Alcemi

The battery boost

Copenhagen Infrastructure Partners is working on a portfolio of battery storage facilities in the UK with local partner Alcemi. The projects will ease the congestion of energy transmission, enabling future increases in renewable capacity, lowering consumer costs, and opening up new investment opportunities.


There’s plenty of wind in Scotland and a large and growing fleet of Scottish offshore and onshore wind farms produces significant amounts of green electricity. However, a large part of the demand is located much further south, particularly around London, in the Midlands and the southeast of England. And getting the power to where it’s needed is no simple task, given the limited capacity across existing and planned north-south transmission lines.

A new partnership between Copenhagen Infrastructure Partners (CIP) and Alcemi, a company backed by the leading UK sustainable energy funder Susgen, will help address that problem. The partnership covers the develop- ment of a portfolio of large-scale battery energy storage projects across the UK, supporting the integration of renewable energy capacity and the transition to net zero by 2050.

There are windy hours and days in Scotland when the power generated is in excess of the transmission capacity. Currently, a part of that generation is curtailed and lost forever. Instead, a better and more cost-effective alternative is to store that surplus power in batteries and release it when transmission capacity becomes available again. This cost reduction is shared by all consumers in the market, resulting in lower consumer bills.
Changing market dynamics

The portfolio developed by CIP and Alcemi, consisting of seven battery energy storage system projects, represents a significant entry into this market for CIP and addresses an existing and growing grid and dispatchable capacity issue in the UK market. Construction of the more advanced projects in the portfolio is expected to be funded by CIP’s current and subsequent flagship investment funds, Copen- hagen Infrastructure IV and V.

The projects, currently at various stages of development, are some of the largest energy storage projects in Europe, with planned capacities of between 300MW and 500MW each and storage duration of up to four hours.

They are being developed at strategic locations that will support the transmission system by limiting the impact of network constraints, by storing and then releasing excess power to avoid overloading the transmission network, and by providing other ancillary services to the system.

7
battery energy storage system (BESS) projects under development in the UK.
4.3 GW
total energy storage capacity
H2, 2023
First final investment decision expected

This will help reduce the overall energy cost for consumers and lower the carbon intensity of the UK power sector, ensuring better utilisation of the available renewable energy resource and limiting the need for fossil fuel power generation during peak demand. Batteries also mitigate stress events in the system (up to brownouts or blackouts), such as unexpected shutdowns of large power plants, when the system needs rebalancing almost instantaneously.

The most advanced project in the portfolio has secured grid connection capacity as well as the necessary land and is expected to secure planning consent later this year. A final invest- ment decision on this first project is expected in the second half of 2023.

“This technology has been around for some time, in some shape or form. What’s changed is the market drivers and the underlying dynamics for such investments. The market is now much more confident that these complexities will persist and, consequently, the services provided by batteries have become more valuable and longer-dated. As such, we can now contract the revenues from batteries on terms which are interesting to us as infra- structure investors.”
Opening up more opportunities

CIP’s partnership with Alcemi was negotiated bilaterally, outside a formal sale process, based on CIP’s strong relationship with Susgen, the Alcemi shareholder. From both Susgen and CIP, there is significant enthusiasm to work on further projects together.

“This is not just a one-off deal, and it is important to build these relationships like we have with Susgen. They are a respected developer of

early-stage renewable energy projects and know which potential partners are credible and what they can bring to the table. We are now exploring whether we can do further projects together,” Gruescu says. 

CIP has already invested in battery infrastructure in the U.S. and is also looking at several markets in Continental Europe and Australia. Each market has specific characteristics, according to existing infrastructure and regulation, and needs to be judged as such.

“Large-scale batteries will not be the right solution in every single market but the experience in the UK demonstrates that with an appropriate regulatory framework, the market can develop viable structures that lead to projects being developed and operated on a commercial basis. Once the blueprint exists and the value to consumers is proven, other countries will consider such precedent, adapt, and adjust it to the realities of their markets. With our know-how and expertise, we will be ready to pursue similar investments in new markets,” Gruescu says.

With the energy transition dominated by withdrawing fossil-fuelled power sources and replacing them with intermittent renewable energy, we expect other countries to follow this lead. There will be growing demand to increase the system flexibility and reliability, and very few low-carbon technologies can do that as efficiently as batteries.
More information

CIP's Partner on Alcemi

Radu Gruescu 080
Radu Gruescu
Partner at CIP