BOM gives energy transition a boost

Innovation and risks go hand in hand in the energy storage project of the Bio Energie Centrale Cuijk (BECC). That made financing the e-boiler and battery not easy. However, the existing relationship with the Brabant Development Agency BOM offered a solution with advantages for both parties.

"We believe in BECC as an Energy Hub, and we expect a lot from it," says Koen den Houting, Investment Manager of Renewable Energy at BOM. "Stimulating the energy transition is one of our tasks. This project is all about development and investment, with which Brabant contributes to the realization of sustainability objectives. This will be one of our first operational storage projects to support. Then more will become possible after that."

BOM sees entrepreneurship as a driver for change, whether it concerns sustainable food, a healthy future, climate-neutral energy, or the development of promising key technologies. The Brabant Development Agency ensures that start-ups contributing to this get off to a flying start with the proper support and financing. The BOM also supports companies with internationalization ambitions. Each year, BOM creates an impact together with dozens of companies. The BOM is an implementing agency of the province of North Brabant and the Ministry of Economic Affairs & Climate.

The BOM got to know the partners in BECC in 2015. This involved the takeover of the shutdown power plant in Cuijk from RWE/Essent, with the aim of using the energy production for industrial heat supply from now on – a novelty at the time.

Paul Gosselink, program manager at the BOM: "Industry and the economy are changing in Brabant. The effective and smart use of raw materials and energy is necessary to achieve cost benefits and minimize the environmental burden. The companies located on the regional industrial estates and the sites themselves date from before the financial and environmental crisis. Therefore, they are set up with completely different starting points. Keeping up with current developments made it necessary to improve the use of energy and raw materials at all industrial sites in the province of North Brabant. Forty percent of the energy consumption by companies in such areas is heating. That is why BOM wants to focus fully on the method of the residual flows broker in this project. It looks for opportunities for residual flow exchange and control of energy consumption and production. It also supervises the implementation of the detected opportunities. With the SEL project, the BOM incorporates the example of a local smart grid: a thermal smart grid installed from an existing biomass power station in Cuijk. Because the contacts with the initiators were present and the main features with BECC were known, it was good to include that."

Food industry without a gas connection

With the support of European funds, BECC was able to expand the heating network to serve the new customer Duynie, a producer of plant-based pet food. "BECC supplies them with 12 megawatts of thermal power, they do not need a gas connection, and that saves 6,000 tons of CO2 per year," Gosselink summarizes one of the results.

Soon, BECC and BOM discussed more sustainable ideas, such as expanding the power station with a battery and an e-boiler. Koen den Houting: "The Netherlands and Brabant have firm targets for CO2 reduction and renewable energy generation. BOM tries to contribute to these objectives by developing and investing in sustainable energy projects. At the same time, the electricity grid is filling up in more and more places. Furthermore, due to the increase in renewable energy, it is becoming more challenging to match the supply and demand of electricity at any time of the year. Using energy storage technology, such as batteries and e-boilers, can contribute to reducing these bottlenecks within the energy transition."

Banks want to contribute as long as guarantees exist. That is why we have provided a subordinated loan.

Koen den Houting, Investment Manager Renewable Energy at BOM

Banks want guarantees

Energy storage projects have much more volatile income compared to sustainable energy-producing assets such as solar and wind farms. Due to the higher degree of volatility and uncertainty in cash flows, financing energy storage projects is not yet commonplace in the Dutch financing market. Den Houting: "Banks want to contribute as long as guarantees exist. That is why we have provided a subordinated loan."
BECC used the loan for the e-boiler and was able to finance the battery through the specialist leasing company Beequip – a signal that battery projects are slowly but surely on the rise. Den Houting: "You have to be convinced of the contribution to the energy transition, and you have to have some understanding of it. Storage is a new specialty. That is why I am pleased with all the studies we have carried out with BECC to determine which approach is sensible."

It's not just a financial story, adds Gosselink: "If you look at what the plant supplies in terms of green energy, we are talking about another 90-gigawatt hours or 46,000 tons of CO2 reduction on an annual basis."

All in all, the installation in Cuijk allows the BOM and BECC to show the outside world something. Den Houting: "By supporting this project, BOM makes it possible, on the one hand, to realize a relatively large energy storage project by Dutch standards, which contributes to stabilizing the energy market and makes it possible to make a business park more sustainable. In addition, this financing provides the opportunity to gain more knowledge of the storage market, which can be applied to the structuring and financing of storage projects around the solar and wind farms of which BOM is a shareholder or co-shareholder."