Zenobe Energy, a UK-based electric vehicle fleet operator, and battery storage project developer, secured a £235 million (~$252 million) long-term debt facility to fund its next two grid-scale, transmission-connected battery storage projects totaling 400 MW/ 800 MWh in Scotland.
The financing comes from the Canadian Imperial Bank of Commerce, Rabobank, Santander UK, Siemens Financial Services through Siemens Bank, and NatWest. For the transaction, NatWest acted as the sole debt advisor.
The debt facility also includes a £400 million (~$430 million) accordion facility that will be used for debt finance expansions at each site and future projects, bringing Zenobe’s total battery storage portfolio in Scotland to 1,050 MW / 2,100 MWh by 2026.
The projects were awarded to Zenobe following a successful application to National Grid ESO’s Stability Pathfinder process to improve the long-term stability of the electricity system.
Andy Matthews, Head of Greenfield at Infracapital, said: “Grid balancing and stability are becoming increasingly important issues for the UK’s energy system as we increase the adoption of intermittent renewable energy generation.”
The two projects, Blackhillock and Kilmarnock South, will be located at two of Zenobē’s transmission-connected sites in Scotland. Blackhillock, a 200 MW / 400 MWh site near Inverness, will go live in the summer of 2024, and Kilmarnock South, another 200 MW / 400 MWh site near Glasgow, will go live shortly after that. Both projects can be expanded by additional 100 MW / 200 MWh.
The batteries are expected to provide a wide range of services, including balancing supply and demand, storing electricity at times of peak renewable generation, and ensuring network demand.
Zenobe currently has approximately 430 MW of contracted grid-scale battery storage in the UK, around 170 MW of which is operational, including Zenobē’s landmark 100 MW battery storage asset at Capenhurst, Cheshire.
In February last year, Zenobe Energy secured a multi-source debt structure of £241 million (~$326.2 million) to accelerate the expansion of the electric vehicle fleet sector. According to Mercom Research, Zenobe secured £150 million (~$203 million) in November 2020 from Infracapital, the infrastructure investment arm of asset manager M&G Plc.
According to Mercom’s Annual And Q4 2022 Funding and M&A Report for Storage, Grid & Efficiency. In 2022, 41 Energy Storage project funding deals were announced totaling $6.1 billion, a 68% increase in Energy Storage project funding, compared with $3.7 billion raised in 24 deals in 2021.