LONDON, UK: The Board of Directors of Triple Point Energy Efficiency Infrastructure Company introduced that the Group, via TEEC Holdings Ltd, has signed contracts to present a debt facility to a subsidiary of Virmati Energy Ltd, for the needs of constructing a portfolio of 4 geographically diverse Battery Energy Storage System (BESS) assets within the UK.
The total Facility quantities to £45.6 million and carries a fixed rate of curiosity which will support TEEC to meet its dividend target.
The Portfolio has a complete capability of 110MW. The first BESS asset, which is a one hour duration battery, is anticipated to become operational in June 2022. It is found within the North of England and has a complete capability of 20MW. The different three BESS assets can be found in Scotland (two hour duration battery; total capability 50MW), Wales (two hour duration battery; total capability 20MW), and the South East of England (one hour duration battery; total capability 20MW). These are anticipated to become operational in 2023.
Key phrases of the Facility include:
· funding will solely happen as soon as the projects are every sufficiently de-risked against construction and operational risks. It is anticipated that draw down will happen over the monetary year to 31 March 2023;
· dedicated amortising time period of 18.25 years following an preliminary 1 year period;
· elevated yield within the occasion of inflation (consumer price index) exceeding base case expectations, topic to a cap;
· safety including, amongst different rights, charges over the assets of the Borrower;
· TEEC will obtain an association fee, annual monitoring fees, and a non-utilisation fee on undrawn quantities of the Facility; and
· the Borrower advantages from an ESG margin ratchet which delivers a possible discount within the speed payable if ambitious avoided carbon targets are met throughout trading.
The Portfolio forms a half of the pipeline of BESS asset funding alternatives recognized by the Company in its announcement of 1 February 2022, together with over 500MW of additional assets to be commissioned by Field.
With the continued roll-out of intermittent renewable energy facilities throughout the UK’s grid, demand for grid balancing and storage services within the UK is probably going to remain excessive for a significant interval of time. Grid-scale battery systems present one of many most efficient and confirmed options to this requirement, storing energy when it’s produced in extra after which making it available when demand is higher.
As with different infrastructure asset classes, long-term debt capital has an important role to play within the scale up of BESS within the UK.
Field was established in 2020 with a imaginative and prescient to finance, build, function and monetise the renewable infrastructure wanted to attain net zero, beginning with battery storage, and has aspirations to be a market chief in sustainable practices in energy storage. Alongside Field, the Group has negotiated robust provisions round accountable sourcing, in addition to a technique for monitoring emissions related to the projects, together with scope 3. The Group additionally has consent rights over recycling technique at finish of cell life to make sure it meets its environmental standards.
This transaction is in line with the Company’s focused risk/return profile and goal of delivering a portfolio of safe investments that generates a complete return for investors comprising sustainable and rising income and capital growth predominantly supported by long-term contracts. It additionally helps the transition to a low carbon economy in accordance with the UK government’s overall environmental targets.
Commenting on the transaction, John Roberts, the Company’s Chair, said: “Now greater than ever, we’re seeing the more and more pressing want for energy effectivity solutions. As the world strikes towards greater use of renewable sources of energy, battery storage is important to enhance entrance of meter energy efficiency, maximising and making use of the intermittent energy generated from such renewable sources. Efficient use of such energy reduces the reliance on conventional fossil fuel generation, thus reducing energy prices and carbon emissions.”