Bank investment provides significant boost to UK battery storage sector
Bank investment provides significant boost to UK battery storage sector
03 November 2023
The UK Infrastructure Bank has announced a £60million loan to support Pacific Green in its development of a new 249 MW / 373.5 MWh electricity storage park in Kent.
The Bank’s financing is part of a £120 million debt package alongside NatWest, which will enable the construction of the short duration battery storage facility, providing a significant boost to grid stability and contributing to the UK’s energy security.
Once complete the Sheaf Energy Park, located on the former home of a thermal power station, will be one of the largest standalone battery storage projects in the country.
The investment strongly aligns with the Bank’s net zero mandate, helping to provide the energy storage necessary to support the rapid scale up of renewables, as set out in the British Energy Security Strategy. National Grid forecast that up to 29 GW of storage could be needed by 2030 and up to 51 GW by 2050 – up from around 5 GW today.
The project will also create and support around 56 jobs across construction and operations in Thanet, Kent, in line with the Bank’s mandate to boost regional and local economic growth.
Short duration lithium-ion battery storage in particular is seen as a crucial component for the successful transition to clean energy by enabling the grid to respond quickly to peaks and troughs in electricity supply and demand throughout the day.
The Bank’s recently published strategic update highlights short duration storage as a sector where its financing can play a key role in developing the nascent debt market.
The deal marks the Bank’s second debt investment in the battery storage market following its £62.5 million commitment to Pulse Clean Energy in May, in addition to £200 million of investment into the Equitix UK Electricity Storage Fund and Gresham House Secure Income Renewable Energy & Storage LP (SIRES). Collectively, the investments will potentially unlock a further £1.2 billion in private capital for the storage sector.
John Flint, CEO of UK Infrastructure Bank, said:
"The rapid scale-up of renewables onto the grid means the UK needs more storage capacity, and we need it fast. That means scaling this technology which in turn presents challenges for the market. This is exactly why the Bank is here.
"We want to play a meaningful role in the transition of the energy sector and this deal is a great example of how the Bank’s debt financing can help accelerate these large storage projects to bring them online sooner, while also providing crucial market confidence in the sector."
Economic Secretary to the Treasury, Andrew Griffith, said:
"Energy security has never been more important to the UK. This £60m investment will turbocharge efforts to boost our grid capacity – helping Pacific Green create the largest battery storage project in the country – creating 56 jobs along the way."
Scott Poulter, CEO of Pacific Green Technologies, Inc., commented:
"We are thrilled to have worked alongside UKIB and NatWest to finance this groundbreaking battery energy storage project that will contribute to the UK’s Net Zero Strategy for decades to come."
Jacob Lloyd, Head of Specialist Asset Finance at NatWest, said:
"It’s great to support the new Sheaf Energy Park project and continue to help the decarbonisation agenda of the UK, working alongside UKIB to give Pacific Green a market leading debt structure that helps them bring in a further 249MW of flexible generation assets to the grid. BESS continues to play a big role in the UK’s grid stability, and we look forward to working further with Pacific Green and UK Infrastructure Bank on the future of energy transition."
Further information
Read the factsheet for this deal
About Pacific Green
Pacific Green is focused on addressing the world’s need for cleaner and more sustainable energy. Pacific Green offers Battery Energy Storage Systems and Concentrated Solar Power to complement its environmental technologies division. Pacific Green has offices in the USA, Canada, United Kingdom, Australia, Saudi Arabia and China.