Aerial of Orange County, Southern California

Energy efficiency

Building tomorrow’s energy grid with AMS, CIT and Tesla

26 March 2019

Landmark financing of a utility-scale, behind-the-meter battery portfolio that will help alleviate grid congestion and lower customer electricity bills across the West Los Angeles Basin.

62 MW/342 MWh

fleet of behind-the-meter battery storage

$US200 million

of project capital to roll-out the portfolio

Industry first project financing

in the emerging behind-the-meter energy storage sector

Opportunity

A partnership to build tomorrow’s energy grid.

The rapid growth and integration of renewable energy resources coupled with the retirement of aging baseload thermal power plants created significant stress on portions of California’s electrical grid, especially in Southern California Edison’s (SCE) service territories in Los Angeles and Orange Counties. Advanced Microgrid Solutions (AMS) set out to address this problem by developing an aggregated fleet of battery-based energy storage systems co-located at SCE’s large-load commercial and industrial customers.

Recognizing this growing need for grid support, we acquired the in-development portfolio of distributed battery storage systems from AMS in 2016. The contracted, utility-scale portfolio gave Macquarie the opportunity to deploy capital and leverage its development expertise and renewable energy franchise in the US energy storage sector. The Portfolio contracted with 30 unique large-load ‘host’ customers to build and dispatch a fleet of 86 battery storage systems distributed across SCE’s West Los Angeles Basin service territory with the nameplate capacity to reduce up to 62 MW or 342 MWh of load from the grid.

"Together we are delivering best-in-class storage solutions to build tomorrow's energy grid."

Kelly Warner
President of AMS

Actions

Comprehensive support from start to finish.

Our infrastructure specialists and AMS jointly developed the portfolio and facilitated $200 million of project capital required to design and build the fleet of cutting-edge battery storage systems primarily utilizing Tesla’s Powerpack solution.

Following the acquisition of the portfolio, our team of experts structured, arranged and established a bankable contractual framework to execute one of the largest project financing deals in the emerging behind-the-meter energy storage sector, an industry first for this type of asset in the US.

Our deep expertise in infrastructure enabled us to structure a traditional project finance solution for the portfolio. As demand for energy storage continues to grow, this transaction should serve as a model for future financings in this exciting asset class.

"One of the biggest challenges facing renewable power is the lack of capacity to store clean energy until it’s needed most. We were pleased to serve as lead arranger on financing that significantly advances the grid-connected battery storage infrastructure in Southern California."

Mike Lorusso
Managing Director and Group Head of CIT’s Power and Energy unit

Impact

The fleet of energy storage systems, which are located at various large-load commercial, industrial and government host sites in Los Angeles and Orange counties, are used for utility grid services including flexible and reserve capacity, solar integration and voltage management in addition to retail energy services such as demand management, back up generation and enhanced power quality.

Grid-connected battery storage solutions are increasingly recognized as a way to accelerate America's adoption of clean energy resources, as well as improve the operating capabilities of the grid, while lowering costs and ensuring reliability.

GIG is no longer involved in this project. This case study and the data within it were accurate at time of publish.

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