Siemens’ international financing arm, the North American Development Bank (NADB), and energy storage developer EnerSmart Storage have signed a $78.2 million loan agreement to operate a commercial battery storage facility with a total installed capacity of 165MW in California. able to provide funding for the project portfolio.
Debt financing from NDB and Siemens Financial Services will fund the design, construction and operation of a portfolio of energy storage projects at nine sites in San Diego County totaling 165MW/330MWh. EnerSmart Storage is a developer, owner and operator of projects in the service area of utility San Diego Gas & Electric (SDG&E).
The energy storage projects will be deployed within the service area of San Diego Gas & Electric (SDG&E), which deployed a 30MW lithium-ion battery storage system in 2017.
The deal is believed to be the first reported debt financing for a fully commercial battery storage system project in the United States, meaning the battery storage project has not entered into any long-term resource adequacy agreement with the utility. A press release from the companies noted that these battery storage projects may provide energy through resource adequacy agreements in the future.
Resource sufficiency is the California Independent System Operator (CAISO) way of ensuring that entities such as utilities have enough power to meet demand in order to draw power from battery storage projects during the 10- to 20-year agreement period.
The vast majority of battery storage projects sign these agreements before they become operational, providing the long-term revenue guarantees that debt financing providers need. For example, according to industry media reports, California regulators recently approved five battery energy storage projects whose owners have signed long-term resource adequacy agreements with Southern California Edison Utilities.
The North American Development Bank, which focuses on investments along and near the U.S.-Mexico border, said the battery storage systems will provide electricity services through the California Independent System Operator (CAISO) wholesale energy and ancillary services market.
