BlackRock Real Assets and KX Power sign Joint Venture to develop significant battery storage assets in the UK
BlackRock has made an initial commitment of up to £200 million to support the build-out of up to 2GWh battery storage assets in the UK to enable more homegrown green power
London, 7 June, 2022 – KX Power (“KXP”), a London-based battery storage developer announces it is signing a joint venture with BlackRock Real Assets to develop, build and operate battery storage projects across the UK. The investment is being made by the BlackRock Global Renewable Power III (“GRP III”) fund and will support the build out of up to 2GWh (Gigawatt hours) 1of battery storage assets across the UK.
Battery energy storage systems (“BESS”) assets’ capacity to resolve the intermittency of natural sources such as wind or solar power, makes them complementary to other forms of renewable energy infrastructure, and integral to accelerating the rollout of homegrown renewable energy across the UK, in line with the country’s 2050 Net-Zero strategy. BlackRock’s initial comment to the joint venture will enable the buildout of enough renewables generation projects to power over 2 million homes annually, and to remove 16 million tons of CO2 2over the lifetime of the projects.
This investment is GRP III’s first into the UK’s battery storage market and brings together BlackRock’s infrastructure expertise and KXP’s extensive experience developing BESS assets to create a portfolio of advanced energy storage systems supporting the UK’s energy transition, and in tandem, increased energy security.
David Giordano, Managing Director, Global Head of Renewable Power at BlackRock commented: “GRP III invests in the climate infrastructure of the future. With our JV investment in KXP, we are delighted to be driving the development and expansion of the UK’s battery storage market. On behalf of our clients, we see vast opportunity in the development of a sophisticated network of battery storage assets across the UK and in other regions across the globe to facilitate the transition towards a green energy future.”
BlackRock’s Global Renewable Power platform has invested in over 400 wind, solar and other climate infrastructure projects across 17 countries in 4 continents. The Global Renewable Power team consists of 66 professionals, with an average of over 20 years of investment and technical expertise. The team now manages over US$9.7 billion of client capital3, with an emphasis on globally diversified portfolios, measurable climate impact and differentiated sourcing.
Dr. Zhe Zhang, CEO of KXP, commented: “Our mission is to enable more and more adoption of UK homegrown green power, as embraced by the UK Administration’s Net Zero Strategy and by local councils. Combining KXP’s on-the-ground project development skills and power trading expertise with BlackRock’s knowledge and track record in climate infrastructure, I am certain KXP will become a significant player in the renewable energy market in the UK. Today’s investment is a testament to investors’ strong appetite for renewable energy and accelerates the UK’s growth towards innovative, sustainable and inclusive energy.”
About KX Power:
KXP are a well-established, UK-based, asset management firm specialising in the origination, development, investment and management of real, renewable energy and power generation assets. With deep knowledge of the complete value chain and entire lifecycle of renewable energy projects, KXP’s local teams have successfully developed, financed, built and operated energy storage assets in the UK. With this strong foundation and an ambition for growth, KXP have built a strong pipeline for the development of future energy assets.
KXP are dedicated to the transition to a low-carbon energy ecosystem. With its expertise and resources in green technology, digitalisation, power trading/optimisation and capital market, KXP’s vision is to become the preeminent UK renewable energy sponsor. For more information of KX Power, please visit: www.kxpower.co.uk.
About BlackRock Real Assets
In today’s dynamic and complex global investing market, BlackRock Real Assets seeks to help clients access real assets that could help meet their investment goals by providing a distinct range of well defined, outcome orientated strategies, along the investment risk-return spectrum.
BlackRock Real Assets’ dedicated teams of industry and sector specialists deliver global reach, with deep local expertise. They have decades of relevant experience, are deeply embedded in their operating industries by sector and geography and have developed strong partnership networks over time. BlackRock’s culture of risk management, knowledge sharing and investment discipline sets BlackRock Real Assets apart and underpins all that they do. With over 400 professionals in 30 offices managing over US$70 billion in client commitments as of 31 March 2022, BlackRock Real Assets partners with clients to provide solutions tailored to individual portfolio needs such as income, growth, liquid or balanced real assets outcomes.
Press Contact for KX Power:
+44 207 459 4352
Press Contact for BlackRock:
1 The joint venture between BlackRock Real Assets and KX Power will target to build battery storage assets of up to 2GWh.
2 A two-step approach was utilised in assessing the emissions saved through this joint venture – (a) Emissions saved from charging and discharging. This assumes the batteries are absorbing power at a low emissions rate and then displacing more emissions-intensive sources when discharging that power. (b) Emissions saved due to battery storage projects enabling renewables: The team used National Grid’s projections for battery storage capacity additions required to meet certain levels of offshore wind capacity additions (offshore wind capacity used for simplicity). A 25% haircut was subsequently applied to the calculations to reflect the fact that battery storage is not fully enabling build-out of offshore wind. For (a), the team assumed the electricity absorbed by said batteries has an emissions factor of 0 tons CO2/MWh, and that the electricity being displaced when the projects are discharging has an emissions factor of 0.370 tons CO2/MWh, which is the average emissions factor of natural gas fired generation
3 As of May 2022