Battery Storage Joint Venture & First Acquisition
17 September 2021
NextEnergy Solar Fund Limited
("NESF" or the "Company")
250MW Battery Storage Joint Venture with First Acquisition Signed
NextEnergy Solar Fund, the specialist solar power renewable energy investment company, is very pleased to announce its first strategic step into the energy storage sector in the United Kingdom. NESF has entered into a £100m Joint Venture Partnership ("JVP") with Eelpower Limited ("Eelpower"), a leading battery storage specialist in the UK. The JVP is targeting the establishment of up to 250MW in projects with £100m in invested capital and has already signed its first acquisition of a 50MW standalone battery storage project.
The Company's addition of energy storage assets to its well-diversified portfolio of 99 operating solar assets comes as a result of its expanded investment mandate approved by shareholders in September 2020. The approval allows up to 10% of NESF's Gross Asset Value to be invested into standalone energy storage systems.
The JVP, owned 70% by NESF and 30% by Eelpower, is of strategic importance to NESF as it includes a framework for the acquisition of up to 250MW (including this initial 50MW project) of battery storage assets. As part of this, NESF continues to pursue a high-quality pipeline of battery energy storage opportunities in the UK, bringing together expertise in renewables investment with the demonstrated abilities of Eelpower in energy storage to deliver a strong pipeline of high-quality assets generating complementary revenues to our existing solar portfolio.
Battery storage forms a significant part of NESF's growth and diversification strategy, and will be a key enabler to the further market deployment of solar assets in the UK. It will contribute to the UK Government's drive to Net Zero by reducing the UK's need for carbon emitting energy sources whilst contributing to tackling climate change.
The maiden 50MW project is a ready-to-build, standalone battery, located in Fife, Scotland, which will provide additional stability to the grid via its export capacity. It is expected to be energised and grid-connected in 2022.
Once operational the project presents NESF with multiple attractive revenue opportunities which include:
· Arbitrage Energy Trading, providing vital balancing capability for the national and local grid while trading in the £14bn UK electricity market
· The Capacity Market, the UK policy mechanism from which storage assets derive longer term revenues, based on the availability to dispatch electricity during periods of system volatility
· Ancillary Services (including Firm Frequency Response and Dynamic Containment) providing sub-second increases or decreases in power output from the battery to maintain stability of grid frequency
Eelpower is a specialist in the UK battery market with a strong track record and extensive experience in the delivery, management, and optimisation of battery storage assets in the UK. Eelpower will provide EPC and ongoing specialist asset management services to the storage assets and will source further acquisition opportunities for the JVP.
A briefing for analysts will be held at 11am this morning via a conference call facility and an audio webcast will be available on NESF's website later in the day. For further information regarding this call please reach out to [email protected].
Kevin Lyon, Chairman of NextEnergy Solar Fund said:
"The board and I are delighted to announce NESF's significant move into energy storage, forming an important part of NESF's future growth plans. The joint venture lays the foundations and provides momentum for NESF's pipeline of energy storage assets whilst also ensuring collaboration with a specialist partner, Eelpower, in operating these assets. NESF is now demonstrably progressing its exciting growth strategy both in UK energy storage and international expansion of its portfolio of solar projects."
Ross Grier, UK Managing Director of NextEnergy Capital, added:
"This is an exciting deal and opportunity for NESF as we introduce the first standalone utility scale battery project to the fund. We have been involved in the energy storage space for several years, having acquired two small-scale batteries back in 2017. It is encouraging to see that battery technology is now at a stage where it is feasible to introduce projects like this to the NESF portfolio. We are looking forward to securing further investment opportunities in this sub-sector alongside our partner Eelpower."
Mark Simon, CEO of Eelpower, said:
"Eelpower was founded to promote the transition to renewable energy sustainable, through the creation of a platform of grid-scale electricity storage assets. Since 2015, the Eelpower team has defined and developed this sector and is delighted to partner with NESF to lead the next stage of the UK's energy transition."
For further information:
NextEnergy Capital Group
020 3746 0700
Peter Hamid (Investor Relations)
020 7397 8900
020 7408 4090
Fiona Conroy - Corporate Broking
020 3781 8334
Apex Fund and Corporate Services (Guernsey) Limited
01481 735 827
Notes to Editors1:
About NextEnergy Solar Fund
NESF is a specialist solar power renewable energy investment company listed on the premium segment of the London Stock Exchange that invests in operating utility-scale solar power plants. The Company may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private equity structures, and 10% in energy storage.
NESF currently has a diversified portfolio comprising 99 operating solar assets (primarily on agricultural, industrial, and commercial sites), and a $50m commitment into NextPower III (a private ESG solar infrastructure fund providing exposure to operating and in-development international solar assets).
The NESF portfolio has a combined installed power capacity of 893MW (including NextPower III MW on an equivalent look-through basis).
As at 30 June 2021, the Company had gross assets of £1,058 million and net assets of £580 million. The majority of long-term cash flows from its investments are inflation-linked.
NESF's investment objective is to provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of primarily UK-based solar energy infrastructure assets.
For further information on NESF please visit nextenergysolarfund.com
Commitment to ESG
NESF is committed to ESG principles and responsible investment which make a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF will only select investments that meet the requirements of NEC Group's Sustainable Investment Policy. Based on this policy, NESF benefits from NEC's rigorous ESG due diligence on each investment. NESF is committed to reporting on its ESG performance in accordance with the UN Sustainable Development Goals framework and the EU Sustainable Finance Disclosure Regulation.
NESF has been awarded the London Stock Exchange's Green Economy Mark and has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission.
NESF's sustainability-related disclosures in the financial services sector in accordance with Regulation (EU) 2019/2088 can be accessed on the ESG section of both the NESF website (nextenergysolarfund.com/esg/) & NEC Group website (nextenergycapital.com/sustainability/transparency-and-reporting/).
About NextEnergy Capital Group ("NEC Group")
NESF is managed by the NextEnergy Capital Group, a specialist solar investment manager, which has a strong track record in sourcing, acquiring, and managing operating solar assets. NEC Group is a leading player in the global solar investment sector and has over 190 team members with offices in UK, Italy, India, and the USA and assets under management of over $2.8bn across three institutional funds.
NextEnergy Capital Group donates at least 5% of its net annual profits to NextEnergy Foundation. NextEnergy Foundation is an international charity that was founded in 2016. Its mission is to participate proactively in the global effort to reduce carbon emissions, provide clean power sources in regions where they are not yet available, and contribute to poverty alleviation.
For further information on NEC Group please visit nextenergycapital.com
For further information on NextEnergy Foundation visit nextenergyfoundation.org
Eelpower Limited ("Eelpower") is a well-established privately held constructor-owner-operator in the new and rapidly growing electricity storage market. Eelpower's management team and investors previously built the largest hydropower sites in England this century where they pioneered behind-the-meter battery storage integrated with hydro generation and industrial consumers. Since its launch in 2017, Eelpower has delivered, owned, and managed some of the highest-earning storage assets in the UK.
For further information on Eelpower please visit eelpower.co.uk.
 Note: All financial data is as at 30 June 2021, being the latest date in respect of which NESF has published financial information