Eolian, a developer of energy storage systems, announced that it will construct two interconnected battery facilities capable of supplying 200 MW to the Texas energy market. According to the company, a tax equity investment made possible by the Inflation Reduction Act helped make the project feasible. The resource will include two utility-scale storage projects located on a single site in Mission, Texas.
Participating in the state’s energy market, the company stated that the projects have been “engineered with multiple hours of operational duration to provide critical grid resiliency to the growing communities of the Rio Grande Valley.”
The “pioneering financing” used to develop the project is the first time the investment tax credit structure has been utilized by a utility-scale battery energy storage system, according to a statement from Eolian. Tax equity investment in the project was provided by a fund managed by Churchill Stateside Group, and Eolian was advised by lawyers from Norton Rose Fulbright. Churchill Stateside Group is a provider of real estate financial services that collaborates with investors and developers in areas such as affordable housing, renewable energy, and commercial and multifamily real estate lending.
The Inflation Reduction Act took effect in 2022 and included $369 billion for energy and climate expenditure, as well as an expansion and extension of tax credits for energy storage. According to lawyers from Norton Rose Fulbright, the financing for this project represents the first use of the investment tax credit for a stand-alone energy storage asset since the IRA was passed.
The company noted that 100% of the projects’ revenue is generated through participation in the merchant energy and ancillary services markets, with no contracted off-takers.
The Electric Reliability Council of Texas, where Eolian’s projects will be located, has experienced grid challenges due to rising demand from economic development, a spate of generation retirements, and extreme weather. “The new face of grid resilience is fast and flexible energy storage to fill the gaps when other resources are too slow or fragile to meet the challenge,” said Eolian CEO Aaron Zubaty.