It is expected to come online in the current (Q2) quarter and OX2 will continue to provide technical and commercial management of the project for five years thereafter.
The deal, which still needs approval from the Swedish regulator, represents a big ‘first’ for both companies.
First owned BESS project for Flower, first BESS sale for OX2
For Flower, it is the company’s first large-scale owned BESS project, something CEO John Diklev told Energy-Storage.news the firm was considering in order to prove its ‘long-term’ optimisation and asset management model in an interview earlier this year (Premium).
Optimisation and virtual power plant (VPP) companies do not typically own their own BESS projects, and instead contract with project owners to trade using them on their behalf.
Diklev explained in our interview that Flower wants to enter into 5-10 year electricity market risk management agreements with customers, using BESS and other assets, but needs equally long partnerships with BESS owners to do that.
In the absence of such available partnerships, owning BESS was an option but “…only if it necessitates it,” he said. The company increased its available funding to SEK600 million (US$55 million) last month through debt funding from Norion Bank.
“Project Bredhälla will help us stabilise the electricity grid, reduce volatility in the electricity markets and act as a hedge for our solar and wind power partners,” commented Flower’s chief strategy officer Emma Hellström.
The company is mainly active in Sweden but has pan-European plans, and at the time of our interview managed around 25MW of large-scale BESS.
For OX2, it is the company’s first transacted BESS project, having primarily worked in wind and solar until now.
The company’s model is typically to sell at the ready-to-build (RTB) stage but the different approach in this case – work started on the unit in late 2022 – was explained by the company’s technical lead for energy storage Michiel van Asseldonk in an interview (Premium) at the Energy Storage Summit Central Eastern Europe 2023 in Warsaw, Poland.
He explained that the firm “saw a lot of value” in keeping the asset during construction and then revisiting the sale later and was also considering the potential combined sale with a Finnish BESS project it is developing.
The Bredhälla project will be the largest BESS in Sweden when online, though a much larger 93.9MW/93.9MWh project is being built by Neoen and Nidec for a 2025 commissioning.
BESS projects in Sweden primarily target the country’s ancillary service markets, historically provided by hydropower assets which are increasingly being displaced by BESS. Some 200MW of BESS is expected to come online this year according to another optimiser Flextools.