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Texas: ITC-aided 200MW merchant project comes online, CATL in 5GWh supply deal

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The US state of Texas continues to be a hotbed for energy storage activity, as CATL announces a major supply deal and the country’s first battery storage project to get ITC incentives comes online.

Just a few weeks ago, developer Eolian claimed the first project to avail of the newly-introduced investment tax credit (ITC) for standalone energy storage through tax equity financing.

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Eolian’s 200MW/429MWh pair of interconnected battery energy storage system (BESS) assets in the Texas city of Mission was also claimed to be the largest fully merchant BESS project in the world. Tax equity investment came from a fund managed by Churchill Stateside Group.

The projects had begun construction in January 2021. Wärtsilä, the BESS technology provider and system integrator selected by Eolian, said earlier this week that the commercial operation date (COD) has been reached for the twin projects, called Ignacio and Madero, each of 100MW output.

The two companies had to work through an “exceptionally difficult period” to carry out the project installation and commissioning due to the COVID-19 pandemic and global supply chain issues, Wärtsilä said.

“Texas needs more flexible capacity solutions like energy storage for grid support and energy resource optimisation,” Wärtsilä’s VP of Americas Risto Paldanius said.

“This will help the state as it faces the natural replacement cycle of older inflexible generators and adapts to more frequent extreme weather events.”

Eolian invested “hundreds of millions of dollars” to construct the Madero and Ignacio BESS assets even during a time when the ERCOT market is undergoing a redesign, Eolian CEO Aaron Zubaty said.

“We did this because of an unwavering belief that the highly flexible and instantly-dispatchable multi-hour resources at this site will do the hard daily work of fast-ramping and quick starts, allowing ageing, inflexible and increasingly fragile generators to remain available to the system in backup roles.”

As with other Wärtsilä BESS projects, the Texas duo uses the company’s GridSolv Quantum integrated modular BESS solution, and onboarded with the Wärtsilä GEMS Digital Energy Platform, the company’s energy management system (EMS). The latter is key to the assets being able to deliver ancillary services effectively to the ERCOT grid, and the Eolian systems are the first in ERCOT to qualify to deliver new fast frequency response services.

As noted in a recent news story on Energy-Storage.news, the ITC’s requirement for tax equity financing means transactions and financing structures required to avail of the incentives will be complex and expensive to negotiate. Despite that caveat meaning the big players with deep pockets might be best placed to benefit from it, the ITC is however widely expected to boost the business case for energy storage projects across the US.

CATL signs 450MWh Texas deal rising to 5GWh

CATL has signed a supply deal with energy storage project developer HGP Storage for projects in Texas, starting with a single 450MWh site.

The two companies announced their deal on Monday (27 March), with the Chinese battery maker – the world’s largest lithium battery manufacturer – set to supply its EnerC containerised liquid cooled BESS solution to the developer.

Dallas-headquartered HGP is relatively new to the battery storage space but its leadership has a track record of delivering energy and infrastructure projects including thermal backup generation and currently has a claimed 1GW/1.4GWh pipeline of distributed and utility-scale battery projects in Texas.

No further details of the 450MWh project were given in a release, although the companies did say it will begin commercial operations in 2024. Beyond that, CATL and HGP have entered into a “long-term partnership to facilitate up to 5GWh” of BESS in the state, including distributed and utility-scale projects.

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