Yates heads new venture planning $2 billion of battery storage projects in Australia

Former green bank boss and one time political candidate Oliver Yates is to chair a new joint venture company in Australia that plans to spend at least $2 billion rolling out at least seven big battery projects and one solar PV project in coming years.

The new platform, known as Valent Energy, will combine the resources of Hong Kong-based Gaw Capital and European based energy storage developer BW Group.

Its assets, some of them inherited from the Maoneng Group that was bought out last year by Gaw Capital, include the 240MW, two hour Mornington battery in Victoria, the 250MW, two hour Pine Lodge battery near Shepperton in Victoria, and the 120MW, two hour Apsley battery near Dubbo in NSW.

Valent Energy says these three battery storage projects have already obtained approvals and are ready to begin construction this year.

Another three battery projects are going through the planning process, and Valent says it has a total pipeline of 1.6 GW of utility scale battery projects (without specifying the storage capacity), and one big solar project.

This pipeline include some battery projects – in Lismore, Armidale and Tamworth in NSW – initially developed by Maoneng as part of a deal announce five years ago to supply AGL with a total of 200 MW and 400 MWh of battery storage. The solar farm in the portfolio is near Merriwa in NSW.

BW – which has interests in energy and the maritime industry, and a market cap of $11 billion – says it already has a portfolio of more than 1.5 GW of battery projects under development in the UK and Scandinavia, with more than 400 MWh of storage capacity already under construction.

It also has a 32 per cent in Cadeler, which is one of the leading suppliers of installation vehicle for offshore wind projects.

Gaw Capital Partners, a private equity firm and asset manager with $US33.7 billion under management, mostly in real estate, recently bought GMR Energy (formerly Maoneng).

Yates, the founding head of the Clean Energy Finance Corporation who is also the head of climate tech and energy transition for Gaw Capital in Australia, will be chair of Valent Energy.

He says the new venture is particularly encouraged by new government energy policies, such as the Capacity Investment Scheme that will support battery and other storage projects, and the opportunities to soak up excess solar in the grid.

“With the rollout of substantial government policy to support battery projects, and the record periods of negative prices during daytime solar floods, the moment could not be a timelier for Valent to build large scale batteries.” Yates said in a statement.

Yates told RenewEconomy that Australia is a great market for international capital, given its strong policies and the development in the grid.

“With solar so strong in middle of the day, batteries are economically attractive,” he said. “And they are needed to deal with low prices in the middle of the day, and high prices in the shoulder period which is affecting industry.”

He says the initial focus will be on two hour batteries, where the market sweet spot currently lies, although it should be noted that the CIS is framed is support four hour batteries, at least as an average.

The statement from the companies said Gaw Capital and BW ESS will pool their resources in Valent Energy, commit and arrange capital of over AUD$2 billion to build the battery projects, as well as develop and grow the pipeline of development assets.

Christina Gaw, the managing principal and global head of capital markets and alternative investments of Gaw Capital Partners, said battery assets are urgently needed in Australia’s energy transition.

Erik Strømsø, the head of BW Renewables and CEO of BW ESS, said Valent will be “well positioned to accelerate the growth of Australia’s energy storage capacity, enabling its transition to clean energy.”

See RenewEconomy’s Big Battery Storage Map of Australia