Independent renewable energy company RES will manage the 500MW/1GWh Coalburn battery energy storage system (BESS), which set to become one of Europe’s biggest.
The Coalburn BESS facility is under development by Copenhagen Infrastructure Partners (CIP) and Alcemi at a former coal mining site in Lanarkshire, Scotland.
Under an agreement signed between the two, RES will be responsible for the site’s asset management.
The site is being built in two phases, with the first, the 500MW Coalburn 1, expected to come online later this year. Coalburn 2, which will make up the remaining 500MW capacity, is expected to follow in 2027.
When the 2-hour duration Coalburn 1 is commissioned, CIP will divest a 50% ownership stake to alternatives investor AXA IM Alts. SSE Energy Markets will optimise both BESS assets.
Coalburn will be one of the largest BESS assets in RES’ global services portfolio, which the company states currently includes over 43GW of wind, solar, storage and green hydrogen across 1,300 sites worldwide.
CIP has a third 500MW BESS project in Scotland, the Devilla project near Fife.
With the amount of wind generation in and around Scotland, it is an attractive area for BESS assets as grid constraints make it difficult to transport high amounts of generation elsewhere and on days when wind generation is high, the power plants are paid to switch off in order to not overwhelm the grid.
Investors were broadly relieved last week to hear the news that the government will not go down the route of establishing zonal electricity markets across the UK.
This could, in theory, have reduced curtailment costs in Scotland and prevented the need for transmission buildout. However, it would have made investment in Scotland riskier for developers, who would stand to profit less from selling electricity, which in areas with high generation like Scotland would be at a much lower price.
Instead, the government will deliver a Reformed National Pricing Delivery Plan, leaning heavily on reforming Transmission Network Use of System (TNUoS) charges, the Strategic Spatial Energy Plan (SSEP) commissioned from the National Energy System Operator (NESO) and battery energy storage.
Speaking to Energy Storage News before the decision, CIP’s UK commercial director Malcolm Patterson said that, although a phased approach to market reform was preferable, the economics of monetising BESS mean that market rearrangement would have relatively minor financial implications for storage. The full conversation is available with premium access to Energy Storage News.
CIP has agreed a 15-year Capacity Market agreement for Coalburn 1.
