UK battery energy storage acquisitions heating up

About 550 MW of battery energy storage systems (BESS) deals have been signed in the United Kingdom over the past few days. Most recently, Masdar acquired London-based storage developer Arlington Energy.

As an island with weaker interconnections than much of continental Europe, the United Kingdom needs the grid stabilization services offered by BESS. Utility-scale projects have proliferated in recent years and the services that big batteries can provide in this deregulated market are also expanding.

In another busy week for the UK battery energy storage sector, NextEnergy Solar Fund (NESF) said it has acquired a “strategic portfolio” of battery storage projects located in eastern England. The solar PV and fund said that it has acquired the 250 MW/500 MWh portfolio from an undisclosed developer for about GBP 32.5 million ($37.4 million).

According to NESF, the project has secured planning permission and grid-connection rights. It will likely be switched on in 2025. It will provide grid-balancing services in a part of the grid that is often flooded by wind energy.

At a nearby location, London-based asset manager Gore Street Energy recently acquired a 200 MW construction-ready BESS from Kona Energy. The project located in Heysham, in northwestern England, will help to stabilize energy influx from nearby offshore wind farms, while also providing reactive power and inertia services to support the local grid.

It will likely be connected to National Grid’s main transmission network by the fourth quarter of 2026. The move marks the listed investment fund’s largest project acquisition to date, bringing its total portfolio of contracted or operational BESS assets to 898 MW.

Spanish developer Fotowatio Renewable Ventures (FRV), meanwhile, has acquired two BESS projects with a combined capacity of 100 MW from RE Projects Development Ltd. It said the two 50 MW lithium-ion battery projects are located in the Midlands and are scheduled to enter the ready-to-build phase in the third quarter of 2023.

Tyler Hill Renewables, which sourced the acquisition opportunity for FRV, is helping with the development process. In October, FRV and Tyler Hill Renewables launched a platform to develop, build and operate up to 1GW/2GWh of battery energy storage system projects in the United Kingdom over the next five years for GBP 1 billion. FRV currently has five UK battery energy storage projects in operation, under construction, and in development, totaling 340 MW.

More recently, Masdar – a state-owned renewables developer in the United Arab Emirates – acquired London-based BESS developer Arlington Energy. The Abu Dhabi-headquartered company said the acquisition “will enable [it] to expand its presence in the UK and European renewable energy markets.”

Arlington Energy claims to “have a proven record in developing, building, operating and financing flexible energy solutions,” with more than 170 MW of assets under its belt. With Masdar’s backing, the London-based company says it will accelerate its BESS rollout in the United Kingdom.

The United Kingdom might need as much as 50 GW of storage capacity by 2050, in order to achieve its target of net-zero carbon emissions, according to the National Grid.

RenewableUK figures from April show that the total pipeline of battery projects in the country has doubled from 16.1 GW a year ago to 32.1 GW at present. Operational battery storage project capacity grew by 45%, from 1.1 GW to 1.6 GW, and the capacity of projects under construction has more than doubled to 1.4 GW. An additional 10.4 GW has been approved, while 7.7 GW has been submitted in the planning system.

This post appeared first on PV Magazine.

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