The transaction includes the acquisition of the 150 MW Williams and 118 MW Fletcher projects, located in Indiana. The assets were acquired from Blue Steel Power, a JV between Open Road Renewables and Eolian. Aypa will take over all development responsibilities for the projects and will bring them into operation, with the help of a $320mn credit facility secured in Jan' 23.
Meanwhile, another US-based battery storage developer Available Power has partnered with Linxon, a JV between engineering firm SNC-Lavalin and Hitachi Energy, to develop 1 GW+ of battery energy storage systems (BESS) in the ERCOT market. Linxon has already secured the necessary equipment to deliver on the first tranche of the pipeline, enabling the partnership to bypass the supply chain bottlenecks that have challenged the growth of the US’s energy storage segment.
The recent expansion of solar and wind capacity in the US has widened the door for BESS to play a bigger role in grid management. ERCOT and MISO are two of the most active solar and wind development markets in the country, with ~15 GW and ~5 GW of projects scheduled to come online in 2023, respectively. The capacity expansion will require a proportionate scale-up of energy storage facilities to mitigate issues such as transmission bottlenecks, which are hindering renewables buildout in MISO, and recurring blackouts experienced by residents in ERCOT, due to extreme weather.
The demand for the accelerated expansion of BESS capacity has led to a doubling of M&A activity in the sector in 2022, compared to 2021 levels. Private equity firms (PE) and independent power producers (IPPs) have driven the deal volume, with major acquisitions during the year including BlackRock’s takeover of Jupiter Power and its 11.6 GW pipeline, and ENGIE’s acquisition of Belltown Power with 6 GW of solar-plus-storage development projects. Capital raised for BESS projects has also surged by 140% y/y in 2022 to more than $3bn, including Eolian’s $925mn debt raise from Santander, Natixis, and MUFG, and Goldman Sachs’s $250mn commitment to Hydrostor’s. Going forward, Enerdatics expects to continue seeing major increases in BESS-focussed M&A and financing activity, driven in part by the introduction of an investment tax credit (ITC) for standalone BESS projects under the Inflation Reduction Act.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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