Process
Lower 48 Energy is an independent pure play BESS 'originator to operator' offering unique investment opportunity
Origination
Lower 48 Energy works through each critical stage of the energy storage ‘origination process’ to complement the efficient dispatch of electricity across the National Grid.
The current UK National Grid and Distribution Network Operators grids are aging and suffered from a lack of investment in the transmission capacity. This means it is increasingly difficult to originate BESS assets. However we have nearly 1 GWh worth of BESS projects at various stages of the origination process spread across the United Kingdom at both Transmission and Distribution Network Operator electrical grids.
Our engineers study and analyse electrical ‘heat maps’ of both the electrical generation and electrical demand, and then with our proprietary data analytics we have identified locations that we believe are more suitable for Battery Energy Storage Systems and if constructed would complement the National Grid in efficient dispatch of electricity.
Once we identify a location, we then work closely with Landowners and their Land Agents to work up tenancy contracts. In parallel to this we also work with our appointed Planning Consultants, and specialist subcontractors that cover a range of disciplines such as environmental studies, flood risk assessments, traffic studies, structural & architectural planning and civil works disciplines, to maximise the chances of the proposed project being granted Planning Permission from the relevant authorities.
Acquisition
Lower 48 Energy are also mandated to seek to acquire fully permitted “Shovel Ready” projects from “Originators”.
A shovel ready site is one that benefits from a near term Grid Connection offer, full Planning Permission and a Land Tenancy agreement. In addition there might also be a requirement for wayleave agreement with 3rd parties for utility runs. Any acquisition will be very closely examined to ensure that financially the prospective project is attractive from an investment perspective.
Initial desk top studies are conducted, after first pass, and once the initial project passes Due Diligence the projected revenue streams are modelled by our Optimisers to provide certainty to financial models. Once an Exclusivity Agreement is set in place Lower 48 Energy will move quickly to complete Due Diligence and then work to meet the financial commitments within the contractural sale agreements. The project would then be moved to a Final Investment Decision.
Finance
Lower 48 Energy 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 Energy, 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 Energy 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
Lower 48 Energy will manage the procurement, construction and delivery of BESS projects in-house and would continue to develop in-house expertise going forwards.
Lower 48 Energy will draw on the expertise of its founders and advisors to deliver large scale infrastructure projects. Lower 48 Energy 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 Great Britain are optimised by third parties, making it the most popular route-to-market solution for BESS owners.
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.
Lower 48 Energy 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.
Lower 48 Energy 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.
