Dec 11, 2024, 04:30 ET
TEL AVIV, Israel, Dec. 11, 2024 /PRNewswire/ — Nofar Energy (TASE: NOFR), a publicly traded global independent power producer (IPP) specializing in renewable energy and battery energy storage systems (BESS), has secured a groundbreaking 7-year fixed-price Flexibility Purchase Agreement (FPA) for its Stendal Battery Energy Storage System (BESS) project in Germany (104.5 MW / 209 MWh). This pioneering deal ensures a stable, long-term cash flow for the project, while removing market risk. It marks the first-ever physical fixed-price FPA for a BESS project in Continental Europe, setting a new precedent in the energy storage industry.
The deal, with a major global energy corporation, will provide Nofar Energy with an estimated €85 to €95 million over the 7-year term (2027–2033), with an option to commence earlier on a merchant basis before January 2027.
This innovative structure offers a competitive and reliable way to make large-scale BESS projects bankable, especially in volatile energy markets. While similar agreements, like Power Purchase Agreements (PPAs), are well-established for solar and wind projects, the use of fixed-price agreements for storage projects is still in its infancy in both European and global markets. This deal represents a significant milestone in the development of storage market structures and the growth of the battery storage sector.
The global energy corporation that has entered into this Tolling Agreement with Nofar Energy is a leader in the energy industry, with a strong investment-grade rating. The company operates across the energy value chain, with a core focus on the development and management of renewable energy and battery storage systems, as well as conventional flexible generation power plants and extensive electricity and gas trading operations.
This landmark agreement not only ensures a predictable income stream for the Stendal BESS project but also strengthens Nofar Energy’s position in the global energy storage market. The fixed-price FPA guarantees a consistent and stable revenue stream, removes exposure to market fluctuations, and provides greater financing flexibility. This structure creates a competitive advantage, especially when securing project financing on favorable terms.
Nadav Tenne, CEO of Nofar Energy, commented:
“We are thrilled to announce this unique fixed-price tolling agreement for the Stendal project, our first storage project in Germany. This agreement not only provides revenue certainty for Nofar Energy but also strengthens our partnership with one of the world’s largest and most respected energy corporations. This innovative deal positions Nofar at the forefront of the global energy storage market and validates our commercial and techno-economic capabilities. The stability provided by this agreement will enable us to finance the project on favorable terms and improve our return on equity. We thank our partner for this opportunity and look forward to future collaborations in Germany and beyond.”
Recently, Nofar Energy announced another major milestone in its battery storage activities with the successful closure of a £152 million financing for its Cellarhead Battery Energy Storage System (BESS) project in the UK, which boasts a capacity of 300 MW / 624 MWh. The Cellarhead project financing was led by Atlantic Green, Nofar Energy’s UK BESS subsidiary. The financing is being provided by a consortium of prominent lenders, including Goldman Sachs, Santander, Bank Hapoalim, and Bank Leumi, with Goldman Sachs acting as the structuring bank, mandated lead arranger, and lender. The participation of these prominent financial institutions highlights the global recognition of Nofar Energy’s UK BESS platform, Atlantic Green, the Cellarhead Battery project and its importance for the UK’s energy transition.
Nofar, A Global Leader in Renewables and BESS
Nofar Energy continues to strengthen its position as a global leader in renewable energy and battery storage, with a growing portfolio of 10 GW in renewable energy and 10 GWh in battery storage projects across 10 countries. Of these, 2.4 GW and 1.2 GWh, respectively, are already connected or under construction. With a strong focus on Europe and operations in multiple markets, Nofar Energy is recognized for its innovative approach to energy solutions and its commitment to sustainability.
This landmark deal with a major global energy corporation, as well as the financing success of the Cellarhead BESS project in the UK, paves the way for future agreements of this nature. These achievements enable Nofar Energy to leverage its extensive expertise and market presence to pioneer fixed-price contracts for additional battery energy storage projects. This approach will also support attractive long-term financing solutions across Nofar’s growing portfolio, solidifying its role as a market leader in the energy storage sector.
For more details:
Shir Stopper
Nofar Energy
[email protected]
+972 50 7720 975
SOURCE Nofar Energy