Spanish oil & gas group Repsol made its debut in the US renewables market with a deal to acquire a 40% stake in solar and battery storage project developer Hecate Energy.
Hecate holds a portfolio of more than 40GW of renewable and energy storage projects that are under development, including 16.8GW of solar at advanced stages of development, as well as Hecate Grid — a battery platform for energy storage with 4.3GW under its wing.
Repsol did not provide financial details of the transaction, but said it has the option to acquire Hecate’s outstanding shares three years after the closing of the deal.
"The agreement will make Repsol a significant player in the US solar and battery storage development market through its participation in Hecate Energy’s renewable project development business," Repsol said on Thursday.
“With this acquisition we enter the US renewable market with the best possible partner and advance our strategic objective of becoming a global low-emissions operator,” Repsol’s executive managing director of client and low-carbon generation, Maria Victoria Zingoni, said.
“We continue to demonstrate our commitment to multi-energy and move forward with the transformation of Repsol into a net-zero emissions company.”
Founded in 2012, Hecate has to date sold on 2.6GW of renewable energy projects. The majority of its assets are based in a trio of US electricity markets: the Electric Reliability Council of Texas (ERCOT); the Western Electricity Coordination Council; and PJM Interconnection.
"Its portfolio of PV [photovoltaic] solar projects under development is one of the largest in the country, and it is geographically diversified," Repsol claimed.
Repsol said the deal to acquire the substantial stake in Hecate advanced its key goals of geographic diversification of its renewables business, improving its portfolio and adding a solid platform with strong growth potential.
Last year Repsol kicked off the international expansion of its renewable business, with a joint venture with Grupo Ibereolica Renovables,
That deal gave it access to a portfolio of assets in Chile that are anticipated to have a combined capacity of more than 1.6GW by 2025, and could potentially exceed 2.6GW by 2030.
Earlier this week, the company started construction of the first projects in the 860MW Delta 2 wind farm complex in the northeastern Spanish region of Aragon.
Repsol said last year it is targeting what it describes as low-emission generation capacity to reach 7.5GW by 2025 and 15GW by 2030, as it aims on reaching net zero emissions from its business by 2050. Although it includes gas-fired generation in its low-emission category, most of the projects will be from renewable sources.
The company’s 2021-2025 strategic plan has earmarked €5.5bn ($6.6bn) for low-carbon investments in that period, or 30% of the company’s €18.3bn forecast total investments over the period.
This article first appeared on Upstream, Recharge's sister publication for the oil & gas industry.