Canadian power producer Northland Power Inc (TSE:NPI) on Wednesday said it has reached financial close on its 250-MW/1,000-MWh Oneida Energy Storage Project in Haldimand County, southern Ontario.
The project is the company’s first investment in energy storage. It will benefit from a 20-year capacity revenue contract with Ontario's Independent Electricity System Operator, which will provide about 60% of its revenues, with the balance to be derived from operations in the wholesale market.
Northland has secured non-recourse project-level financing to fund about 75% of the construction costs of the roughly CAD-800-million (USD 593m/EUR 548m) project. The Toronto-based company currently owns 72% of the scheme. Its development partners are NRStor Inc, Six Nations of the Grand River Development Corporation and Aecon Group Inc.
The lithium-ion battery storage facility is expected to start full commercial operations in 2025.
Northland expects that the facility will bring CAD 40 million to CAD 45 million of annual adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to the company over the first five years.
It added it is currently assessing how the Investment Tax Credits announced in the 2023 federal budget will apply to the project.
(CAD 1 = USD 0.741/EUR 0.685)
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