SMT Energy has secured funding for a 160 MW / 320 MWH battery energy storage facility in Houston known as SMT Houston IV.
As part of the capital stack, Macquarie Group and KeyBanc Capital Markets were joint lead arrangers in a $100 million project financing facility. Macquarie's Commodities and Global Markets business also provided a preferred equity investment and are mandated to sell the project's investment tax credits of approximately $62 million. KeyBanc also acted as financial advisor to SMT on the financing. Equipment for the project is being obtained by FlexGen Power Systems, one of the premier battery energy storage integrators in the U.S.
"This was no small feat. SMT is grateful to the teams at Macquarie, KeyBanc and FlexGen for their expertise and deep industry knowledge to get this complex deal across the line," noted J.J. Switzer, Co-Founder and Managing Partner of SMT Energy.
The project will be connected to the ERCOT power grid, allowing the facility to participate in the wholesale market supplying energy and ancillary services. Battery energy storage is playing an increasingly pivotal role in providing grid stability and reliability to the rapidly growing ERCOT system, which has seen significant growth in load and intermittent power generation in recent years. The SMT Houston IV project will support the ERCOT grid by providing access to stored energy, with the project expected to store and dispatch enough electricity to power the annual consumption of 8,800 homes in Texas.
"We are pleased to work with SMT on this transaction, which demonstrates our ability to bring multiple capabilities together to provide clients with innovative solutions in this growing market" said Tom Colebatch, Managing Director in Macquarie's Commodities and Global Markets business.
"KeyBanc is excited to serve as joint lead arranger and financial advisor for SMT on the Houston IV project," said Tyler Nielsen, Director in KeyBanc Capital Markets' Utilities, Power and Renewables Group. "This partnership shows our dedication to SMT Energy and the battery energy storage market, and we look forward to supporting storage deployment for many years to come."
In addition to providing the equipment, the project will utilize FlexGen's energy management system software, known as HybridOS™, which provides site integration, site control and advanced analytics insights to maximize the availability and operating ranges of battery energy storage assets. "FlexGen is proud to partner with SMT Energy on the deployment of the SMT Houston IV project, which will deliver critical services to the dynamic ERCOT power grid," said Jason Abiecunas, Executive Vice President of Business Development with FlexGen.
With this closing, SMT Energy has eighteen utility-scale battery energy storage assets, encompassing approximately 500 MWH, in operation or construction. In addition, SMT Energy has a 2 GWH pipeline of battery energy storage projects in ERCOT and Southwest Power Pool targeted for commercial operation by 2030.
