Fengate, AOP Secure Funding for California Battery Project

• Fengate Asset Management and Alpha Omega Power seal a groundbreaking tax equity deal for Caballero, a 100-MW battery storage system fueling 100,000 homes with on-demand energy.

Fengate Asset Management and Alpha Omega Power (AOP) have finalized a tax equity deal to fund a 100-MW/400-MWh battery energy storage system (BESS) project, named Caballero, located in San Luis Obispo County, California. The financial commitment was provided by Bancorp Impact Finance, a subsidiary of US Bank. The project is set to be operational early next year, supplying on-demand power to over 100,000 homes for up to two hours during peak demand.

The Caballero project marks the first investment under the partnership established last year between Fengate and AOP, focused on developing and operating BESS projects. They acquired the project from Origis Energy and secured construction and term debt financing through MUFG Bank. Greg Calhoun from Fengate expressed optimism about expanding their portfolio of BESS projects in collaboration with AOP.

What are the key details and implications of the Caballero battery storage project?

Here are the key details and implications of the Caballero battery storage project:

• Size and Capacity: The Caballero project features a capacity of 100 megawatts (MW) and can store up to 400 megawatt-hours (MWh) of energy, making it one of the significant battery storage systems in the region.
• Location: Situated in San Luis Obispo County, California, the project is strategically placed to serve a growing demand for renewable energy storage and support California's ambitious clean energy goals.
• Energy Supply: Once operational, the battery storage system will have the capability to provide on-demand power to over 100,000 homes for two hours during peak demand periods, helping to stabilize the grid and reduce reliance on fossil fuel-based energy sources.
• Economic Impact: The project is expected to create jobs and contribute to the local economy during the construction and operational phases. It underscores the growing trend of utilizing battery storage to bolster economic opportunities in renewable energy.
• Partnership: The project represents the first collaboration between Fengate Asset Management and Alpha Omega Power (AOP) following their partnership to develop and operate battery energy storage systems (BESS). This partnership is positioned to expand further in the burgeoning renewable energy sector.
• Financial Backing: The tax equity deal secured with Bancorp Impact Finance, a subsidiary of US Bank, highlights the increasing interest from financial institutions in supporting renewable energy projects, which may encourage further investments in similar projects across the country.
• Acquisition and Financing: The acquisition of the Caballero project from Origis Energy and securing construction and term debt financing through MUFG Bank reflect newcomers’ confidence in battery technology as a viable and necessary component of the energy landscape.
• Grid Resilience: The implementation of battery storage systems like Caballero is vital for enhancing grid resilience, particularly in states like California, which face challenges with electricity supply due to extreme weather conditions and an aging grid infrastructure.
• Environmental Benefits: The use of battery storage contributes significantly to reducing greenhouse gas emissions by allowing for the storage of excess renewable energy generated during off-peak times, providing cleaner energy alternatives during high-demand periods.
• Regulatory Environment: The project is indicative of California's regulatory framework that encourages the integration of energy storage technologies, aligning with the state’s objectives to reach 100% clean energy by 2045.
• Future of Battery Storage: The success of the Caballero project could set a precedent for similar initiatives, demonstrating the viability of large-scale battery storage as a solution to the growing renewable energy integration challenges and promoting further advancements in energy technology.

Overall, the Caballero battery storage project serves as a significant development within the renewable energy sector, combining innovative technology with strategic partnerships to enhance energy supply and sustainability.