Thursday, April 11, 2024

Developing and financing renewable energy

Peter Kavanagh, CEO & Founder of Harmony Energy and Investment Director of Harmony Energy Income Trust PLC, provides the inside line on the development of Pillswood – Europe’s largest battery energy storage scheme by MWH. 

With the EU and UK committed to net-zero carbon emissions by 2050, increasing our use of renewable energy has never been more important. In the UK in 2022, we produced c40% of our electricity from fossil fuels. We need to reduce this dramatically if we are going to mitigate climate change, meet global targets to reduce emissions, and ensure the future security of energy supply.

Setting store by batteries

The wind turbines and solar panels we see as we travel around the world are testament to the growing importance of wind and solar power. However, there’s another part of the renewable energy infrastructure that is less high profile, but equally important – energy storage. With the supply of wind and solar at the mercy of the weather, we need a system for balancing the flow of renewable energy at scale.

Large-scale battery energy storage schemes enable surplus wind and solar energy to flow into lithium-ion batteries, where it can be stored until needed. In the UK, National Grid states that to achieve sustainability targets we need 10 times the amount of battery energy storage currently on the network. Clearly, this is both a huge challenge and an opportunity.

Harmony Energy is one of the UK’s leading developers, owners and operators of utility-scale battery energy storage. So, what does it take to develop and finance a battery energy storage scheme? And what are the potential benefits for all involved?

The Pillswood story

Peter Kavangh at the Pillswood site

Last month saw a major milestone for Harmony Energy and our investment company Harmony Energy Income Trust Plc (HEIT) – the official opening of our Pillswood battery energy storage system near Hull. This is Europe’s largest battery energy storage system by capacity, capable of providing electricity to power c300,000 homes for two hours.

All battery energy storage projects depend on grid connections. The Pillswood site is ideally located next to the huge Creyke Beck electricity substation, north of Hull. The world’s largest offshore wind farm, Dogger Bank, feeds into the same substation.  An agricultural field next to the substation was the perfect spot for a development and, Northern Powergrid confirmed there was sufficient capacity and reinforcement on the network for batteries with a grid connection of 98MW.

We designed the layout of the batteries within the space and submitted a planning application to the local council. The site is in a flood sacrifice zone – used as a floodplain to prevent people’s houses flooding – so our design incorporated an elevated platform to raise the batteries from ground level. We also proposed landscaping to create biodiversity gains, including trees and over 1km of hedge planting on the site and along the access track. At the same time, we negotiated land rights with the four landowners who owned the field and land needed for the access route.

Ground-breaking work

Work began in autumn 2021 with the construction of a 1.5km access track, complete with two bridges and culverts. We then began to prepare the battery site itself, with the installation of 478 piles, each to a depth of around 13m. Ground beams were inserted to connect the piles, before our specialist construction team began building up the legs of the platforms for the batteries to sit.

Constructing to a tight timescale in a challenging geopolitical and global supply chain environment was no mean feat. To reduce the risk of delays on components, we spoke directly with factories and spent days negotiating logistics. Fortunately, there was no delay to the vital delivery of the two-hour Tesla Megapack batteries from Nevada – and the transformers only had to travel from Leeds.

After an intensive period of testing and control procedures, the Pillswood scheme was fully energised a month ahead of schedule – in time to support National Grid in providing stable, secure power to the network over the winter period.

Financing the build

Back in November 2021, Harmony Energy successfully floated its investment arm, Harmony Energy Income Trust Plc (HEIT), on the London Stock Exchange, raising £210m. HEIT has preferential rights to acquire and build out the next 1GW of Harmony Energy’s development pipeline – providing investors with an opportunity to participate in the construction and growth of battery energy storage and renewable energy.

HEIT stepped in with investment for Pillswood at the construction-ready stage – once planning, grid connection, construction and battery supply contracts and the lease option over the land had been secured. As a result, investors were protected against development risks inherent in a project like this, while benefitting from value uplift as the project went from construction to operation. One of the most remarkable aspects of battery energy storage schemes like Pillswood is that they are constructed without depending on government subsidy.

Looking to the future

Pillswood is the first of six similar schemes scheduled for delivery by HEIT in the coming year. Looking to the future, we need to work together globally to support developments like these if we want to enable clean energy generation and protect the future of our planet.

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