Dive Brief:
- 8minute Solar Energy announced on Tuesday a long-term equity partnership with a global private asset management firm for the development of the largest U.S. energy storage and solar project, expected to be completed in 2023.
- While financial details of the transaction remain undisclosed, Capital Dynamics' Clean Energy Infrastructure business invested through equity financing and acquisition in the southern California project, which will deliver 400 MW solar and 300 MW/1200 MWh energy storage to the Los Angeles Department of Water and Power (LADWP).
- The project proposal, which was finalized in November as part of a competitive procurement process, boasts a fixed cost under $0.02 per kilowatt-hour of solar, a record low price at the time according to Los Angeles Mayor Eric Garcetti. 8minute had assumed the cost for the planning, development and operation of the project.
Dive Insight:
Capital Dynamics' investment in the Eland Solar and Storage Center is the firm's second deal with 8minute this year.
On Jan. 9, Capital Dynamics announced its acquisition of 8minute's 300 MW solar project outside of Las Vegas, expected in operation by the end of 2021. Eland is the third solar-plus-storage plant in Capital Dynamics' clean energy infrastructure portfolio.
The news comes at the same time as clean energy research firm Mercom Capital's report on corporate funding in the clean energy sector, which concluded lithium-ion battery projects dominated global venture capital, debt and public market source investments in 2019. According to Mercom, storage projects have a relatively high reliance on VC funding, while debt financing plays a larger role in the global solar sector.
For its part, 8Minute sees the Capital Dynamics partnership as a key step in moving the Eland project forward.
The asset management firm brings "significant financial resources for construction to the table," Tom Buttgenbach, 8minute president and CEO, said in a statement.
The project, selected from a pool of 130 proposals due to scale and price, will help the city reach 100% renewable power by 2045, according to the LADWP Board of Commissioners. Glendale Water and Power will receive 12.5% of the output from the solar and battery storage project, as part of a joint investment.
Initial construction has already commenced on Eland, located 70 miles north of Los Angeles, and the first of two phases is expected to begin operations in 2022.
8minute and Capital Dyamics did not respond to requests for comment.
