Strata Clean Energy, a developer-operator, has recently finalized a significant financing deal worth $559 million for its Scatter Wash BESS project in Arizona, USA. This project, which began construction last month, features a substantial 255MW/1,020MWh battery energy storage system (BESS) located near Phoenix.
The funding package includes both debt and tax equity investment. Prominent financial institutions such as J.P. Morgan, Nomura, The Korea Development Bank, Norddeutsche Landesbank, CoBank, Siemens, Regions, and U.S. Bancorp Impact Finance have participated, with the latter also being the principal tax equity investor. This investment was made viable partly due to the clean energy investment tax credit (ITC), which has been applicable to standalone energy storage since the commencement of the Inflation Reduction Act.
The Scatter Wash project is scheduled to become operational in April 2025. It will supply energy to Arizona Public Service under a 20-year tolling agreement, which was signed in May 2023. In tolling agreements, the developer-operator retains ownership of the project but agrees to provide all its energy to another entity.
Arizona has become a hub for large-scale storage projects, driven by these long-term agreements. Although California and Texas lead in storage deployment, Arizona is rapidly catching up. Over the past year, Energy-Storage.news has covered various projects by companies like Enlight, Longroad Energy, NextEra, and Recurrent Energy in Arizona, with capacities ranging from 400MWh to 1,200MWh. These projects, mostly four-hour duration systems, are designed to extend solar energy availability into the evening hours and have secured long-term agreements with local utilities.
Looking ahead, Solar Media, the publisher of Energy-Storage.news, will organize the 5th Energy Storage Summit USA in Austin, Texas, on March 19-20, 2024. This event will feature industry leaders discussing strategies to accelerate energy storage market growth in the U.S. For more details, interested parties can visit the event’s website.