SEF Weekly: German interconnector, bp R&D and heat network retrofitting

An interconnector order from TenneT and TransnetBW for Hitachi Energy to bolster German energy security is the leading news story in this week’s Smart Energy Finance (SEF) Weekly.

Additionally: bp announces $60 million investment into an EV R&D facility; E.ON and Microsoft expand their partnership on digital innovation, starting with algorithmic hedging; Switch2 Energy wins a 30-year heat network retrofit contract; and Apex Clean Energy has announced extensive refinancing to provide additional capital and flexibility for future growth.

Hitachi Energy wins order for German interconnector

Hitachi Energy has announced an order from TenneT and TransnetBW to supply a transmission solution for the SuedLink DC4 high-voltage direct current (HVDC) interconnection between the north and south of Germany.

According to the technology solutions provider, the interconnection will be provided to the two German TSOs to reduce fossil fuel consumption and assist with their carbon neutrality goals. The announcement comes in at a time when European energy security is becoming more of a concern due to the ongoing energy crisis resulting from Russia’s invasion of Ukraine.

Using Hitachi Energy’s HVDC Light technology, SuedLink DC4 will transfer up to 2,000MWs of emission-free electricity, reportedly enough to power 5 million German households.

The link will transmit electricity for 550kms underground, at up to 525 kilovolts, sending wind power from the north to the industrial south, or alternatively solar power from the south to the north when needed.

Hitachi Energy will supply an HVDC Light converter station at each end of SuedLink DC4 to convert AC power from the transmitting grid to DC for delivery through the link. This will then be sent back to AC for transfer to the receiving grid. The contract includes three cable section stations to speed up fault detection in the link.

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bp injects £50m into global battery R&D centre

bp has unveiled plans to invest up to £50 million ($60 million) in an electric vehicle (EV) battery testing centre and analytical laboratory in the UK.

The announcement came in prior to the oil giant’s profits reaching an all-time high in the last four years.

Planned to open by the end of 2024, the new facilities will be located at bp’s global headquarters for its Castrol business in Pangbourne, Berkshire, and is hoped to support the technology, engineering and science roles housed there today.

The site already undertakes research and development (R&D) of fuels, lubricants and EV fluids and aims to become a leading hub for fluid technologies and engineering in the UK.

According to bp, the facilities will help advance the development of leading fluid technologies and engineering for hybrid and fully battery EVs, aiming to bring the industry closer to achieving the key tipping points for mainstream EV adoption.

Castrol ON advanced EV fluids manage temperatures within the battery, which enables ultra-fast charging and improves efficiency, which help EVs to go further on a single charge and extend the life of the drivetrain system.

Castrol intends to use the new facilities to continue to work with car manufacturers and suppliers to co-engineer future battery technology and associated thermal management fluids. It will also look to develop future technologies required to help to enable the ultra-fast charging which underpins bp pulse’s growth strategy.

E.ON extends cooperation with Microsoft on AI and data analytics

E.ON has announced an expansion of their collaboration with Microsoft to advance digitalisation and develop new sustainability solutions, leveraging AI and data analytics to bolster their offered products and services.

Microsoft and E.ON will now jointly identify new projects and develop solutions using technologies such as artificial intelligence (AI) and data analytics, among others. The innovation collaboration will provide both partners with a faster learning curve in terms of developing more products and services for their customers, as well as more effective processes in their organisations.

A first project of the innovation collaboration deals with the process of ‘algorithmic hedging’. The gained insights will support E.ON in making improved buying and selling decisions for electricity and gas even against volatile market developments.

Together, the two companies are working on the development of algorithms that analyse the current market situation on the basis of machine learning and implement hedging decisions automatically.

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Switch2 Energy win 30-year heat network retrofit contract

Greenwich Millennium Village Limited (GMVL), based in the UK, has selected Switch2 Energy to provide retrofit design and build, operation and maintenance of its Greenwich Millennium Village heat network – as part of a 30-year ESCo partnership.

Located a short walking distance from the Millennium Dome, in the southeast of London, GMVL is a joint venture between Taylor Wimpey and Countryside Properties.

The existing heat network serves phases 1 and 2 of the development and was originally built between 2000 and 2009. It provides heating and hot water to over a thousand homes and uses a matrix of energy centres, plant and equipment that is outdated and now difficult to maintain.

Switch2 has devised a solution to upgrade and replace existing energy centres and other equipment while ensuring uninterrupted heat and hot water supply to residents. This will transform the efficiency and reduce carbon emissions by 150 tonnes per annum, equivalent to the carbon offset by a 178 acre forest in one year. 

Switch2 will take on responsibility for all aspects of maintaining and operating the heat network. This involves all heat metering, including smart meters in homes – to manage accurate and transparent resident billing.

Switch2 will deploy its specialist ‘Decarbonise, Operate and Maintain’ solution, which includes Internet of Things (IoT) optimise technology, to enhance the performance of the GMV heat network.

The digital energy management platform uses remote connectivity and advanced data analytics to gain complete, real-time visibility of the entire network. This informs continuous system improvement and preventative maintenance.

Apex Clean Energy flexible refinancing

Apex Clean Energy has announced refinancing and expansion of its corporate debt facilities to provide additional capital and flexibility for future growth.

Partnering with eight global financial institutions on the transaction, Apex receives $650 million of debt capital through a $450 million senior secured green term loan facility and a $200 million senior secured green revolving letter of credit facility.

The recapitalisation follows the majority stake acquisition of Apex by funds and other accounts managed by Ares Management Corporation (Ares) in November 2021.

Santander Corporate & Investment Banking (Santander), Sumitomo Mitsui Banking Corporation (SMBC Group), Helaba, and Bank of Montreal (BMO) served as green structuring agents, coordinating lead arrangers, joint bookrunners, and syndication agents. Santander also served as administrative agent. Canadian Imperial Bank of Commerce (CIBC) served as joint lead arranger. Additional banks participating in the syndication include Bank of America, Royal Bank of Canada (RBC), and Forbright Bank.