In Heysham, North West England, Kona Energy has agreed to sell a 200MW energy storage project that is ready for construction to Gore Street Energy Storage Fund.
One of the largest storage projects in Europe, the project is also GSF’s biggest acquisition to date.
With this transaction, GSF’s portfolio will now include 25 projects totalling 898MW in operating and under development in the US, UK, Ireland, and Germany.
All land rights, a grid connection, and planning approval have been obtained for the project.
Instead of the local distribution network, it will connect to the main transmission network of National Grid, enabling it to function independently of a third-party distributor. This could create new revenue prospects while lowering capital expenditures and operating expenses.
After purchasing the 57MW Enderby project in 2021, this is GSF’s second major transmission-connected facility.
Grid connection is planned to happen no later than the fourth quarter of 2026, but Gore Street Capital, GSF’s investment manager, will work to move forward the timeframe while keeping the EPC procurement process as affordable as possible.
The choice of the system duration will affect the final capex. The idea is adaptable enough to deploy a storage system for up to two hours. An unlevered IRR at least in line with GSF’s goal return is anticipated from the project.
CEO of Gore Street Capital, Alex O’Cinneide, said “We are delighted by the company’s continued good progress over the past 12 months. Despite recent market volatility, the company’s operational fleet continues to yield higher-than-expected revenue across our markets.”
“With the acquisition of this landmark 200MW transmission-connected project from Kona Energy, our largest acquisition yet, the company has further strengthened its leadership position in the GB market.”
“We are encouraged that an asset of this scale will benefit from being connected to the main transmission network, providing attractive running cost savings and potential additional revenue streams. We remain very selective on new acquisition opportunities focusing on those, such as this project, with significant cost and revenue advantages.”