ILI Energy Storage

ILI Energy Storage is selling a portfolio of nine battery storage development projects at various locations across Scotland. The portfolio has a capacity of up to 450MW, with overall development capital expenditure of around £170 million.

Formed in 2004 to promote eco-friendly developments, the Intelligent Land Investments (ILI) Group operates across the energy storage, renewable energy and residential development markets, creating value for investors in all three sectors.

As part of the ILI Group, ILI Energy Storage plc was set up in 2015 with a core focus to develop 2GW of pumped-storage hydro and over 500MW of utility-scale battery storage. The company is developing a portfolio of nine battery storage development projects across Scotland, offered for sale as individual projects or on a portfolio basis.

Overall the portfolio has the capacity of up to 450MW and development capital expenditure of around £170 million.

ILI Energy Storage CGI image

Value £170 million

Clean energy and circular economy

9 individual battery storage projects

Located across Scotland

More on the ILI website

Exciting new battery storage development project opportunities are being offered across Scotland by ILI Energy Storage plc (part of the Intelligent Land Investment Group plc).

Battery storage projects provide a new asset class for investors focused on low carbon infrastructure. It's a market that will see significant growth over the coming years, with National Grid predicting up over 40GW of storage will be required by 2050.

Battery storage systems are emerging as one of the primary solutions to effectively integrate high shares of intermittent renewables energy in power systems worldwide.

Electricity storage solutions are also being deployed to provide essential support services to electricity grids, such as demand management and frequency response.

In response to the growing demand for battery storage projects in the UK, ILI have to date identified and secured several high-quality locations throughout Scotland to develop a portfolio of battery storage development projects.

ILI’s portfolio will be made up of nine storage projects with the required development rights and permits. In total some 450MW of capacity is being developed, which provides an opportunity for an investor/developer to build out and ultimately operate a portfolio of assets.

The target market for each project’s electricity output is the UK transmission and distribution grid, usually in the form of flexible trading or ancillary service contracts to support the grid through voltage support, frequency regulation and spinning reserves.

Battery storage projects use proven battery technology to store electricity during periods of low demand and when the power price is comparatively low, and release (discharge) electricity when it's commercially viable to do so, during periods of higher demand when the power price is comparatively high.

This pricing deferential typically represents one forms of revenue for the owner of the storage asset, after relevant costs have been allowed for.

From a strategic perspective, making significant improvements to energy storage capacity will play an important and significant role in helping to balance Scotland's expanding renewable energy resources, and will play a critical role in assisting Scotland to meet its net-zero commitments by 2045.

Scotland-wide development projects

Development rights to each individual project within the portfolio will include:

  • Planning consent
  • Site lease agreements
  • Grid connection
  • Other subsidiary development permits

The current status of the portfolio development rights is as follows:

Planning

  • Four sites already have planning consent in place
  • Two sites are in planning
  • Proposal of Application Notices (PAN) have been submitted on a further three sites

Grid connections

  • Five sites have grid offer accepted
  • Four are in assessment/negotiation with DNO (SP or SSE)

Site lease

  • All site exclusivity arrangements are in place, with leases either agreed or in negotiation

Four of the projects are in Fife and Highland (with two projects each). The others are in Aberdeenshire, Inverclyde, Perth & Kinross, Stirling and West Lothian (each with one project).

Investment opportunity and forecast growth

ILI Energy Storage plc is selling a portfolio of development rights to develop 9 separate battery storage projects across Scotland. Investors could purchase the entire portfolio or a portion there of, as sites become ready for development.

The total capital expenditure (capex) required to develop the entire portfolio is around £170 million. The average capex to develop one project is around £19 million. Each site has been designed with capacity to deliver around 49.9MW.

As a purchase consideration for the development rights, ILI will charge a development fee of around £1.25 million per project aggregating to £11.25 million for the entire portfolio.

Purchase consideration will be paid in cash upon financial close. The capital required to develop the portfolio projects will typically be funded through a combination of debt and equity.

ILI have indicated a leverage potential of around 30% per project based on base-line indicative modelling for each project over a 20-year horizon.

  • Gross Profit/EBITDA is forecast at around £60 million
  • Net Profit at around £16 million
  • Project IRR (Real) of 10.6%

Upon purchase of the portfolio, or a part thereof, the investor/developer will need to make its own arrangement for construction and technology deployment, operation, maintenance, and revenue generation agreements. ILI will support the investor/developer throughout this phase.

More on the ILI website

 

Want to find out more about UK commercial property and investment opportunities?

Disclaimer

Whereas every effort has been made to ensure that the information in these pages is accurate, Scottish Enterprise and Scottish Development International does not accept any liability for errors, omissions or misleading statements. And no warranty is given, or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Investors will need to undertake their own due diligence in conjunction with individual project promoters/sponsors in relation to the detailed project investment opportunities presented.