Canadian Solar Inc.’s ( CSIQ Quick Quote CSIQ - Free Report) subsidiary, Recurrent Energy, recently acquired two standalone energy storage projects from Black Mountain Energy Storage (BMES) in the Electric Reliability Council of Texas (ERCOT) market. The move is in sync with Recurrent Energy’s aim to rapidly grow its business in the ERCOT market and boost its storage pipeline portfolio. Details of the Acquisition
The projects, which are sited at the South Load Zone of the ERCOT market, claim a storage capacity of 200 megawatt-hour each. Recurrent Energy will be engaged in the next stage of developing the projects, finalizing entitlements and designs, selecting and procuring equipment, raising project financing as well as constructing facilities.
The two projects are estimated to reach the notice to proceed in 2023, while the operation is expected to commence in the second quarter of 2024.
Benefits of the Acquisition
The ERCOT region boasts ample wind and solar potential, which further supports the development of solar and wind projects in the region. This, in turn, leverages the expansion of corresponding energy storage projects in the region. Impressively, the annual deployments of grid-scale storage almost tripled year over year to more than 3.5 gigawatts in 2021, with California and Texas leading the growth, per the report from Wood Mackenzie's U.S. Energy Storage Monitor.
Hence, the region that entails such development capacity provides an edge for solar companies like Canadian Solar to benefit from the expanding market.
Also, Recurrent Energy has developed 2.9 gigawatt-hour (GWh) of energy storage projects and has an additional pipeline of 15.5 GWh of projects under early to mid-stage development. The two energy storage projects, which will be operational as merchant projects in the ERCOT market, add to its development project pipeline portfolio.
Such a solid pipeline of projects is likely to bolster CSIQ’s revenue generation prospects in the long haul.
Companies make strategic acquisitions to stimulate their growth trajectory and expand their businesses. In this context, solar companies that have engaged in valuable acquisition strategies are:
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industry’s growth of 7.8%. Image Source: Zacks Investment Research Zacks Rank
Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here