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UK local authority financing storage project
South Somerset District Council is backing the construction of a 25MW battery storage project alongside local developer Opium Power.
The scheme, which will provide grid-balancing services to National Grid, forms part of the local authority’s broader plan to make investments which provide returns that allow it to boost spending on community services.
The storage unit – due online by the end of 2018 – will be used to balance out fluctuating demands on the local Somerset power grid. It will also earn revenue from buying energy when it is cheap for re-sale at times of peak demand.
South Somerset and Opium Power Limited will co-own the facility, with the latter acting as project manager.
BYD Europe BV will supply the batteries, while BSR Connect is the project roll out connection contractor.
Western Power Distribution will be the local distribution network operator.
The council described the moves last week as its “first exciting step into ownership and development of renewable energy”.
The site will be able to produce 25MW of power for the grid for one hour’s duration – the local authority said it could consider a further phase to increase the capacity of the facility at a later date.
South Somerset has set itself a minimum return on investment – after repaying loans and interest – of 7.5%. It is forecasting an IRR of c14% based upon current cashflow forecasts.
South Somerset’s investment in battery storage is the second large-scale move into the sector known to have been made by a UK local authority.
Swindon Borough Council-owned Public Power Solutions earlier this year submitted an application for the circa 50MW Mannington battery storage project, and is in the process of finding an investor to take on its construction. It is expected to select a new owner by August.