INTERVIEW: Apex discusses the growing role of storage in its US pipeline

Apex Clean Energy’s new JV with South Korean developer SK, along with its own internal storage development, has pushed the technology to make up 20 percent of its overall pipeline.

In an interview with NPM, Apex’s Senior Director of Marketing and Communications Cat Strumlauf said storage development at Apex was now up to 13 GW nationwide out of its overall 65 GW portfolio.

Strumlauf says the company is painting with a wide brush in terms of geography with projects in the works in ERCOT, MISO, SPP, PJM and WECC. NPM Data is currently tracking Apex’s interconnection positions with projects listed in Texas, Arkansas, Illinois, Louisiana, Indiana, Wisconsin, Mississippi, Ohio, and Virginia.

California is notably excluded from this list. When asked whether market saturation was playing a role there, Strumlauf said the attractiveness of storage projects is “very location-specific rather than market-specific.”

“While in some areas, saturation may make additional projects less attractive, in other areas saturation is not as impactful,” Strumlauf said.

Despite the scope of its storage pipeline, Strumlauf has also disclosed Apex has not spun up an internal storage-specific development team. Instead, she says all storage projects are being developed, financed, constructed, and operated by the same team that works on the company’s other greenfield renewable energy projects.

But that does not mean the company is not pursuing other vehicles to advance its storage portfolio. The company has formed a joint venture called SA Grid Solutions with SK Gas and SK D&D, two Korean developers of gas and renewables respectively, to further its storage pipeline in the US; the venture is focused exclusively on developing storage projects.

Strumlauf says the JV was formed last year, though it wasn’t announced until January 2024. The venture is funded 60% by SK and 40% by Apex, which will manage the construction and subsequent operations of all projects developed through the venture.

100 MW/200MWh Great Kiskadee storage in Texas has been announced as the first project developed through the SA Grid Solutions partnership with at least one other project described as having a “similar size and duration” on the way in an undisclosed location.

Apex announced last week it had secured financing for Great Kiskadee along with its solely owned 100 MW Angelo Storage project, also sited in Texas, through a USD 150m financing from First Citizens Bank and Bank United. Both projects are expected to reach COD by the end of 3Q24.

As to whether other partnerships like this one with SK are in the works, Strumlauf would only say Apex is keeping the door open.

“We are open to fully owning facilities, partnering with other owners, or selling projects outright, depending on what makes the most sense on a case-by-case basis,” Strumlauf said.

While she does not note any other specific JVs in the works, Strumlauf does note that Apex has “ongoing dialog with a number of lenders” to gauge interest in backing further battery storage development. She adds the firm is also exploring newer contracting options, including tolling agreements, in “certain markets.”

Some key offtakers in Texas are notably becoming attached to this offtake structure. Hatch has hosted two storage tolling RFPs seeking hundreds of MW and Austin Energy has outlined the tolling structure as a requirement for its ongoing renewable RFP and likely upcoming storage-specific solicitation later this year.

Other storage developers active in Texas, namely Key Capture Energy, have disclosed to NPM this year that they plan to ratchet up activity in the state’s M&A market. But while Strumlauf says Apex is open to picking up projects this way, specifically highlighting the Bonanza Solar and Storage project the firm acquired from Hecate last year, she says the team’s core will remain on originating its own projects in-house.

*This story was originally published exclusively for NPM subscribers last month.

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