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Harmony Energy Income Trust Prepares for IPO and Aims to Raise Capital for 213.5MW of Energy Storage Projects

published: 2021-10-28 9:30

Harmony Energy Income Trust (HEIT), which is the investment arm of British energy storage developer Harmony Energy, announced on October 11 that it will be publishing a prospectus for IPO on the Specialist Fund Segment of the Main Market of the London Stock Exchange. According to the coverage provided by various renewable energy news websites, HEIT is seeking to first raise GBP 230 million that will be spent on acquiring 213.5 MW of shovel-ready energy storage projects. Harmony Energy specializes in integrated energy storage for PV and wind projects. It mainly adopts the battery technology from Tesla.

In the announcement, HEIT said that it is going to offer ordinary shares priced at GBP 1 per share and C shares priced at GBP 0.10 per share. The proposed placing program is expected to issue up to 250 million ordinary and/or C shares. The annual dividend yield is targeted at 8% and will be payable starting from 2023. Website Energy Storage News reported that the management team and associates of Harmony Energy will be able to subscribe for 2.5 million shares, provided that these share will also be locked up for five years.

HEIT will acquire a portfolio of five shovel-ready energy storage projects from Harmony Energy when its ordinary shares are admitted to the London Stock Exchange. The total storage capacity of the five projects comes to 213.5MW/427MWh. Following that, HEIT will acquire an additional 99MW/198MWh of advanced energy storage projects. HEIT also said that the proceeds from the IPO will help expand and diversify its energy storage portfolio. Website QuotedData reports that the market capitalization of HEIT is estimated to reach GBP 254 million on admission.

The projects in HEIT’s portfolio is expected to continue utilize Tesla’s technologies. Renewable energy news websites have reported that Harmony Energy has placed orders for the Tesla Megapack system and subscribed to the Tesla Autobidder platform, which is a software platform that optimizes the ability of an energy storage project to trade electricity in the market. These assets are also covered by a 15-year warranty.

With the five 213.5MW/427MWh shovel-ready projects and the 99MW/198MWh advanced projects, HEIT’s portfolio will reach 312MW/625MW. Furthermore, HEIT will have exclusive rights over 687.5MW of energy storage projects that are now being developed by Harmony Energy as well as preferential rights over Harmony Energy’s future projects.It is projected that HEIT’s portfolio will initially come to around 1GW.

Britain is one of the fastest-growing markets for energy storage systems in the world. The development of energy storage projects in the country is expected to be “supercharged” in the short term, especially as its government proceeds to reach its targets related to green energy transition while dealing with a serious power supply crunch that has emerged recently due to geopolitical factors. Moreover, Harmony Energy believes that the demand for battery energy storage will grow over the long run in relation to the increasing necessity of grid balancing and ancillary services. As the wholesale electricity market experiences greater price fluctuations due to the adoption of renewable generation technologies and other factors, there will be lucrative opportunities for project developers.

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