Foresight Solar Fund, a UK-based investment company with over a gigawatt of solar PV assets in its portfolio, has made its first move into the battery storage space.
The company has 748MW of ground-mounted solar in the UK, 146MW in Australia and 125MW in Spain and as of today has a market capitalisation of £586.61 million (US$815.62 million). Foresight Solar Fund has acquired 50-50 equity stakes of Sandridge Battery Storage Limited, which holds the development rights to the 50MW lithium-ion Sandridge Battery Storage project in Melksham, southwest England, together with renewable energy investment trust JLEN.
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Located adjacent to Sandridge solar park which is already owned by Foresight, Foresight's first battery storage project will share the distribution network point of connection with the solar park. It will be connected to distribution network operator (DNO) Southern Electric Power Distribution’s network and have a 49.9MW import and export connection.
A total investment of up to £12.7 million including construction costs will go into the asset, with this funding using Foresight’s existing revolving credit facilities alongside investment made by JLEN.
The battery system will operate in a number of markets, including frequency management – spanning both Dynamic Containment and other frequency services in the future – as well as supply/demand management via the Balancing Mechanism, volatility reduction and load-shifting through wholesale trading and provision of capacity for peak demand via Capacity Market.
Being fully consented and construction-ready, the battery storage system is expected to enter into commercial operation in October 2022.
Move into batteries offers increased scale, diversification and efficiencies as well as additional source of attractive investment returns
Alex Ohlsson, chairman of Foresight Solar Fund, said that diversification into battery storage will provide “increased scale, diversification and operating efficiencies alongside the company’s existing portfolio and should offer an additional source of attractive investment returns on a risk adjusted basis going forward”.
The company first announced plans to diverisfy into battery storage in January, a move approved by shareholders in February. It outlined how the majority of these storage assets – with up to 10% of the company’s Gross Asset Value available for investment in the technology – would be located adjacent to Foresight’s existing solar PV sites, although this is subject to available grid connection capacity and existing land lease agreements.
It comes as Foresight announces a £25 million extension of a revolving credit facility provided by NatWest, with this to mature on 31 March 2022. Following the extension, the company’s total revolving credit facilities will represent £130 million, of which £47 million remains undrawn.
The Sandridge battery storage asset marks the fourth investment into battery storage systems by JLEN, adding to the two co-located battery assets it owns as part of its run-of-river hydro portfolio and the standalone West Gourdie project in Scotland, which was acquired in March 2021.
This story first appeared on Solar Power Portal.