esVolta, a developer of utility-scale battery energy storage projects, recently closed a $140 million senior secured credit facility to finance a 136 MW/480 MWh portfolio of eight storage projects in California.
It’s this type of institutional investing that’s going to drive the massive growth expected from the energy storage industry.
It’s not the next lithium-ion battery breakthrough that’s going to accelerate the energy storage industry. It’s not the next inflated promise from a flow battery startup, compressed-air scheme, solid-state battery research project or energy storage dream funded by Bill Gates.
It’s energy storage projects as investment-grade finance tools for institutional investors that will grow the energy storage market to $546 billion in annual revenue by 2035, as predicted by Lux Research or grow the business tenfold from 2018 to 2023, rising to $5 billion annually, according to Wood Mackenzie.
One of the largest debt transactions in the energy storage market
CIT’s power and energy business led the financing round, along with Siemens Financial Services (SFS), CoBank, ACB, and KeyBanc Capital Markets.
These investor names can typically be found financing natural gas power plants and wind projects — so this entry into energy storage is a bit of a watershed moment.
Krish Koomar, CFO of esVolta said it was “one of the largest and most innovative debt transactions” in energy storage.
There was a wave of finance directed at energy storage a few years ago — more in the behind-the-meter realm than these projects. Stem, a provider of commercial energy-storage systems, added $100 million in financing from energy investor Starwood Energy Group, Generate and Clean Feet Investors. Mainstream infrastructure investor Macquarie Group planned to put $200 million into a fleet of battery projects from Advanced Microgrid Solutions.
Since then, Stem and AMS have had to retrench and alter their business plans. Stem has recently signaled that it is up for sale.
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