Gore Street Energy Storage Fund plc (LON:GSF) said today it has agreed to acquire a 75-MW/150-MWh pre-construction energy storage project in Texas that will expand its US portfolio to 144.7 MW.
After the acquisition, the London-listed energy storage fund will have 26 projects totalling 973.2 MW in operation and construction, located in the UK, Ireland, Germany and the US.
The deal, with an undisclosed vendor, marks the firm’s largest acquisition in the lucrative ERCOT (the Electric Reliability Council of Texas) market, where the high penetration of renewables creates favourable conditions for battery storage. The US Inflation Reduction Act also improves the market landscape for energy storage.
The project is expected to be connected to the grid in the first half of 2024 and to start commercial operations soon after that. At least GBP 50 million (USD 61.6m/EUR 56.7m) is estimated to be spent on it till the point of commissioning.
According to Gore Street Capital Ltd, the fund’s investment manager, the project will have an unlevered internal rate of return (IRR) of between 10% and 12%, consistent with GSF’s goal.
GSF also said that its 79.9-MW Stony project in England is on schedule to begin operations next quarter.
“I look forward to sharing our progress over the next 12 months as 187 MW of additional operational capacity is scheduled to become operational in GB,” said Gore Street Capital chief executive Alex O’Cinneide.
(GBP 1 = USD 1.233/EUR 1.133)
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