Northland Power has achieved financial close on a 250MW energy storage project in Ontario, Canada.
The Oneida energy storage project, in Southern Ontario, has secured all necessary financing.
Northland owns 72% of the project, which is being developed in partnership with NRStor, Six Nations of the Grand River Development Corporation and Aecon Group.
Oneida is a 250MW/1000 megawatt hour capacity battery located in Haldimand County and is Northland’s first investment in energy storage.
Northland will look at further opportunities within the Ontario market and other key markets to build out its battery energy storage portfolio.
Full commercial operations for the project are expected to commence in 2025.
Mike Crawley, President and Chief Executive Officer of Northland, said: “Oneida provides Northland with size and scale in Ontario from which we can grow.
“We will look at further development opportunities within energy storage as part of our overall ambition to help accelerate the global clean energy transition.”
The total cost for the project is approximately C$800m ($600m).
Consistent with Northland’s financing strategy, the company will utilize non-recourse project-level financing to fund approximately 75% of the construction costs.
Northland’s equity component will be funded from existing cash on hand and available liquidity under its revolving credit facility.
Total debt required for the project has been fully committed by an external lender in the form of a non-recourse construction and term loan, matching the tenor of the capacity contract.
Natural Resources Canada (NRCan) has also provided funding from the Smart Renewables and Electrification Pathways program, recognising that the project will reduce greenhouse gas emissions.
The remaining costs will be funded by the contributed equity from the various partners.
Oneida will benefit from a 20-year capacity contract with the IESO in Ontario.
Contracted revenue constitutes approximately 60% total revenues, and the remaining will be earned from operating the battery in the wholesale market.