The UK government’s national infrastructure bank is making its first investments in the energy-storage sector with a commitment to invest up to £200m (€228m) in newly launched funds managed by Equitix and Gresham House.
The commitments follow the UK Infrastructure Bank’s (UKIB) launch of an expression-of-interest process in July last year, seeking partnership proposals from managers to enable the bank to provide finance to help “accelerate the deployment of storage technologies” while it grows its own abilities to invest.
UKIB, which is making the investments on a match-funding basis, said it has now committed to investing up to £125m to support the launch of the Equitix UK Electricity Storage Fund and will commit £75m to Gresham House Secure Income Renewable Energy & Storage (SIRES).
The commitment to the SIRES fund is being made alongside a £65m seed investment from British Gas’s parent Centrica as a cornerstone investor.
The fund by UK-based infrastructure asset manager Equitix will focus on a combination of business models across both short and long-duration storage. Short-duration strategies may include installation in households and at underutilised commercial premises. The fund will also aim to deploy a range of long-duration storage technologies, such as pumped hydro.
The Gresham House fund will focus on developing the collocation of renewable generation and short-duration electricity storage facilities to help maximise grid connections. Centrica’s investment will be used to fund the construction of the seed asset, a collocated solar and battery energy storage project in Hartlepool, County Durham, with 50MWp solar capacity and 75MWh of battery energy storage.
John Flint, UKIB’s CEO, said: “Increasing electricity storage capacity will help secure energy supply in the future and drive us along the path to net zero. We are making progress as a nation, but we need much more investment to meet necessary targets, and the clock is ticking.
“The bank’s investment into these new funds will help break down the barriers to greater, long-term investment across a range of storage sector and renewable energy opportunities.”
UKIB was announced as part of the government’s national infrastructure strategy in 2020 and was launched in 2021. The bank aims to provide £22bn of infrastructure finance to tackle climate change and support regional and local economic growth across the UK.
Chris O’Shea, CEO of Centrica, said: “We’re delighted to be the cornerstone investor in this fund and look forward to working with our partners, Gresham House and the UK Infrastructure Bank, to deliver cleaner, greener and cheaper power to our customers.
“Some think the UK’s journey to net zero has to be expensive and inconvenient, but at Centrica we see the transition to net zero as a fantastic opportunity for the UK to create new well-paid jobs and for businesses to transform the way they operate.
“We expect hundreds of millions of pounds to be invested through this fund in renewable energy generation and storage assets in the UK, strengthening our leadership as the UK’s largest provider of green electricity.”
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