Northland Power has announced the successful financial close of a notable energy storage project in Ontario, Canada. The Oneida energy storage project, situated in Southern Ontario, has secured all the required financing for its development.
The project is a collaborative effort between Northland Power, NRStor, Six Nations of the Grand River Development Corporation, and Aecon Group, with Northland Power holding a 72% ownership stake. Oneida, a 250MW/1000 megawatt hour capacity battery located in Haldimand County, marks Northland Power's initial venture into the energy storage sector.
Northland Power intends to explore additional opportunities within the Ontario market, as well as other key markets, in order to expand its portfolio of battery energy storage projects. The project is expected to commence full commercial operations in 2025.
Mike Crawley, President and Chief Executive Officer of Northland Power, expressed his enthusiasm, stating, “Oneida provides Northland with a significant presence and growth potential in Ontario. We will explore further development prospects in the energy storage sector, aligning with our overall goal of expediting the global clean energy transition.”
The total cost of the project is estimated to be approximately C$800 million ($600 million). Consistent with Northland Power's financing strategy, the majority of the construction costs, around 75%, will be funded through non-recourse project-level financing. Northland Power's equity component will be covered by its existing cash reserves and available liquidity from its revolving credit facility.
The external lender has fully committed to providing the necessary debt for the project, in the form of a non-recourse construction and term loan, matching the duration of the capacity contract. Additionally, Natural Resources Canada (NRCan) has provided funding through the Smart Renewables and Electrification Pathways program, recognizing the project's potential to reduce greenhouse gas emissions. The remaining costs will be financed through contributed equity from the project's various partners.
The Oneida project will benefit from a 20-year capacity contract with the Independent Electricity System Operator (IESO) in Ontario. Contracted revenue will account for approximately 60% of the total revenues, while the remaining revenue will be generated through the operation of the battery in the wholesale market.
