CEP.Energy’s $1 billion C&I rooftop rollout

A bold new player has sprung up in Australia’s C&I renewable-energy space. Within five years, CEP.Energy plans to have 1.5 GW of solar and 1 GW of battery energy storage providing a steady flow of low-cost energy for tenants of some 10 property-portfolio partners via microgrids and virtual power plants distributed across industrial and retail rooftops in South Australia, Victoria, New South Wales and Queensland. 

CEP.Energy is a green energy fund, on its way to raising $1 billion in capital required for its power-plant development from institutional investors such as superannuation funds; it has signed its first property partner, Pelligra, which owns several hundred C&I properties; and it has just announced an MOU with Marubeni subsidiary, SmartestEnergy, to manage its first 400 MW of VPP assets and retail energy to Pelligra tenants at an anticipated 20% saving on grid prices.

Chaired by former New South Wales Premier Morris Iemma, the fund’s executives include Marjorie Maydwell (ex Energy Australia and AusGrid) as Head of Embedded Networks, Dan Lowenthal (coming from senior roles in Schletter Australia, DECMIL and SunEdison) as  Head of Installations, Jan-Adrian Muller (ex Tesla C&I Project Development in Australia) as Business Development Manager, and Peter Wright, a former executive of Macquarie Bank, as CEO.

Wright told pv magazine that CEP.Energy’s motivation is to retain, if not attract manufacturing in Australia, by making operations more affordable, and clean energy more reliable, thereby generating jobs as well as low-carbon electricity — his climate-minded investors expect nothing less.

“It’s very much an infrastructure play,” says Wright, “no different to the development of a toll road or a port; you need to take a long-term position, so we take leases [on rooftop real estate] of up to 45 years.” 

Solar all over

Hectares of solar will be roof mounted, installed as shade over car parks, and in some cases ground mounted, depending on the property.

Tier 1 solar contractors RACV Solar, LendLease and Autonomous Energy are poised to begin work on installations in Victoria as soon as Stage 4 lockdowns are lifted, and Wright anticipates “significant rollout” of solar-battery systems across the eastern states and South Australia in 2021, with the aim of reaching 400 MW of aggregated virtual power plant installed within three years.

A big bank of battery storage

In addition to distributed battery storage, CEP.Energy plans to deploy three utility-scale batteries — one each in Victoria, South Australia and New South Wales — to ensure ongoing reliability and sustained energy supply to customers; to trade energy markets; and potentially to provide services to the grid.

“Trading is part of it, FCAS is part of it. Do we have a role in stabilising the grid? It’s not what we’re setting out to do,” says Wright, “but it could be a by-product.”

Two of the batteries will be positioned adjacent to CEP.Energy’s industrial-estate microgrids, the third, in south-western Sydney, in the the vicinity of the new Aerotropolis, “is not co-located, but it’s got a suitable, robust grid connection and that’s really the key,” says Wright.

He told pv magazine that CEP.Energy is on the verge of signing a second property portfolio partner that is “very much focused in the Badgery’s Creek area”. He adds that although Sydney’s new airport has been “a slow burn, it will be a spectacular growth corridor”.

Applying muscle to make it in Australia

Despite its inhouse Tesla association, Wright says the fund is agnostic when it comes to both battery and solar providers. “Certainly Tesla is in the mix, but there are others.

“As a former banker, I’m conscious of the concentration risk — we don’t want to be beholden to any one manufacturer,” he says adding that the Fund will work with “global, best-of-breed players”.

CEP.Energy is, however, prepared to be biased towards providers that embody “some degree of local manufacturing or assembly — we think that’s really important” says Wright. He adds that the scale of the project gives the fund some influence, such that, “We’ve commenced discussions with a number of parties to consider setting up local manufacturing or at least assembly; we’d like them to support Australia.”

Phase 1 development of the fund’s linked infrastructure will focus on tenant fulfilment, primarily in the industrial and large-scale retail sectors; but Phase 2, which could roll out contemporaneously to the first scope of work, will consider producing electricity excess to tenant needs, which CEP.Energy would contract via power purchase agreements to serve the decarbonising needs of commercial properties that don’t have significant roofspace.

No software partner yet

Asked about the energy management system proposed for coordinating CEP.Energy’s vast orchestra of resources, the CEO said, “Given the scale we’re rolling out, the ideal will be to have a really intelligent piece of software that can do some of the heavy lifting.”

He says that some potential software partners with whom CEP and SmartestEnergy are in discussion, “have AI in place, but I don’t see a day where we’re reliant on it. 

“There are a lot of stakeholders that need both a financial and non-financial return out of this, so there’ll always be close oversight.”

C&I retail smarts

SmartestEnergy entered the Australian market in May this year, with a track record of successfully supplying some 2,000 commercial and industrial energy users in the UK, winning awards for its customer service in delivering tailored solutions.

CEO of SmartestEnergy Australia, Robert Owens, said in a statement celebrating the MOU with CEP.Energy that the project “will shape the way renewable energy generation and storage projects are delivered at scale, leveraging the latest technology”.