Quinbrook sells stake in Gemini Solar-Energy project to Dutch firm APG
- The project near Las Vegas includes 690 megawatts of generating capacity and a 380-megawatt storage system
Quinbrook Infrastructure Partners sold a 49% stake in a $1.2 billion solar-power project to a Dutch pension asset manager just weeks after the private-equity firm doubled its investment in a wind-energy developer in a separate sale.
Quinbrook portfolio company Primergy Solar LLC is developing the Gemini project on 7,100 acres in the Mojave Desert about 25 miles from Las Vegas. Terms of the Gemini stake sale to APG Asset Management NV weren’t disclosed.
Expected to come online next year, Gemini would be the largest solar installation in the U.S., capable of producing as much as 690 megawatts, or enough to power more than 400,000 typical American homes at peak output.
Gemini also features a 380-megawatt storage system and would displace 1.5 million metric tons of carbon dioxide gas annually, Quinbrook said.
The deal marks the Houston-based firm’s second sale of assets held by its Quinbrook Low Carbon Power LP fund, which wrapped up in 2019 with $1.6 billion, said David Scaysbrook, a Quinbrook co-founder and managing partner.
Quinbrook last month sold Scout Clean Energy LLC to infrastructure investor Brookfield Asset Management Inc. for roughly $1 billion after helping the wind-power company expand its project pipeline to 22 gigawatts from 1.6 gigawatts about five years ago, when the firm acquired the Boulder, Colo.-based business, Mr. Scaysbrook said. Quinbrook doubled its investment in Scout with the sale, he added.
Quinbrook’s investments to expand Scout were partially why the firm has sought another investor to help it develop the Gemini project, which the firm acquired at an early stage in 2017 and three years later formed Primergy to manage it, Mr. Scaysbrook said.
“By the time Gemini became ready for financing, we had already committed a lot of the capital that we had in the Low Carbon fund to Scout and other projects. So, we started a process to sell a minority interest and then APG was the best partner," Mr. Scaysbrook said, referring to the asset manager’s experience as a renewable-energy investor, particularly in the U.S. solar sector.
APG provided the highest valuation for the Gemini project among prospective investors, according to Mr. Scaysbrook. The return from the Gemini stake sale exceeded Quinbrook’s expectations, he added. APG invested on behalf of the Dutch pension known as ABP.
The Gemini project, which is expected to feature more than 1.8 million solar panel modules when ready, attracted APG partially because of its size and the steady, long-term cash flow it is expected to generate, thanks to a 25-year supply contract with NV Energy Inc., a subsidiary of an energy unit of Berkshire Hathaway Inc., said Steven Hason, an APG managing director and head of real assets for the Americas.
“We have a very significant interest in expanding our investments in renewable energy. The Gemini project seemed a natural fit," Mr. Hason said. “What we also like here is the double bottom line of also providing attractive financial returns as well as societal impact by continuing to invest in the energy transition."
Gemini’s massive battery capacity also appealed to APG, Mr. Hason said, noting that “the use of battery storage is significantly accelerated in the U.S. versus other regions of the world."
As more renewable power sources are added to the U.S. electricity grid, battery systems are becoming increasingly important to stabilize supply, industry consultants and investors say. Along with helping power companies meet demand, such systems also help regulate grid voltage and frequency, among other uses.
Energy-storage capacity in the U.S. more than tripled last year to 4.63 gigawatts from 1.44 gigawatts a year earlier, according to the federal Energy Information Administration. Stand-alone battery installations provided the majority of energy storage at the end of 2020 and can hold power from sources that include fossil-fuel plants, the EIA said last year. It added that most projects planned for the following three years would be co-located with renewable sources, particularly solar power.
The Gemini project charges its batteries during the day so they can supply NV Energy with about four hours of power after sunset, Mr. Scaysbrook said.
“It’s 100% charged from the solar system," he said. “That’s the perfect expression of carbon-free electricity from battery storage."
This story has been published from a wire agency feed without modifications to the text
