Energy storage developer Plus Power said it closed a credit facility for its 185 MW/565 MWh Kapolei Energy Storage (KES) project, which is under contract with Hawaiian Electric.
Financing includes $188 million in non-recourse construction debt and $31 million in letters of credit. Mizuho Securities USA LLC and KeyBank led the financing, and were joined by Silicon Valley Bank and CoBank.
Plus Power said the financing serves as a “strong signal” of capital market support for standalone energy storage projects.
KES received approval from the Hawaii Public Utilities Commission in May, and construction is slated to start later this year.
The lithium-ion battery project will be located on eight acres in an industrial area, where it will interconnect with a Hawaiian Electric substation. The project will provide load shifting and fast-frequency response services to Hawaiian Electric, enhancing grid reliability and accelerating the integration of renewable energy. The project is planned to enter service in June 2022 in advance of the closing three months later of the island’s last coal-fired power plant, which is owned by AES.
The KES project is intended to have a lifespan of at least 20 years. The original battery systems are anticipated to operate for at least 15 years. As the original system degrades over time, plans call for KES to be augmented with supplemental battery storage units. At the end of the project’s operating life, KES is required to remove the battery system and restore the land to pre-existing conditions. Plans call for the system to be shipped off-island for recycling and salvage.
Utility regulators last spring backed off of several conditions they earlier had imposed on the energy storage project. Regulators had imposed operational and financial conditions that drew objections from Hawaiian Electric, which said that without changes it would have been “nearly impossible” for the project to move forward.
In their modified decision, regulators said they had voiced concerns about the BESS on several occasions, particularly when it came to the utility’s plans to charge the battery with fossil-fueled generation in both the short- and long-term, as well as the utility’s ability to deliver benefits to its customers.
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