Landscape

Lower 48 Energy is a independent pure play BESS 'originator to operator' offering unique investment opportunity.

Introduction

BESS is a Green Generation Enabler, whose presence in the market place enables energy storage at times of the day when there is an excess of capacity and lack of demand. The presence of BESS on the Grid will alleviate curtailment & the associated cost.

Lower 48 Energy seeks to capitalize on the growing intraday volatility in the power market by developing and deploying BESS assets at strategic locations in the UK and by maximizing revenue through participating in different potential markets via battery optimisers.

Lower 48 Energy has positioned itself at every stage of a project’s life cycle, from project identification, development, design, and deployment to post-construction operation.

Our ambitions are global, and we are looking at a range of markets including in Europe and beyond where we believe there is significant potential to make an impact.

We benefit from the support of our Investors and Partners:

Action Group Holding

Action Group Holdings is a Kuwaiti based, family owned conglomerate diversified into various business divisions, including Oil Services, Energy Trading, Investments, Real Estate, IT, Construction and Logistics.

Charles Kendall Group

Charles Kendall Group was founded in 1946 and employs over 400 staff globally, owning and controlling over 30 companies. We have negotiated Charles Kendall Group’s support to provide a Turnkey Back Office support to include all Finance, Accounting, Office Rental and HR services. This enables Lower 48 Energy to focus entirely on developing BESS assets.

Opportunity

There will be huge opportunities for investors. The critical success factors are adaptability, insight and timing.

Each BESS project offers investors an attractive opportunity to earn unleveraged returns between 12-15% per annum.

Returns from BESS are generated across multiple revenue streams, are not dependent on any subsidies and are independent of wholesale power prices.

Competitive Landscape

Prior to 2022 the primary barrier to entry in the UK’s Battery Energy Storage Systems (BESS) market was access to capital. The result of which has seen continual consolidation as well as portfolio acquisition by a small number of Investment Funds.

These constraints have seen a small number of UK players working actively to bring BESS sites ‘on line’ and then rapidly disposing of these assets at a healthy premium to Investment Funds who then hold them long term. The developers then redeploy their funds in building out a subsequent pipeline. These assets are generally operated by third party energy traders (BESS Optimisers), who provide route to market to the assets and charge 6-7% of gross battery revenue for providing those services.

In the UK market, the majority of utility scale battery assets have been developed by the likes of Noriker Power, Anesco, Zenobe, RES to name a few.

Upon commissioning these assets are offloaded to listed Investment Funds at a premium. Investment Funds such as Gresham House PLC are the biggest player in the space and have accrued 425 MW of installed capacity till date and a have a growing pipeline of further 1200 MW capacity. The next on the list is Gore Street Capital who have approximately 230 MW of operational battery assets and further 1000 MW of assets in the pipeline. Harmony Energy Income Trust was formed in Q4 2021 and since then have energized 100 MW of BESS and have a further 200 MW under construction.

In the last few months, investor confidence have risen in BESS as an asset class and institutional investors are aggressively supporting BESS development either through dedicated development arm such as Downing LLP, Armstrong Capital, Quinbrook Partners etc or by backing established developers such as by Macquarie Group, Triple Point.

L48 positions itself as an early stage independent pure play BESS originator to operator. We position ourselves alongside Penso Power, Field Energy etc. who are looking to accelerate clean energy transition and are building a sustainable business whilst doing that.

Competitive Landscape

An independent pure play BESS 'originator to operator' accelerating clean energy transition.

Opportunity

A unique investment opportunity in a thriving market where investor confidence is at all-time high.

Roadmap

The journey to delivering 250 MW for the UK by 2026 and a European capacity of 1GW by 2030.

Finance

Lower 48 BESS has secured Funding from Action Group Holdings, Kuwait who, as an active SEED investor are looking to propel Lower 48 BESS into developing, owning and operating 1GW of BESS by 2030 in the UK market.

‍Lower 48 BESS, is supported by Hannam & Partners as our Investment Banking advisors for both the Equity and Debt markets & deal structures. We’ve secured an equity investment by Action Group Holdings, Kuwait who share our vision of building, owning and operating 1GW of BESS in the UK by 2030. This equates to what would be a 5% market share of the projected 2050 market.

Action Group Holdings represent a crucial Strategic Investor. They have a large, dedicated Energy Division that includes a very successful Oil Services Division. They recognise the importance of Energy Transition and the equal opportunity that this affords investors.

We continue to work with Hannam & Partners and there will be opportunities for further inward investment by both Action Group, Lower 48 Energy and new investors.

Lower 48 BESS intends to fund the development of BESS projects in the United Kingdom and beyond with a combination of equity and debt finance. This will include access to Middle Eastern bank debt and will be structured to lower the cost of capital and provide best value of money for our investors and shareholders.

Build

L48 will manage the procurement, construction and delivery of BESS projects in-house and would continue to develop in-house expertise going forwards.

L48 will draw on the expertise of its founders and advisors to deliver large scale infrastructure projects. L48 has engaged with Tier 1 OEM’s, integrators and contractors and specialist companies to deliver BESS projects. The procurement and delivery of the projects will be managed in-house through our continued relationship with the Charles Kendall Group who continue to provide us with the back office support and have a wealth of experience in delivering and managing infrastructure projects globally worth billions.

69% of sites in GB are optimised by third parties, making it the most popular route-to-market solution for BESS owners.

Source:

Modo

Operate

Globally, the move to a more sustainable energy scenario is happening fast. Meeting this challenge and capitalising on the opportunity, finance and technology need to work together so that BESS can be deployed profitably and at scale.

L48 anticipate that the BESS assets will be ‘Optimised*’ by industry leading energy traders such as Shell, BP & Quinbrook to optimise enabling us to maximise the trading performance of the assets.

L48 will manage the financial operation of BESS assets once energised and will oversee the maintenance, insurance and compliance aspects of the assets. The optimisation of the BESS assets and electricity trading will be performed by industry leading traders such as Shell, BP, etc and we are in advanced discussions with the traders for their services. Once we get to a portfolio of multiple sites, the optimisation would be spread across different traders to spread out the merchant risks associated.

*Route-to-market provider, aggregator, operator, optimiser, trading partner. Whilst there are many names for these types of organisations, they all provide the same services:

Accessing markets - Enabling a site to participate in the various revenue streams for BESS.
Operating the site - Designing and implementing a strategy to maximise revenues. This includes market selection, trading, dispatch, and degradation management.
Financial reporting - Communicating performance and earnings of the site.