Spearmint Energy has just ignited a spark in the energy storage sector, securing over US$250 million in financing for two monumental battery energy storage systems (BESS) in Texas. The projects, Tierra Seca and Seven Flags, each boasting 100MW/200MWh capacities, are set to fortify the ERCOT power market against the escalating pressures of power demand.
The financing package is a testament to Spearmint’s prowess in attracting world-class investors. It comprises US$59 million in construction-to-term loan facilities from Manulife, US$95 million in tax equity bridge loan facilities from East West Bank (EWB) and Investec, and US$98 million in tax equity commitments from Sugar Creek Capital. EWB and Investec played pivotal roles as coordinating lead arrangers, joint bookrunners, and green loan structuring agents, with Investec also serving as the administrative agent for the tax equity bridge loan facilities. EWB will additionally act as the collateral agent and depository bank for both the tax equity bridge loan and construction-to-term loan facilities.
Andrew Waranch, Spearmint’s founder, president, and chief executive, expressed his enthusiasm, stating, “We are thrilled to secure this financing for Tierra Seca and Seven Flags, which demonstrates the confidence world-class investors have in Spearmint’s ability to develop and efficiently operate grid-scale energy storage infrastructure.” This financing is not just a vote of confidence in Spearmint but also a significant step towards enhancing grid stability in Texas.
As Texas continues to grapple with soaring power demand, these projects come as a breath of fresh air. Waranch highlighted the urgency, saying, “As rapidly increasing power demand continues to put pressure on grid stability, we are pleased to accelerate the development of these two projects to facilitate increased energy availability in ERCOT.” The completion of Tierra Seca and Seven Flags will inject over 200MW/400MWh of storage capacity into the ERCOT grid, promising more reliable, affordable, and efficient power for Texans.
Cory Magnuson, Spearmint’s chief financial officer, underscored the significance of the partnerships, noting, “Manulife, East West Bank, Investec and Sugar Creek Capital are globally recognised investors with strong expertise in energy and infrastructure. We are proud that they have elected to partner with Spearmint in our mission of providing safe, stable and affordable power to the grid.”
The construction of these projects is already underway, with M.A. Mortenson Company at the helm and Sungrow Power Supply Co. providing the state-of-the-art PowerTitan 2.0 energy storage platform. The successful completion and operation of Tierra Seca and Seven Flags could set a new benchmark for energy storage projects, not just in Texas, but across the globe. It could also spur other developers to accelerate their projects, further bolstering the energy storage sector.
Moreover, this development could catalyse a deeper conversation about the role of energy storage in grid stability and the need for more such projects. As Texas continues to experience power demand surges, the importance of energy storage in maintaining grid reliability cannot be overstated. This news could also prompt policymakers to incentivise more energy storage projects, further driving growth in the sector.
In the broader context, this financing and the subsequent projects could influence the trajectory of the energy storage sector. It could encourage more investors to back energy storage projects, attracting more capital into the sector. Furthermore, it could inspire other developers to push the boundaries of energy storage technology, leading to more innovative and efficient solutions. The ripple effects of this news could be far-reaching, shaping the future of the energy storage sector in significant ways.
