Danish independent power producer (IPP) European Energy has secured finance for a renewable energy project in the UK that combines 68MW of solar PV capacity and a 47.5MW/95MWh battery energy storage system (BESS).
The Indian Queens hybrid renewable energy project in Cornwall, at which European Energy started construction work in May of this year, is expected to start commercial operations in 2027.
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Today, European Energy announced it had secured £58.1 million (US$78.45 million) in construction financing from Danske Bank; Jakob Hjørngaard, Danske Bank senior banker in large corporate banking, Denmark, said the transaction reflects the bank’s “commitment to the renewable energy market”.
The project already has a corporate power purchase agreement (cPPA) in place, and European Energy noted that its BESS component has secured a capacity market contract (CMC) with the UK government. BESS projects secured 576MW of obligations, equivalent to 8.02% of the total capacity awarded, in the most recent round of the UK government’s Capacity Market auction, which is often pointed to as a key market mechanism that can facilitate battery deployment in the country.
Last month, the government announced that next year’s Capacity Market auction would offer 46GW of total capacity, of which the T-4 auction, covering projects for the next four years, would account for 40.9GW. This is up from the 40GW of capacity awarded in this year’s T-4 auction, demonstrating the growing contribution of the CMCs to the UK clean energy space.
“Hybrid projects are becoming an increasingly important part of the renewable energy market,” added Jens Peter Zink, European Energy deputy CEO. “By integrating battery storage with solar generation, we are creating more resilient and flexible energy assets while strengthening their long-term investment profile.”
Batteries, more broadly, are becoming increasingly important in the UK energy mix. Earlier this year, our colleagues at Solar Power Portal spoke to Trevor Wills, CEO of BESS developer Pulse Clean Energy, who said that “the use case for storage will only continue to grow in importance over the years ahead,” as greater renewable energy penetration will necessitate more BESS deployments to make best use of this electricity and deliver a robust energy system.
The news follows a number of project advancements around the world for European Energy, including the installation of modules at the Winton North solar project in Australia in May. However, the company has also divested from a number of its projects in mainland Europe, including a 470MW solar-wind-storage project in Lithuania and a 151MW solar PV project in Italy.
