'The new face of grid resilience' | Eolian locks up backing for US energy storage flagship

A fund managed by Churchill Stateside, a Florida real estate financial services group, provided the undisclosed sum of tax equity investment in the interconnected Madero and Ignacio energy storage stations under construction near the border with Mexico.

Together said by Eolian to represent the “world’s largest fully-merchant battery energy storage facility as measured by total deliverable energy”, the two projects are slated to ramp up to full commercial operations later this year.

Norton Rose Fulbright, which advised Eolian, said Madero and Ignacio will also generate revenue through participation in the ancillary services market for the Electricity Reliability Council of Texas, which manages flow of power for 90% of the state’s power load.

“The new face of grid resilience is fast and flexible energy storage to fill the gaps when other resources are too slow or too fragile to meet the challenge," said Aaron Zubaty, CEO of Eolian, which a portfolio company of New York City-based Global Infrastructure Partners.

He noted Ercot has struggled in recent years to meet demand during critical hours “when thermal power plants require maintenance or when renewable energy production drops”.

The state’s torrid economic and population growth shows no sign of slowing and power generation fleets continue to age.

The Inflation Reduction Act, which President Joe Biden signed into law last August, includes $369bn of funding for climate-related spending and clean energy tax credits.

The ITC is worth 30% of capital investment if new apprenticeship and wage requirements are met, while projects are eligible for a 10% bonus for using certain domestic content such as steel and another 10% bonus if located in fossil fuel brownfield sites. These would increase ITC value to 50%.