Hecate Grid lays out storage development plans following completion of Johanna facility

Hecate Grid has big plans in the coming years after completing its 20 MW/80 MWh Johanna energy storage system (ESS) earlier this month.

Hecate Grid, a joint venture between Hecate Energy and InfraRed Capital Partners, signed contracts to build 105 MW of energy storage projects next year in Riverside County, California and is looking to get another 1.5 to 2.5 GW of new projects online in 2023 and 2024.

This comes as demand for standalone storage continues to escalate particularly in California and in ERCOT. The likes of Southern California Edison (SCE) and Clean Power Alliance (CPA) have increased the search for storage resources to combat electric power shortages and to replace capacity from the retirement of old thermal plants.

The extremely cold weather in Texas in February 2021 accelerated the demand for resources to combat intermittency. Interconnection applications for Storage projects, totaling over 35 GW of capacity, are registered in the ERCOT queue, according to NPM data. Hecate is linked with seven of those project applications.

“Initially in ERCOT, the opportunity was a short duration ancillary services play, but as the market has more intermittent resources and regulations have evolved in the aftermath of the February event, longer duration systems are becoming more relevant,” said Gabe Wapner, VP Business Development at Hecate Grid, in an interview with NPM.

Hecate Grid was established in 2018. Both Hecate Energy and Hecate Grid share the same executive teams, but Hecate Grid is funded with the InfraRed investment. Aside from Texas and California, Hecate Grid also views the state of New York as a market. Hecate is utilizing four-hour batteries in its projects, as is the case with Johanna, but they are also exploring longer duration opportunities.

Hecate Grid is focused exclusively on a subsector which stands apart from other renewable developers in that its comfortable taking on merchant risk, as both the technology continues to evolve and as demand surges. Typically wind and solar project developers lock in longer-duration power purchase agreements (PPA) before tapping project finance market for funding to build projects. The Johanna ESS has a 10-year resource adequacy contract with SCE for 10 MW and a 2-year resource adequacy agreement with CPA for 5 MW, so it is not fully contracted and there is a bigger merchant tail coming up in the short term.

“The industry is locational specific and projects can be fully merchant at the right node and in the right market,” said Wapner.

Moving forward, Wapner said Hecate Grid is capitalized to be both a developer and owner of the assets. Hecate Grid is well capitalized to fund its own projects, but it is also evaluating “project finance opportunities” on future projects.*

*This story was originally published exclusively for NPM subscribers earlier this month