Energy Storage Group Closes Financing for Texas BESS Project

A global developer of grid-scale energy storage projects said it has closed project financing and completed a 10-year offtake agreement for a battery energy storage system (BESS) installation in Texas.

Energy Vault, with headquarters in California and offices in Virginia, Switzerland, and Australia, on July 24 said the $18-million project financing for the Cross Trails project is the latest in a series of moves by the company after equity investments in new “Own and Operate” assets. The Cross Trails BESS, located in Scurry County, entered full commercial operation in June. The project has a decade-long offtake deal with power marketer Gridmatic.

The installation also expects to receive more than $12 million in federal investment tax credit-related funds this summer as part of a previously executed sale agreement.

Energy Vault on Thursday said financing for Cross Trails “delivers an attractive levered IRR [internal rate of return] of ~15% while building on the successful execution of Energy Vault’s ‘Own & Operate’ asset management strategy, following the successful close earlier this year of the $28-million project financing for the Calistoga Resiliency Center microgrid in California.” Energy Vault said it will report a quarterly increase in cash of more than 20% during its second-quarter earnings call on August 7, after an increase of about 60% in the previous quarter.

Project Serves ERCOT Market

Cross Trails is a 57-MW/114-MWh BESS that will serve the Electric Reliability Council of Texas (ERCOT) region. Energy Vault said the installation was completed ahead of schedule, “successfully meeting all construction milestones through effective project management and close collaboration among engineering, procurement, and construction teams.” The project is providing energy and ancillary services to support renewable energy production and improve grid resiliency in ERCOT’s territory.

The offtake agreement with Gridmatic is the “first physically settled revenue floor contract to be signed for a BESS in ERCOT,” according to Energy Vault.

The BESS leverages Energy Vault’s fully integrated solution stack of hardware, software, and service offerings. Cross Trails also serves as the first deployment of Energy Vault’s second-generation B-VAULT AC product, enabling Energy Vault to deliver the system quickly and at low cost while also providing higher levels of system availability in the ERCOT region. The system is equipped with Energy Vault’s VaultOS Energy Management System to control, manage, and optimize the BESS operations.

“The successful financing of our Cross Trails BESS project represents another significant milestone in executing our ‘Own & Operate’ strategy, delivering strong returns that will generate predictable, high margin and recurring revenue streams,” said Robert Piconi, chairman and CEO of Energy Vault. “Following our recent Calistoga Resiliency Center project financing and the acquisition of the 125-MW/1-GWh Stoney Creek BESS in Australia, this latest financing close demonstrates our ability to attract premium financing partners while building a diversified portfolio of attractive energy storage assets across the globe. With an attractive mid-teen levered IRR and a 10-year offtake agreement in place, the Cross Trails BESS is another example of our commitment to creating long-term shareholder value through strategic energy storage asset ownership and operation in key growth markets.”

Agreement With Gridmatic

“Energy Vault’s proven expertise and ability to develop and deploy world-class reliable, and cost-effective energy storage solutions makes them a perfect partner for Gridmatic,” said Max Wytock, Gridmatic’s CEO, in a statement. “This BESS will deliver increased grid reliability and affordability for Texas residents as load growth continues to accelerate. We look forward to a strong partnership with Energy Vault for years to come.”

Today’s announcement marks the second close of project financing for Energy Vault projects, coming on the heels of the successful close of $28 million in financing for the company’s Calistoga Resiliency Center project in California. The financing also follows Energy Vault’s announced acquisition of the 125-MW/1,000-MWh Stoney Creek BESS in the Australian market.

Energy Vault on Thursday said the company has a “robust pipeline of projects in development” within the company’s “Own & Operate” strategy, with a “long-term vision for generating predictable, recurring and high margin tolling revenue streams with the goal of delivering sustainable, long-term value to shareholders.”

—Darrell Proctor is a senior editor for POWER.