Quinbrook Infrastructure Partners (Quinbrook), a global investment manager specialising in lower carbon and renewable energy infrastructure, has acquired an 84 Megawatt (MW) gas-fired power project portfolio located across 4 sites in England and Wales.
Quinbrook plans to invest over USD60 million to acquire and construct the projects, which will become revenue-generating over the next twelve months. This latest investment marks the founders’ return to the United Kingdom’s clean energy infrastructure market and is the maiden investment in Quinbrook’s UK low carbon power platform.
Quinbrook acquired 100 per cent of the fully permitted and construction-ready 84 MW Eider Reserve Power portfolio for GBP4.6 million and plans to invest a further GBP40 million (USD53 million) in cash to construct and install the four projects, which are ideally located in close proximity to both gas and power grid connections. Three of the projects have secured 15 year fixed price, inflation escalated capacity contracts. This latest acquisition grows Quinbrook’s investment portfolio to more than USD3 billion of committed and planned projects, diversified across onshore wind, distributed gas, utility scale solar and flexible peak power generation in the US, UK and Australia.
According to Energy UK, the Trade Association for the nation’s energy industry, renewables already produce more than 20 per cent of the UK’s electricity. That figure is expected to increase to 30 per cent by 2020 and will continue to be dominated by intermittent renewable sources such as wind and solar PV.
“The rapid growth of intermittent renewables, such as wind and solar, in the UK energy mix has led to an urgent need for flexible and ‘dispatchable on demand’ generation assets, such as the Eider portfolio, that can respond immediately when needed by the grid and ensure the lights stay on,” says Rory Quinlan, Co-Founder and Managing Partner of Quinbrook.
“This gas engine technology is efficient, reliable and well proven. The Quinbrook team that will oversee the construction and operation of the sites has substantial experience working on similar projects in the UK market. We are excited to return to the UK power market in which we started investing decades ago. Our Quinbrook team is well-positioned to generate attractive risk-adjusted returns for our investors through smart distributed power and storage solutions that enjoy long-term contracted revenues with investment grade buyers.”
The key services that can be provided by the Eider gas engines include fast reserve generation – the ability to generate power within two minutes – and Short Term Operating Reserve (STOR), which can produce standby or emergency power when required. Demand for STOR generation capacity alone is expected to grow by 59 per cent by 2030 and increase at least 3 per cent per year for the next two decades.
Quinbrook’s latest investment in Eider follows prior successes by the firm’s founders and senior leadership team in developing, over the course of a decade, one of the largest gas engine fleets in the UK market for Novera Energy PLC through 2010. The same senior team also led the establishment of the Red Rose Infrastructure gas engine portfolio for the Local Pensions Partnership from 2011 through 2015.
