Capital Dynamics expands strategic relationship with Tenaska to develop energy storage in California

Capital Dynamics, an independent global private asset management firm, announced that its Clean Energy Infrastructure business has signed an agreement with respected U.S. energy company Tenaska to develop a portfolio of nine battery energy storage system (BESS) projects located throughout California’s highest electrical load centers. The agreement expands the strategic relationship between the two companies, which jointly own two solar facilities in the Imperial Valley of California and are developing additional solar projects. 

The BESS projects are designed to deliver local preferred and non-greenhouse gas (GHG) power resources to manage high-demand conditions caused by California heat waves, power supply shortages, and growing local power supply deficiencies in the Bay Area, Los Angeles and San Diego areas, that cannot be reliably served solely by intermittent renewables.

“With its focus on achieving robust clean energy goals, California is poised for continued significant growth in energy storage demand,” said Benoit Allehaut, Managing Director in Capital Dynamics Clean Energy Infrastructure team. “We are excited to join with Tenaska to build high-quality battery energy storage facilities to help integrate renewables and reinforce CAISO grid reliability and resilience. We hope to quickly contract resource adequacy with utilities and CCAs to grow this portfolio.”

The BESS facilities will store and maximize the use of clean, renewable energy sources like solar and wind, so they may be deployed back to the grid during peak energy usage periods. In total, the projects will provide approximately 2,000 megawatts (MW) of critically needed clean energy into the California Independent System Operator (CAISO) market.

Currently, California relies heavily on carbon-emitting fossil-fueled power resources to meet peak energy needs, typically occurring after mid-day solar energy supplies drop off. Battery storage is a proven, safe, reliable, and cost-effective alternative that can help reduce the state’s dependence on fossil fuels by storing and shifting clean energy production during the day to the most needed evening hours. 

“Tenaska’s expertise lies in leveraging changing energy needs into infrastructure solutions,” said Tim Hemig, Senior Vice President in Tenaska’s Strategic Development & Acquisition. “We are excited to pair our development skills with Capital Dynamics’ international capital origination and structuring capabilities to bring these reliable and sustainable battery energy storage projects to fruition.”

This California BESS collaboration between Capital Dynamics and Tenaska builds on successful development agreements between the two companies to develop 24 solar projects totaling approximately 4,800 megawatts (MW) of renewable generation in the Midcontinent Independent System Operator (MISO) market and Southeast Reliability Council (SERC).

Marathon Capital acted as an advisor to Tenaska on the transaction.