Intersect Power, LLC, has announced the successful closure of two distinct financial agreements totaling US$837 million.
These funds will facilitate the construction and operation of three independent Battery Energy Storage Systems (BESS) in Texas.
The transactions encompass a diverse range of financing, including construction debt, tax equity, and term debt, secured through partnerships with prominent industry players.
Three BESS Projects to Boost Grid Flexibility
All three BESS facilities – Lumina I, Lumina II, and Radian – are slated to commence operations in 2024. Each project will feature 86 Megapacks, Tesla’s advanced battery energy storage solution.
Notably, Lumina II and Radian will be managed by Autobidder, Tesla’s real-time energy trading platform. Remarkably, these projects will progress from concept to commissioning in less than 12 months, with each site offering a capacity of 320 MWh of battery storage with a two-hour duration.
These batteries will substantially enhance the flexibility of Intersect’s operational portfolio in Texas, which currently boasts 1.2 GWp of solar power coupled with 1 GWh of battery storage.
Strategic Investment in Energy Storage
Sheldon Kimber, CEO and Founder of Intersect Power, emphasized the importance of batteries in the energy transition, stating, “Batteries will play a crucial role in the energy transition and perfectly complement the billions of dollars invested in solar generation that we are developing in California and Texas.
These assets should enable us to deliver more stable financial performance from a diversified portfolio of renewable generation and storage, capitalizing on increased market volatility and periods of high prices while mitigating risks during low-price periods.
This stability will be essential as we anticipate tripling the size of our portfolio in the next three years.”
Collaboration with Leading Financial Partners
Morgan Stanley was chosen to provide tax equity, while funds and accounts managed by HPS Investment Partners will contribute to construction debt and term debt investments.
Deutsche Bank is partnering in the construction debt facility and providing operational letters of credit to the projects. The projects are eligible for Investment Tax Credits under the Inflation Reduction Act.
Partnerships Driving Innovation and Reliability
Jorge Iragorri, Managing Director and Head of Renewable Energy Investments at Morgan Stanley, expressed pride in partnering with Intersect Power, highlighting their commitment to bringing innovative and scalable low-carbon solutions.
He emphasized the significance of these standalone batteries in enhancing grid reliability and energy security as the US transitions towards a low-carbon economy.
Michael Dorenfeld, Managing Director at HPS Investment Partners, echoed this sentiment, stating that HPS is pleased to partner with Intersect Power once again, supporting their successful deployment of large-scale clean energy assets.
He commended Intersect Power’s market leadership and innovative approach to contracting and financing, and looks forward to continued collaboration in delivering infrastructure that contributes to decarbonization.
Jeremy Eisman, Managing Director and Head of Infrastructure and Energy Financing at Deutsche Bank, expressed satisfaction in supporting Intersect Power in the rapid construction and deployment of these utility-scale battery storage systems in Texas.
He highlighted the financing’s role in facilitating Intersect’s contribution to the reliability of the US power grid and reiterated Deutsche Bank’s commitment to supporting leading developers in the sector.
Legal and Advisory Support
Intersect and its partners were represented by various legal counsel and advisors in these deals, including Orrick, Herrington & Sutcliffe LLP as lead counsel for Intersect Power, CCA Capital LLC for tax equity transactions, Willkie Farr & Gallagher LLP for Morgan Stanley Renewables Inc., and Skadden, Arps, Slate, Meagher & Flom LLP for HPS and Deutsche Bank.