BORDEAUX LITHIUM ION BATTERY STORAGE (EDP)

Promoter – Financial Intermediary

AMARENCO SOLAR LTD

Location

• France

Description

105MW lithium ion battery storage asset located in Gironde, France

Additionality and Impact

The Project contributes to increasing battery storage capacity in the New Aquitaine region in France.

Through this project, the EIB will support increased flexibility of the power system, thereby ensuring security of supply which has public goods attributes, and facilitating the integration of increasing share of renewables, thereby contributing to reduce the CO2 externality from the power sector. The project is developed on a merchant basis with an innovative business model under new market-based procurement schemes of the electricity market design in France.

 

The battery storage project is supporting the EU policy regarding battery storage as defined in the Clean Energy for All Package and the Electricity Directive (2019/944), as well as targets of the National Energy and Climate Plan and France's Programmation Pluriannuelle de l'Energie. In line with the EU Taxonomy, battery storage is considered providing a substantial contribution to climate change mitigation. The financing of this programme is providing a high contribution to the objectives of the Bank's energy lending policy as well as the transversal objectives on Climate Action, Environmental Sustainability and Social and Economic Cohesion. The programme is expected to deliver very good economic benefits.

 

The EIB/EC financing under EDP for the development and commercialisation of new market-based electricity services based on BESS, can have a significant signalling effect and will provide stability to the borrower's financing by including an anchor lender with a long term investment view for 50% of the senior debt. The chosen financing structure reflects the inherent market risk of the Project, with several financing mitigants to accomodate the volatility of Preject Revenues. The present business model can be replicated for other projects, in France and other European countries.

Objectives

The project will provide capacity and system services to the national electricity grid. It will improve grid flexibility for the integration of renewables and will contribute to the security of supply of the system.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 16 million

Total cost (Approximate amount)

EUR 61 million

Environmental aspects

The 225kV components of the project fall under Annex II of the Directive 2014/52/EU, amending the EIA Directive 2011/92/EU. Besides, the project is located in the vicinity of the natural park of Landes de Gascogne, near the natural reserve "Saucats et La Brède," one Natura 2000 area and six sites of ecological interest. In 2021, the screening document ("analyse écologique") concluded the project does not have significant impact on the biodiversity with appropriate measures in place during construction. No wetlands are on the project site. Consequently, and based on the Promoter's environmental studies, the DREAL acting as competent national authority has determined that the project was not subject to an environmental impact assessment ("évaluation environnementale") according to its decision issued in June 2021. The Bank reviewed the environmental and social capacity of the Promoter including its organisation, process and procedures and deemed them to be good. Based on the information available, and with appropriate conditions and monitoring, the programme is expected to be acceptable in environmental and social terms for Bank financing.

Procurement

The Promoter is a private company. All its project's revenues (Capacity Remuneration Mechanism and Frequency Containment Reserve) will derive from a competitive and open tendering process. The project is thus not subject to EU rules on public procurement.

Status

Signed - 20/12/2022