Your browser is not supported. Please update it.

18 October 2019

KiWi Power gets 15MW aggregation deal, UK batteries hotting up

Demand Response (DR) aggregator KiWi Power has announced that it has been picked by Gresham House New Energy to optimize its new 15 MW battery in Bristol. KiWi will be able to use the battery in the UK’s DR programs, providing it as a grid-scale asset that will earn Gresham House participation fees and, hopefully, a tidy profit for KiWi and its platform.

Gresham House is an investment vehicle that is targeting, as the name suggests, new energy resources and technologies. The investment team is focused on solar, electric transportation, onshore wind, and energy storage. To this end, it whiffed on its recent share placement, only raising £41.6mn to fund its current pipeline, and falling short of the £58mn it was hoping to secure.

Nonetheless, Gresham House is pretty optimistic. A spokesperson said that it now has “the funding it needs to pursue its current exclusivity pipeline and capital in addition to ‘selectively acquire’ assets in the further pipeline,” but we’re sure that the missed target will have sent tremors around the renewable energy investment community.

This could turn out to be the bigger story, in time, but for now, KiWi is pleased as punch with the new deal. KiWi is going to be using its energy management platform to feed energy stored in the battery into the grid, based on calculations. Essentially, the battery is going to discharge when the price is right, using a formula that is adjusting for the impact on the battery’s lifespan and performance over time.

This 15 MW battery is going to be used in grid ancillary services and the Balancing Mechanism (BM) program, once it is installed and onlined later this month. KiWi believes that it will have 80 MW of batteries hooked up to the platform by the end of this year, making it one of the biggest players in the UK grid-services market.

Speaking of which, rival EDF also recently signed a deal with Gresham House, for a 20 MW energy storage project using EDF’s PowerShift offering. Here, EDF is working with Upside Energy, to handle the battery as well as 4 MW of undisclosed generation assets. PowerShift will be using the resource in ancillary services, load-shifting, and the wholesale market.

Gresham’s Ben Guest, the lead fund manager, said that “asset optimization is the largest contributor to revenues and through this partnership with EDF Energy we are able to broaden our revenue stack and provide our investors with certainty despite the shifting regulatory environment.”

That wasn’t the first time that EDF and Upside Energy have worked together. Back in March, they were picked by Anesco to optimize its Clayhill solar farm and storage assets, using PowerShift. In this project, the wholesale market was the bigger focus, and PowerShift is essentially working out the best times to store and sell energy, based on the variations in prices. Crucially, storage lets the solar farm sell energy throughout the night too.

Anesco is a big deal, with 100 MW of live battery storage capacity, and a pipeline of up to 380 MW by 2020. Steve Shine, executive chairman at Anesco, said “this is a partnership between three fantastic organizations. We’re already achieving great results and I am sure we will be working together ever more closely in the future.”

KiWi, backed by major investor Engie, will be working at Lockleaze, in Bristol – just a few miles north of Rethink’s offices. Jay Zoellner, KiWi’s CEO “projects such as this demonstrate the value distributed energy resources can deliver for investors and the environment alike.”

Returning to Gresham House’s recent fundraising efforts, the firm says that its British Strategic Investment Fund (BSIF) has now passed the £200mn mark, after a £35mn round that included the Greater Manchester Pension Fund and the Greater London Authority. Perhaps oddly, Gresham’s other cornerstone investors are the Teesside Pension Fund and the Royal County of Berkshire Pension Fund.

This BSIF fund is focused on housing and infrastructure, of which energy is a part of the portfolio. Gresham says it has made six investment so far, spending 41% of its available cash. These were made in renewable energy, waste recycling, vertical farming, and key worker accommodation assets – and Gresham is hoping for a long-term annual net return of 8% to 10%.

As for the Gresham energy pipeline, the firm says it has started the due diligence on 95 MW across four energy storage projects, and is in early-stage discussions with six other projects that would represent 240 MW. To this end, Gresham says it is the leader in the UK grid-scale storage market, but it won’t be long before other utilities, besides EDF, start turning the screw and catching up.