Generate Capital enters front-of-the-meter energy storage market with developer acquisition


Generate Capital has acquired US large-scale battery storage developer esVolta, marking the sustainable infrastructure investment firm’s first step into the front-of-the-meter battery market.

Generate announced the deal yesterday which adds the developer’s portfolio of over 900MWh of operational and contracted projects in the US and Canada to the investor’s pipeline.

That includes the 75MW/300MWh Hummingbird battery energy storage system (BESS) project in development in California, which is contracted to help utility Pacific Gas & Electric (PG&E) reduce its reliance on gas-fired peaker plants.

Most of esVolta’s listed completed projects are in California, although the company was behind the largest BESS in Canada at the time of its commissioning, an 8.8MW/40.8MWh system in Stratford, Ontario.

The company’s projects in development are spread across eight US states including leading energy storage markets like California, Texas and Arizona as well as up-and-comers like Virginia, Washington and New Mexico.

Generate Capital, meanwhile, has invested in a wide range of clean energy and other sustainable infrastructure asset classes since its founding in 2014 by a group of entrepreneurs that included solar industry veteran Jigar Shah, who is now leading the US Department of Energy’s Loan Programs Office for the Biden-Harris Administration.

The firm invests in and partners up with technology and project developers, with areas including clean water provision, waste management, energy efficiency and many more. Its involvement in battery storage to date has however been behind-the-meter, through things like electrification of buildings and clean energy retrofits for schools and hospitals.

In July last year, Generate Capital secured US$2 billion funding to scale up its activities, enabling it to add to an existing asset base already worth about that much.

Since that fund raise, the group’s investments have included a US$240 million equity investment into the US community and a distributed solar developer Nexamp and US$500 million for large-scale renewables developer Pine Gate Renewables. Both Nexamp and Pine Gate work on projects that pair solar PV with energy storage; The latter has notably signed contracts for the multi-gigawatt supply of non-lithium battery technologies, with metal-hydrogen startup Enervenue as well as zinc battery players Urban Electric Power and Eos Energy Enterprises.

“We have long believed that battery storage is critical to building a sustainable energy system and ensuring grid reliability as we scale up renewables and accelerate the energy transition. That is why we have been investing money and effort to grow this market since we started the company,” Scott Jacobs, CEO and co-founder of Generate Capital said.

“Our partnership with esVolta today highlights the enormous potential for battery storage projects to rebuild our energy system.”

The news comes hot on the heels of another US grid-scale battery developer acquisition by a major player earlier this month. Norwegian state-owned power company Equinor acquired East Point Energy, which has developed and sold on three large-scale projects in Virginia to date since its founding in 2018.

As that deal closed, Equinor said it was looking for an early adopter foothold into the utility-scale BESS market. Unlike esVolta, East Point Energy only develops projects, it does not own and operate them as well, and Equinor said adding this capability would be among its plans for the company.

esVolta: Quick background of Generate’s new acquisition

esVolta president Randolph Mann described the company’s new owner as the “ideal choice” to support its long-term growth, sharing a vision “of a modernized and decarbonised grid and the comprehensive approach to building it out”.

Here’s a quick run-through of esVolta’s background, as reported by Energy-Storage.news since the company was founded in 2017.

December 2017: Powin Energy sells a 116MWh portfolio of project assets and future development opportunities to esVolta, which helps fund Powin’s pivot away from development activities to focus on the system integration and energy storage system manufacturer role that is better known for today. The pair retained joint ownership of some projects in the portfolio.

October-November 2018: California investor-owned utility (IOU) Southern California Edison (SCE) awards esVolta three projects totaling 38.5MWh capacity, which are shortly afterward approved by the regulatory California Public Utilities Commission (CPUC). Collectively, they will help SCE manage its electricity networks, serving as non-wires alternatives (NWAs) to expensive transmission infrastructure buildout.

July 2019: Wholesale power provider Southern Power announced it was working with the developer on 86MW/345MWh of BESS across four sites in California.

February 2020: esVolta closes a senior secured credit facility that the company said was worth “around US$140 million” and would be put towards developing a California portfolio of projects it dubbed ‘esFaraday’, totalling 136MW output and 480MWh capacity.

April 2020: esVolta is selected to provide a 15MW/60MWh BESS for California Choice Energy Authority (CalChoice), a Community Choice Aggregator (CCA) supplying electricity to several cities in the state.

August 2020: India-headquartered software and data analytics company ION Energy is selected by esVolta to improve operational efficiency of the developer’s 580MWh fleet of battery storage in California, including assets in operation and development.

January 2021: Financial services group Macquarie’s Green Investment Group invests an undisclosed sum into esVolta, identifying that it had “significant growth potential”. Investment was in the form of a bridge loan that converted later into equity stake.

March 2021: Appearing at an online edition of Energy Storage Summit USA, hosted by our publisher Solar Media, esVolta president Randolph Mann discussed some of the complexities and potential for solving big energy problems and making money with battery storage.

July 2022: Acquired by Generate Capital.

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