The company will construct and aggregate nearly 14,000 distributed energy storage systems for three states in the US
Swell Energy, a US-based distributed energy and grid solutions provider, has created a financing vehicle for supporting up to $450m of investment for its virtual power plant (VPP) portfolio.
The company intends to construct four virtual power plants with more than 200MWh of distributed energy storage, which will be paired with 100MW of solar photovoltaic (PV) power capacity.
Swell Energy said that it has been commissioned by utilities in three US states to set up more than 200MWh of dispatchable energy capacity by constructing and aggregating nearly 14,000 solar energy generation and storage systems.
The systems will be planned to provide grid services to the three utilities and the local grid.
The company has created the financing vehicle in partnership with a fund managed by the Infrastructure and Power strategy of Ares Management and Aligned Climate Capital.
Ares Infrastructure and Power co-head Keith Derman said: “Our coordinated investment in Swell’s 200MWh Utility VPP portfolio signifies an evolution in how we think about funding power plants across the U.S.
“Swell has demonstrated our long-held belief that energy storage is an asset class that holds great value for homeowners, utilities, and investors.”
Swell Energy expects its existing virtual power plant portfolio to produce more than 3,000GWh of clean solar energy over the next 20 years.
During the same period of time, the company’s customers are expected to possibly store 1,000GWh for later use, and dispatch more than 200GWh of the stored solar energy whenever needed by the utility for capacity.
Swell Energy CEO Suleman Khan said: “Utilities are increasingly looking to distributed energy resources as valuable ‘grid edge’ assets.
“By networking these individual homes and businesses into virtual power plants, Swell is able to bring down the cost of ownership for its customers and help utilities manage demand across their electric grids.
“By receiving GridRevenue from Swell, customers participating in our VPP programs pay less for their solar energy generation and storage systems, while potentially reducing the risk of a local power outage, and keeping their homes and businesses securely powered through any outages.”
The company expects to begin delivery of energy capacity and grid services for its first utility virtual power plant on 1 January 2021.
The contracted capacity across its virtual power plant portfolio is anticipated to move up to 200MWh of energy storage by mid-2023.