London-based Battery Energy Storage Solutions Ltd (“BESS”), a leading independent provider of power storage, energy security and energy flexibility services, has secured £28.5 million in funding from Santander Corporate & Commercial to execute its strategy of becoming one of the UK’s largest independent owners and operators of battery storage assets. The short term strategy is to build and operate a portfolio of 100MW of grid scale battery storage assets by the end of 2018.
Established in March 2017 by an executive team with extensive energy sector experience, BESS has focused on the profound market opportunities presented by the emerging battery storage market in the UK and the support needed for the broader transition of the UK’s power generation infrastructure from predominantly fossil fuel-based to a low or zero carbon base. As at the end of 2017, the company already owned and operated a 14MW portfolio of grid scale batteries either co-located with solar sites or connected directly into the distribution grid. A further 49MW of grid connected batteries will be connected and operating by the end of January 2018, bringing the total portfolio to 63MW across eight sites.
The firm has positioned itself to capitalise on the shift to efficient energy solutions impacting the UK. Last year was a benchmark year for this social and economic transition with 13 renewable energy records broken including; the first 24-hour period without coal generated power; the longest period without coal generation; the first time that wind, nuclear, and solar produced more than gas and coal; and the "greenest summer", with 52% of energy generated from low carbon sources.
In an indication of significant interest in BESS, in November last year the firm completed an equity raise of circa £50 million through both high net worth and institutional investors led by Tiger Infrastructure Partners, a New York-based investment firm dedicated to the communications, energy and transport sectors.
The transaction with Santander Corporate & Commercial was supported by TLT LLP. Burges Salmon LLP and Evergreen Capital Limited acted for BESS.
Howard Whitehead, Head of Infrastructure & Renewable Energy, Santander Corporate & Commercial, said: “We are delighted to have closed this landmark transaction with a new client in a new niche market segment: project finance for battery storage. We believe we are one of the first senior debt lenders to close a project finance transaction in this space, a fact which underscores Santander’s desire to be a leader in this fast developing sector.”
Mark Cumbo, Director, Infrastructure & Renewable Energy, Santander Corporate & Commercial, who led the deal team, added: “With the combination of both equity and Santander debt, BESS and its highly experienced management team are now able to execute the strategy of becoming one of the UK’s largest independent owners and operators of battery storage asset portfolios, underpinned with contracts with the National Grid.”
Nicholas Beatty, Co-founder, Battery Energy Storage Solutions Ltd said: “The UK’s power system is now the fourth cleanest in Europe. However, the pace of transition to a low carbon power system brings with it challenges for the National Grid in balancing the network and ensuring supply and demand is matched on a second by second basis. Such balancing of supply and demand only being possible by the introduction of new technologies like battery storage. We believe our company is uniquely placed to capture that market demand. We value the guidance and support provided by the Santander deal team in this complex transaction.”
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