VLC Energy has sold two operational battery storage facilities totalling 50MW to Gresham House Energy Storage Fund for £29.2 million. VLC Energy is a joint venture between Low Carbon and VPI Immingham (a subsidiary of Vitol Group).
The facilities comprise a 40MW facility at Glassenbury, Kent, and a 10MW facility at Cleator Moor, Cumbria, that were commissioned in January 2018. Their combined 50MW capacity represents a quarter of National Grid’s 2016 Enhanced Frequency Response (EFR) capacity.
The acquisition increases the total capacity of operational utility-scale battery storage projects in the Energy Storage Fund’s portfolio to 125MW, which will reach 174MW when acquisition of a 49MW project, at the Red Scar Business Park, is included. The Red Scar facility is currently undergoing commissioning, with the acquisition expected to complete in the near future.
Both Glassenbury and Cleator have EFR contracts to January 2022 awarded following National Grid’s 2016 EFR auction and provide sub-second responses to frequency deviations on the national grid. They also have 15-year 2016 Capacity Market contracts. The facilities are backed by 30-year site leases (c.28 years remaining). The Glassenbury facility is said to be well-sited to offer reactive power services.
The Fund also expects to acquire a further three projects; two of 50MW each and the Littlebrook extension of 5MW in the coming months, once they are commissioned and operational. This will see the Fund’s total operational portfolio increase to c.279MW. It is currently possible that commencement of operations of the two larger projects slips into early Q2 2020 if winter conditions prove unaccommodating to a smooth construction process.
John Leggate, chair of Gresham House Energy Storage said: “We are delighted to follow our successful £41.6million fundraise in October with the acquisition of these operational facilities from VLC Energy. We are pleased with progress since our IPO 13 months ago, and this marks the third acquisition since the Seed Assets were purchased at IPO.”
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