Innergex Renewable Energy Inc. has secured a $49.5 million non-recourse construction financing with SMBC for the San Andrés battery energy storage project in the Atacama desert in Northern Chile. The project has a storage capacity of 35 MW/175 MWh (5 hours) and is located on the site of Innergex's existing San Andrés solar facility. The project is scheduled to be commissioned in 2023.
“With both the San Andrés and Salvador battery projects advancing construction, we expect to add a total of 425 MWh of storage to our assets in Chile by the end of the year,” said Michel Letellier, President and CEO of Innergex. “We are very proud of our growing storage portfolio as we believe energy storage is an essential complement to renewable energy.”
Innergex is committed to the development of storage facilities across our different markets, either in addition to existing assets to add more flexibility and reliability or as stand-alone facilities to ensure grid resiliency.”
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The San Andrés battery project is Innergex's second utility-scale project under construction in Chile, and both projects are expected to be commissioned in 2023. The project will feature Mitsubishi Power's Emerald Storage Solution and will dispatch the renewable energy produced by the solar facility and stored during the day to evening hours to benefit from peak prices and avoid daytime congestion.
The total construction costs of the San Andrés battery project are estimated at $61.9 million and will be mainly financed with a $49.5 million 2-year non-recourse bridge loan. The project will benefit from capacity payments, which represent an important component of the battery energy storage system overall revenue stream.
“Chile has recently approved new legislation on energy storage and electromobility that promotes and recognizes the valuable contribution of energy storage projects to grid reliability,” said Letellier.
In addition to the stable and predictable revenues generated through capacity payments, the project will dispatch and sell the stored renewable energy on the merchant market at times of greater demand, enabling the facility to support the grid upon energy peak demand and optimize the project's returns.
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The San Andrés battery storage facility is expected to generate annual revenues of approximately $8.0 million in its first full year of operation, while operating, general and administrative expenses are expected to reach $0.4 million during the same period.
As a leader in renewable energy, Innergex is committed to ensuring energy storage is a vital component in the journey to a greener future. The company is confident that the San Andrés battery energy storage project will play a significant role in achieving this objective.
