (ComEd) grid, providing PJM with real-time frequency regulation, which helps boost reliability of supply and keeps costs low for consumers, especially as variable renewable energy rises as a proportion of the energy mix.

100MWh portfolio target with ‘triple-bottom line’

In a statement this morning, SGEM said it was seeking to offer investors “triple-bottom line profits: economical, social and environmental”. SGEM invests in a build-own-operate model, providing equity capital, leading project financing and supervising construction and operation of storage assets.

“As a private investor we are driven by energy storage as an enabler to stabilise ageing transmission & distribution electricity infrastructure, to grow distributed energy generation (DEG) and to reduce emission generating assets in energy mix,” the statement said.

SGEM is targeting a portfolio of 100MWh of energy storage, for grid ancillary services such as the Marengo project, for renewable energy integration and for microgrids, although the company did not offer a timeframe by which it intends to invest in these assets or the likely geographical spread.

Leclanché and SGEM signed a “preferred partnership” agreement in August this year, and the Marengo project is the first to arise from the deal. This partnership gives SGEM right of first offer for Leclanché projects, which in 2017 will represent over 85MWh.  

“This will be our first participation in the well-structured and dynamic PJM energy storage market, and the Marengo Project offers SGEM investors the opportunity to provide a long-term commitment to this fast-growing infrastructure asset class,” said SGEM chairman Antoine Spillmann, who is also CEO and executive partner at another Swiss company, Bruellan Wealth Management.

“The formation of SGEM and its acquisition of projects sends a strong signal that international investors are recognizing the tremendous potential of this exciting new infrastructure asset class.

The pipeline of similar projects will continue to generate a high-growth demand in North America,” Leclanché CEO Anil Srivastava said.  

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