London-based Gore Street Energy Storage Fund (GSF) has agreed to acquire a 75MW/150MWh energy storage project in Texas, United States.
Following this acquisition, GSF’s international portfolio will consist of 26 projects with a total capacity of 973.2MW in operation and construction across the UK, Ireland, Germany and the United States.
The project will be the Company’s largest acquisition in the Electric Reliability Council of Texas (ERCOT) market to date and brings the Company’s total US portfolio to 144.7MW.
The pre-construction project has secured all land rights, grid connections and planning consents and is expected to be of two-hour duration.
The grid connection is scheduled for H1 2024, with commercial operations to commence shortly thereafter.
Gore Street’s investment manager, Gore Street Capital Limited, estimates the project will have an unlevered IRR in the range of 10-12%, in line with GSF’s target.
Total expenditure on the project to commission is expected to be a minimum of £50m.
North America remains a key target for the Company.
The current regulatory landscape is becoming more favourable, with the Inflation Reduction Act introducing policies supporting energy storage deployment.
ERCOT is the grid operator for most of Texas and this continues to be a lucrative market due to the high penetration of renewables, creating a unique opportunity for battery storage, GSR said.
Chief executive of Gore Street Capital Alex O’Cinneide: “We are pleased to announce this acquisition in the high-growth market of ERCOT, US, adding to the Company’s existing international portfolio of energy storage assets.
“This is a continuation of ourdiversification strategyof reducing single-point risk while gaining exposure to high-growth markets that demonstrate favourable characteristics similar to the GB and Irish markets.
“We see this unique geographical diversification in energy storage as increasingly beneficial to shareholders during the current political and economic climate.”