Neoen has completed financial close for two new batteries with a total capacity of 11 MW / 8 MWh that will provide primary and secondary reserve services for its Capella (140 MWp) and Providencia (101 MWp) solar plants, in the departments of Usulután and La Paz, respectively. This additional capacity will take the total power of Neoen’s batteries in El Salvador to 14 MW and total storage capacity to 10 MWh, positioning Neoen as the largest operator of batteries in Central America.
The non-recourse debt for the batteries will be provided by IDB Invest, with the resources from the Canadian Climate Fund for the Private Sector of the Americas – Phase II (C2F2). The repayment schedule of the financing is linked to the operational savings the batteries will generate for the two solar farms. In line with its business model, the company will retain 100% ownership of the assets.
The consortium comprising TSK Electrónica and Gensun was chosen for the engineering, procurement and construction (EPC) of the batteries. Construction has already commenced, with commissioning scheduled for the second quarter of 2022. The batteries’ millisecond response time will boost the quality of the primary and secondary reserve services, improving the stability and reliability of the electrical grid. The batteries will also reduce CO2 emissions by an estimated 5,000 metric tonnes per year, avoiding the use of fossil fuel power plants for ancillary services.
Neoen has been present in El Salvador since 2014 and has invested around US$300 million in solar farms and storage facilities. This latest development increases its total capacity to 255 MW. Neoen’s plants are currently the largest in Central America. They supply 7% of demand from the wholesale market and provide the most competitive energy in El Salvador.
Paolo Cartagena, Managing Director of Neoen in El Salvador, said: “Our local roots and history in El Salvador have allowed us to provide increasingly relevant solutions. We firmly believe the batteries are the perfect addition needed to catalyse the growth of renewable energy in El Salvador. We are grateful for the support of C2F2 and the IDB Group in achieving this shared goal.”
Gian Franco Carassale, Chief, Infrastructure and Energy Division, of IDB Invest, commented: “The financing of the batteries for the Capella and Providencia solar farms represents a major milestone for the Salvadoran electricity market, providing an innovative solution to meet reliability requirements. These storage systems will also improve the operational efficiency of both solar energy plants, positioning Neoen – one of our strategic clients in the region – at the cutting-edge of the application of technologies that increase the penetration of renewable energy.”
Xavier Barbaro, CEO and Chairman of Neoen, concluded: “I would like to congratulate the Neoen team in El Salvador for this new project, which showcases our expertise in integrating storage systems into our solar farms. We have been present in El Salvador for over seven years now and we are proud to keep on contributing to its energy transition. Our local presence and global expertise provide a solid platform for our ambitions to expand further in Central America.”
Image source: Courtesy of Neoen
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