Growing battery energy storage systems
Masdar Arlington Energy is advancing the UK’s decarbonisation journey.
Summary
Masdar Arlington Energy brings together two renewable energy companies with an aligned ambition: to support the energy transition in the UK and beyond.
We advised Masdar on an acquisition that’s enabling the company to boost the UK’s battery energy storage capacity and grow its renewable energy infrastructure.
Across the world, we’re getting back in touch with nature, tapping into the elements to create the wind and solar power we need to live more sustainable lives.
But what happens when the wind doesn’t blow and the sun doesn’t shine?
We’re using more electricity and electronic devices than ever before. To keep them powered 24/7, we need efficient ways of storing and redistributing renewable power that allow for the intermittent nature of the wind and sun.
The UK government has set a goal to boost overall offshore wind capacity from roughly 6GW to 50GW by 2030. Battery energy storage (BESS) is a vital part of this transition, so work is underway to increase it.
The road to a decarbonised future
Renewable energy company Masdar has committed to providing integrated energy solutions using different types of technology. One of its targets is to create 100 gigawatts of renewable energy globally by 2030.
With renewable energy predicted to make up 80 per cent of electricity in the UK by then, Masdar saw an opportunity to contribute to the energy infrastructure needed for progress.
“We’ve been increasing our renewable capacities over the past 10 years,” says Husain Al Meer, director of global offshore wind & UK, Masdar.
“Focusing mainly on wind at first, we’re now at a point where we need to think about how the grid can accommodate the intermittency of renewables. You can’t keep adding gigawatts of energy if you don’t have the infrastructure to store it.”
Identifying a flexible, battery-powered grid as a solution, Masdar wanted to grow its own in-house BESS expertise.
“The best option for us was to acquire the capabilities that enable us to be more active in project development for the core infrastructure services, like BESS, required for the UK to reach net zero,” explains Husain.
This meant finding the right battery storage company to team up with.
“Many offshore renewable energy projects today value companies that can support all their needs, which includes offering energy storage solutions. Building in-house capabilities with Arlington Energy means we have a more competitive offer.”
Husain Al Meer
Director of Global Offshore Wind & UK, Masdar
Renewable energy needs to be stored
With practical experience in securing grid connections, construction, managing negotiations with landowners and setting up the commercial side of the operations to trade electricity, Arlington Energy was the perfect match.
Ahead of the curve, having built some of the UK’s largest and earliest battery systems for solar energy, securing £200 million in funding in 2018 helped to propel its recognition as an SME market leader for flexible, sustainable energy assets.
“Relatively early on, I could see that energy storage was going to be the next critical technology to accommodate the renewables that were coming to market,” explains Matt Clare, co-founder of Arlington Energy, UK-based BESS developer.
“I began Arlington with the vision of it being a one-stop-shop, a flexible asset platform for all aspects of BESS development, like construction management and long-term commercial asset-management, in one place.
“To maintain our position as one of the largest developers in the UK and continue making these plans happen, we needed a partner with an aligned long-term business plan,” explains Matt
A powerful partnership
Acting as lead advisor to Masdar, Deloitte helped to bring it together with Arlington, with a transaction that’s boosting renewable energy markets in the UK and Europe and supporting progress towards decarbonisation targets.
“This is a fantastic example of how transformative M&A can be. It shows how the right acquisition can help a business strengthen its offer and differentiate from their competitors,” says Financial Advisory partner Daniel Grosvenor, who leads the firm’s work with Masdar.
“We developed a trusted relationship with Husain and his team on the project and have since supported them on a number of others.”
“Deloitte has been extremely supportive from the beginning,” says Husain. “Not only with knowledge and understanding of the industry, different players and the complicated business model of battery storage, but also with what’s required to achieve the right transaction.”
By aligning two companies’ climate-related goals, the transaction shows how M&A opportunities can help businesses deliver value beyond the deal. Masdar asked us to find a developer with the right capabilities and experience, which brought an interesting extra dimension to the transaction.
“Masdar and Arlington shared the same long-term ambition of supporting the UK energy transition in terms of boosting BESS,” says, Maggie Mu Zhen Xue, a director in our Financial Advisory practice.
“We had the opportunity to develop specific criteria with Masdar, based on its needs. Our knowledge of the energy transition market and in-depth discussions with BESS developers meant we were well placed to able to find to help Masdar find the perfect match in Arlington.
“It’s a strategic move for both parties, that aligns the right capabilities for growth.”
