Smart Energy Finances: UK Infrastructure Bank marks first energy storage investment

Smart Energy Finances: UK Infrastructure Bank marks first energy storage investment
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The UK Infrastructure Bank’s first investment into energy storage systems, considered a high priority for the UK Government and a key component of their push towards a net zero carbon economy, leads this week’s Smart Energy Finances column.

Also on the radar is Enel’s consideration of a storage sale to alleviate its net debt, a smart metering tender in Uruguay and closure of a major smart metering deal by Queensland Investment Corporation (QIC).

UK Infrastructure Bank’s storage fund investments

Energy services and solutions company Centrica and British state-owned UK Infrastructure Bank are investing £265 million ($329.8 million) in energy storage in the UK, marking the bank’s first investment into such technology.

The Bank will invest £75 million ($93 million) on a match funding basis into the Gresham House Secure Income Renewable Energy & Storage LP (SIRES) alongside a £65 million ($80.9 million) investment from Centrica.

These investments are alongside a stated commitment from UK infrastructure Bank to invest £125 million ($155.6 million) on a match-funding basis into Equitix UK Electricity Storage Fund.

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Project breakdown of the funding includes:

  • Supporting launch of the SIRES fund, which will focus on developing the collocation of renewable generation and short duration electricity storage facilities to help maximise grid connections.

    Centrica will be a cornerstone investor, marking the first time the business has invested in such a fund.

    The £65 million investment will be used to fund the construction of the seed asset, a collocated solar and battery energy storage project in Hartlepool, County Durham, with 50 MWp solar capacity and 75MWh of battery energy storage.

    Centrica’s Energy Marketing & Trading business will seek to provide a route-to-market for the assets in the fund once they become operational.
  • Supporting launch of the Equitix UK Electricity Storage Fund through the Bank’s committed £125 million investment.

    The fund will focus on a combination of innovative business models across both short and long duration storage.

    The Bank has cited its infrastructure specialist asset management experience and asset portfolio across the UK electricity value-chain as providing them with the necessary insights for these types of investments.

The deals, which represent the Bank’s first investments in the electricity storage sector, are hoped to unlock a further £200 million ($248.9 million) in match-funded private sector capital.

John Flint, CEO of UK Infrastructure Bank said: “The Bank’s investment into these new funds will help break down the barriers to greater, long-term investment across a range of storage sector and renewable energy opportunities.”

According to the International Trade Administration, more than 16.1GW of battery storage capacity is operating, under construction or in the pipeline across 729 projects in the UK.

The technology is considered high priority for the UK Government and a key component of their push towards a net zero carbon economy.  

Enel mulls storage sale

Enel SpA is evaluating the sale of a majority stake in its energy storage business, claims Bloomberg reportage, in a move aimed at further reducing the company’s debt burden.

Italy’s biggest utility has received non-binding bids for an 80% stake in the project, valued at around €2 billion ($2.17 billion), according to the publication’s sources. Under the plan, Enel would look to retain around 20% to secure governance at the unit.

Should a deal go through, it will mark the latest from the Rome-based energy major in an attempt to alleviate their consolidated debt.

Earlier this year, the Group sold their stakes in Romanian operations to Greece’s PCC. Late last year they sold 50% of their stakes in Gridspertise. Both transactions were hoped to mitigate their net debt which, as of March this year, values approximately €1.7 billion ($1.8 billion).

This latest consideration, states Bloomberg, sees Enel working with advisers for the sale of the storage unit, which is attracting interest from infrastructure funds.

The project uses industrial-scale batteries used to store energy created from renewable sources that will eventually be inserted into the national electric grid.

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Uruguay smart meter tender

As Uruguay state-owned utility UTE (National Administration of Power Plants and Electrical Transmissions) continues a strategic drive to replace residential meters with smart meters, the country’s government has announced a smart meter tender.

According to bnamericas, the tender sees officials seeking 180,000 single phase and 20,000 three-phase smart meters alongside the necessary software and components, consulting-training and maintenance services.

The tender was announced in the same span as UTE announced landmark installation of one million residential smart meters, part of their plan to install smart meters in all homes across the country by 2024.

Commemorating the millionth installation, UTE president Silvia Emaldi stated: “These devices and the technical infrastructure to manage remotely allow us to provide a better service and a reduction in costs for UTE, which is shared with customers.”

Commemorating the one millionth smart meter installation in the Buceo, Montevideo, Uruguay. Attended by the Minister of MIEM Omar Paganini, the president of ANTEL Gabriel Gurméndez, the president of UTE Silvia Emaldi, together with directors and members of the company’s management and other authorities. Image courtesy UTE.

Emaldi added how, as of July 5, the smart metering programme will be extended to SMEs. Bids for the tender are due May 5.

#ICYMI: Australia’s QIC closes Vector Metering ahead of schedule

Australian state-owned QIC (Queensland Investment Corporation) has reached contractual close for its joint venture deal with Vector Limited’s New Zealand and Australian smart metering business – Vector Metering – touted as the largest smart meter provider of its kind across Australia and New Zealand.

The acquisition, initially required to be closed by June of this year, remains subject to regulatory approvals and follows Vector’s announcement in December 2022 of QIC as its preferred joint venture partner.

The deal consists of a sale by Vector of a 50% interest in Vector Metering to a new fund and co-investors managed by QIC Infrastructure. The investment is the first asset for this new QIC Infrastructure fund.

Vector Metering owns and manages over 2.3 million meters across the electricity and gas markets in Australia and New Zealand.

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Yusuf Latief
Content Producer, Smart Energy International

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