As the business environment moved into the first Covid-19 lockdown in March 2020, we expected investment flows would slow or freeze and braced ourselves for a ‘nuclear winter’ of capital formation. Encouragingly, the pandemic has accelerated transformation, with a shift of investment toward a decarbonised power system and electrified transport environment. Power markets, in particular, have had a ‘through the looking glass moment’. It has been a time when the supply of low-carbon generation has massively exceeded demand, the surplus of low-cost renewables has created the need for balancing transmission and distribution grids and there has been a dramatic drop in airline and terrestrial transport emissions. These dynamics have further confirmed investor commitment to the transition of a distributed, digital and decarbonised future.
So what did we learn from 5 completed engagements which transitioned over 1,000 MW of next-generation energy capacity and eMobility infrastructure?
We saw evidence of trends #1, #2 and #3 when we advised Alpiq AG and Anesco, respectively. In September we completed the sale by Alpiq of Flexitricity Ltd - a virtual power plant aggregator of UK behind-the-meter flexibility in the commercial & industrial segment with the largest front-of-meter grid-scale batteries platform - to Quinbrook Infrastructure Partners. We also advised Anesco Ltd - the largest independent renewables engineering services group in the UK, providing O&M services to over 1.1GW of solar and developing a pipeline of over 1.5GW of solar and storage - on two operating portfolio disposals. One was the ground-breaking Clayhill UK merchant co-located PV + storage development sold to EV charging group Gridserve. The other was the 81 MW operational grid-scale battery portfolio sold to LSE-listed Gore Street Capital Storage Fund PLC.
Similarly, reflecting trends #1 and #2, in October we completed the sale of Forsa Energy – a developer of a portfolio of flexible, distributed high-efficiency gas-powered peaker units that provide grid balancing services to integrate renewables - to Tiger Infrastructure Partners.
Lastly, we saw evidence of trends #2 and #3 through our Series B placement advisory for Greenbird AS - a tech company providing SaaS to power utilities - with investors focused on the integrated digital offering which serves global power utilities across three continents with 30 million meters under management.
We started focusing on capital flows into energy storage from 2014, arguably a bit early! And we started work in aggregated distributed flexible generation including VPPs in 2015. Now our thesis is playing out – that flexibility is at the core of tomorrow’s low carbon power markets. Our power system and electrified transport markets will continue to need storage, aggregation, distributed intelligence and digital controls. At Alexa Capital our goal has not changed - we continue to focus on accelerating capital flows toward a decarbonised future.