ReVolve Renewable Power Corp (TSX-V:REVV) said it has signed an energy services contract for a new 3.2 megawatt per hour (MWh) Battery Energy Storage System (BESS), the first signed under the company's recently established distributed generation business.
The project complements the recently completed acquisition of Centrica Business Systems (Mexico) and increases the company's distributed generation capacity in operation and under construction by 50% to approximately 9MWh. The project is expected to cost approximately US$1.8m to install and commission including all related financing and transaction costs, Revolve said.
"We are extremely pleased to sign our first battery storage as a service deal and to add further contracted capacity to our growing distributed generation business. We are also particularly excited by the partnership with Quartux and are looking forward to working with them on similar projects over the coming months," Eric Hickert, CEO of ReVolve Business Solutions said in a statement.
READ: ReVolve Renewable Power completes acquisition of power producer Centrica Business Solutions Mexico
Project Details:
- The 3.2MWh battery storage system will be installed at the site of a major hotel chain in Cancun, Mexico.
- Revolve will be the owner of the project with responsibility for the financing, installation and operation of the BESS system.
- A 10-year Energy Services Agreement (ESA) has been signed between the company and the hotel operator for the provision of peak shaving and other energy-related services.
- Under the ESA agreement Revolve will receive an annual fixed payment in addition to sharing the energy savings delivered by the Project over the 10-year contract period.
- An Engineering Procurement Contract (EPC) has been signed with Quartux Mexico S.A. de C.V., a highly experienced installer and operator of battery storage systems in Mexico, to deliver a turnkey solution for the installation and commissioning of the BESS system.
- In addition to the EPC a 10-year Maintenance Agreement has also been signed with Quartux for the day-to-day operation and optimization of the system including all routine maintenance.
The project is targeted to be operational in Q1 2023 and will add to the recurring revenue base established with the recent acquisition of Centrica Business Solutions. An updated financial forecast for the company's distributed generation division is currently being completed and will be released in due course, it noted.
Project Financing
Revolve said project financing will be through a combination of cash on hand and a new C$1.86m secured loan to be provided by RE Royalties Ltd (RER). The financing agreements, expected to be completed in the next few weeks, will consist of a secured loan agreement and a royalty agreement between ReVolve and RER.
The secured loan will be drawn down based on a schedule commencing upon signing of the definitive financing agreements and will have a term of 24 months. It will be repayable at maturity, bear interest at 12% on drawn funds, with interest payable on a quarterly basis. The company will pay RE Royalties a financing fee of 2% of the secured loan amount on signing. The loan will be secured by certain assets and the company will enter a royalty agreement with RER under which RER will receive a royalty of 5% on gross revenues generated by the project for the term of the ESA.
Alejandro Fajer, COO of Quartux Mexico, S.A. de C.V. commented: "In Quartux we are very happy to collaborate with Revolve in a strategic project that will open the door to many opportunities and will further strengthen our position as leaders in the energy storage sector in Mexico and LATAM."
ReVolve was formed in 2012 to capitalize on the growing global demand for renewable power. ReVolve develops utility-scale wind, solar and battery storage projects in the US and Mexico with a portfolio of 3,700MW under development. The company has a second division, ReVolve Renewable Business Solutions which installs and operates sub 20MW "behind the meter" distributed generation assets.
Contact the author at jon.hopkins@proactiveinvestors.com