RE: Speculation23 Oct 2021 18:57
SPONSOR SEEKS EQUITY INVESTOR FOR UK GAS PEAKERS
13 October 2021 | 12:18 BST
Battery, power and mining rm Corcel is looking for equity investors in two UK gas-red peaking power projects under development totalling 100 MW, sources familiar with the deal said.
London-listed Corcel is working with advisors Claireld and Portland Advisers to nd investors that will provide funding and take a majority stake in the Avonmouth and Tring Road projects, which are set to have a capacity of 50 MW each, according to the sources.
The two projects, which Corcel is developing with Arlington Energy, another battery and exible power specialist, have a total funding requirement of GBP 53m, added the sources. The sponsors are also considering raising debt for the schemes, they said.
The projects are shovel-ready, having secured grid and gas connection, planning permission and land rights. They are expected to take part in the UK’s next capacity market auction next February, in which suppliers compete for 15-year tariffs in return for offering backup capacity to smooth supply shortfalls.
The plants will be red with multiple reciprocating gas engines, which have a much faster start-up time than gas turbines. The projects also expect to generate income by offering grid balancing services and selling electricity on the day-ahead market, in addition to capacity tariffs.
Corcel is also considering working with the potential new investors on a further 270 MW pipeline of other peakers and energy storage sites, added one of the sources.
Corcel bought a 40% stake in the Tring Road project, outside the town of Aylesbury, from Arlington Energy for GBP 400,000 last May. In the same month it acquired exclusivity rights over 100% of the Avonmouth project near Bristol for GBP 144,000, with Corcel taking charge of the projects’ nancing and Arlington leading construction and operations.
At the time of the acquisitions, the company said it received third party estimates that Avonmouth would generate annual gross margins of between GBP 67,000 and GBP 101,000 per MW each year, while Tring Road would generate between GBP 103,000 and GBP 147,000.
In addition to these projects, Corcel owns a 100 MW battery energy storage project in Burwell, Cambridgeshire, and has mining development projects for battery metals in Papua New Guinea and Canada.
Appetite for fossil fuel-red power plants among investors including infrastructure funds is waning, but gas-red peakers have recently attracted interest due to their role as a complementary power supply to growing intermittent renewables. However, they face increasing competition from fast-developing battery storage technology.
In one of the latest deals, Investment Management Corporation of Ontario (IMCO) bought UK exible power generation platform Green Frog Power, which has a mix of gas, diesel and battery projects.
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