January 26, 2024 - Hong Kong-based private equity firm Gaw Capital and Singapore-based maritime and energy company BW Group have established a joint venture to invest in battery energy storage system (BESS) projects in Australia.
The 50:50 JV, dubbed Valent Energy, will see Gaw Capital and BW ESS, the energy storage investment arm of BW Group, committing over A$2 billion ($1.3 billion) to develop, own and operate grid scale BESS projects to accelerate Australia’s transition to clean energy, Valent Energy said in a release on Wednesday.
The portfolio has been seeded with seven BESS projects and one solar PV farm across New South Wales, Victoria and South Australia, with a total capacity of over 1.6GW.
“We are delighted to partner with BW in building this battery storage platform together. I am confident that Valent will combine our respective strengths in industry and capital markets to underwrite a successful delivery of the battery assets that are urgently needed in Australia’s energy transitioning space,” said Christina Gaw, global head of capital markets and co-chair of alternative investments for Gaw Capital.
Seeded by Previous Acquisition
Valent Energy’s seed portfolio includes assets that had originally been under development by renewable energy developer Maoneng Group, which Gaw Capital acquired by taking a majority stake in the Sydney-based company in October 2022.
In addition to the seed projects initiated by Maoneng, the joint venture will also pick up assets from BW ESS and other new projects in the future, a Gaw Capital spokesperson told Mingtiandi.
Three developments within the seed portfolio – a 240MW facility in Mornington and a 250MW project in Pine Lodge, both located in Victoria, as well as a 120MW development in New South Wales’ Apsley region – have secured connection and development approvals and are set to commence construction this year.
Three other projects – a 200MW Tamworth development and a 120MW complex in Armidale in New South Wales, as well as a 225MW facility in South Australia’s Gould Creek – are expected to obtain connection approvals in early 2025. The venture also has a site in the New South Wales town of Merriwa, which encompasses a 550MW solar PV farm and a 400MW BESS project.
Valent Energy is chaired by Oliver Yates, who joined Gaw Capital in December to lead its expansion in Australia with a focus on climate tech and energy transition investments. Yates previously served as chief executive of Australia’s Clean Energy Finance Corporation and held various executive roles at Macquarie.
“With the rollout of substantial government policy to support battery projects, and the record periods of negative prices during daytime solar floods, the moment could not be a timelier for Valent to build large scale batteries,” said Yates.
According to Valent Energy, grid scale BESS is the most efficient and cost-effective form of energy storage and plays a critical role in the transition to renewable energy by providing grid stability. The projects enable the storage of renewable energy at times of peak generation and allow for the stored energy to be dispatched to the grid when wind and solar are unable to generate electricity.
Renewable Rollout
Gaw and BW are establishing Valent Energy as the Hong Kong firm, which managed $33.7 billion of global assets as of third quarter 2023, diversifies into climate tech and renewable energy related investments Down Under. The move aligns with the Australian government having committed to reducing greenhouse gas emissions by 43 percent from 2005 levels by 2030 and net zero by 2050.
Despite primarily investing in real estate, Gaw Capital has identified utility-scale battery storage systems, electric vehicle charging infrastructure and next generation long duration energy storage technology as investment initiatives.
The venture also aims to leverage BW ESS’ experience in BESS developments, with the firm owning 1.5GW of projects in the UK and Sweden, of which over 400MWh are under construction and 1GW are ready to build.
“We are excited about the establishment of Valent Energy with Gaw Capital, as it forms part of BW’s commitment to the green energy transition. By leveraging the sector expertise, industry relationships and international experience of BW ESS, Valent will be well positioned to accelerate the growth of Australia’s energy storage capacity, enabling its transition to clean energy,” said Erik Strømsø, managing director of BW Renewables and chief executive of BW ESS.
Established in 2021, BW ESS is a subsidiary of BW Group, a multinational maritime company involved in shipping, floating infrastructure, deepwater oil and gas production, and a growing portfolio of clean energy investments including batteries, solar, offshore wind and biogas.
BW Group was founded in 1955 by the late Hong Kong shipping tycoon Sir Yue-Kong Pao, who is the maternal grandfather of Douglas Woo, chairman of Hong Kong developer Wheelock & Co.
