Kansai Electric Power Group and Hartree Partners sign first term contract in Japan coupling LNG supply with carbon investments. 

Singapore, 14 August 2024: Hartree Partners (“Hartree”) today announced that it has signed a ten-year agreement with Kansai Electric Power Group (“Kansai Electric”), enabling Kansai Electric access to high-integrity carbon credits in Australia. The agreement expands the companies’ partnership, first announced 14 December 2023, and will support Kansai Electric’s Zero Carbon Vision.

Ahmed S Al-Awa, Managing Director of Hartree Partners Singapore Pte. Limited, said, “Hartree is deeply committed to the Japanese carbon market, and we are excited about the opportunity to expand our presence, drive sustainable solutions and support our partners to help achieve Japan’s national net zero targets.”

About Hartree Partners

Hartree Partners, LP is a leading global merchant commodities firm specializing in energy and associated industries. Established more than 25 years ago and jointly owned by senior management and funds managed by Oaktree Capital Management, L.P., Hartree has a unique 25+ year track record in proprietary trading and investing in energy markets across the globe. Hartree’s core strengths are understanding the complexities of the global commodity market and risk pricing and converting that knowledge into consistently successful trading strategies. Today, the firm has over 700 employees and a further approximately 1,000 associates in its operating companies and a strong balance sheet available for trading and principal investment purposes. For more information, please visit www.hartreepartners.com

AGP Sustainable Real Assets Pte Ltd (AGP) and Hartree Partners, LP (Hartree) today announce the launch of AMPYR Energy USA, the second joint venture between the two organizations in just over a year.

AMPYR Energy USA will be headquartered in New York and is targeting to build a 5GW utility-scale solar PV platform across multiple US markets. With experienced renewables development professionals on the ground, the newly-created company will continue to leverage AGP’s experience in developing large-scale renewable power projects globally, and Hartree’s cutting-edge power trading analytics and zero-carbon solutions.

“With the Federal and State goals for accelerating the energy transition, the US will be one of the fastest growing solar markets in the world and a core strategic priority in realizing AMPYR’s ambition of becoming one of the largest independent renewables developer and operator globally,” said Saurabh Beniwal, Partner at AGP and Board Chair for AMPYR USA.

Since its inception in February 2021, Hartree and AGP’s European solar venture, AMPYR Solar Europe (ASE), is making swift progress towards its goal of rolling out 5GW of large-scale solar projects to establish itself as one of the largest utility scale solar platforms in Europe. ASE also recently closed a €400 million facility to support this plan.

Following in the footsteps of ASE, expectations are equally high for AMPYR USA.

“We are excited to take another step forward with AGP into the US market,” said Stephen Semlitz, Managing Director of Hartree. “This new venture allows us to further demonstrate our decades of experience in finding investment solutions, consulting, and generating sustainable and commercially viable strategies for energy renewal and regeneration.”

To learn more about the new US venture visit: www.ampyrenergyusa.com

AMPYR Solar Europe (ASE), a pan-European solar developer, and Edinburgh Airport Limited today announce the signing of a deal to develop a new solar farm linked with battery technology and electric vehicle charging infrastructure at Scotland’s busiest airport.

Under the agreement, ASE along with its local construction partner, Absolute Solar & Wind will build approximately 9MW of solar PV, 1.5MW of battery storage and 40 EV charging points. The large ground-mounted solar PV system and battery will be situated next to the runway on a 16-acre plot of land, connected to the airport via a high voltage private wire network.

The development will be a cornerstone of Edinburgh Airport’s goal to achieve Net-Zero by 2040 by generating clean, renewable energy that will cover about 30% of the airport’s total consumption.

“Our commitment to a net zero future is underpinned by the various strands of work we have going on across the airport as part of our Greater Good sustainability strategy and one of the most visible projects will be this solar farm,” said Gordon Dewar, Edinburgh Airport’s Chief Executive. “We are happy to confirm our partners in this exciting step and our collaboration will enable us to implement this technology and allow us and Scotland to benefit from it as soon as possible.”

The project is in the late stage of design, with construction planned to start this summer and be fully operational by the start of next year.

“We are really pleased to be partnering with Edinburgh Airport on this important step towards a net-zero future and in support of its impressive “Greater Good” sustainability strategy,” said Andrew Gould, Executive Chairman of ASE. “Edinburgh Airport’s leadership shows a way forward to zero carbon for the airport sector. This is the first of ASE’s five renewable energy projects in Scotland to reach the delivery stage: the commitment and support of the Scottish Government and its strong policy position on climate change is clearly attractive to international investment.”

Edinburgh Airport will purchase the power produced by the solar farm through a long-term Power Purchase Agreement with ASE. This PPA will generate long-term energy and carbon savings for the airport.

“We are delighted to support Edinburgh Airport with its ongoing drive to reduce its carbon impact,” said Matthew van Staden, Senior PPA Originator at Hartree Partners. “Through our expertise within Hartree and AMPYR Solar Europe, we can drive and deliver innovative energy solutions for companies within energy-intensive sectors. Our understanding of sustainable generation and commercially viable strategies in this space helped bring this project to life for Edinburgh Airport.”

The construction is further supported by the Scottish Government’s Low Carbon Infrastructure Transition Programme, which have provided a grant for a portion of the capital expenditure.

“We are proud to be delivering this pioneering project and helping to decarbonise Edinburgh Airport alongside our funding partners ASE and the Edinburgh Airport project team,” said Tom Newall,  Managing Director at Absolute Solar & Wind. “The co-location of utility scale battery storage and solar PV has enabled us to maximise the green energy generation on site whilst working with the grid connection constraints. We look forward to entering the construction phase before progressing to carry out the operation, maintenance and optimisation of the system, as it generates clean power for years to come, providing energy security for a major, Scottish transport hub.”

AMPYR Solar Europe (“ASE”) LP, a pan-European solar IPP established by AGP Sustainable Real Assets, Hartree Partners and NaGa Solar, today announced the closing of a € 400 million facility with CarVal Investors (“CarVal”) to support ASE’s plans to bring over 2GW of solar power capacity into operation by 2025.

“One year after its inception, we couldn’t be more proud to have reached this key milestone in ASE’s journey to become a leading European solar IPP,” said Andrew Gould, Executive Chairman of ASE. “With the support of CarVal as our capital partner, we are on a steady path to turn our fast-progressing pipeline into a portfolio of large-scale solar power producing assets, that will contribute meaningfully to Europe’s energy transition.”

CarVal has made available an initial tranche of € 250 million as well as a further incremental tranche of € 150 million. This facility will predominantly cover the construction costs of solar assets as well as providing some development capital and operational expenses. The initial focus will be on sites in Germany, Netherlands, and the UK with the facility having the potential to extend to other European jurisdictions as well as allowing for funding of energy storage projects.

“We are excited to have ASE as one of our partners as we expand our footprint in the rapidly evolving clean energy transition,” said Jonathan Hunt, Managing Director at CarVal Investors. “We view the breadth of skills and track record of the team as market leading and look forward to funding their growth. The capital-intensive nature of the clean energy transition means that partnerships like this remain one of the largest opportunity sets for CarVal.”

ASE expects to break ground on its first projects in the second quarter of this year and be operational by the end of the year. By 2025, once fully deployed, the generating portfolio is expected to be among some of the largest utility scale solar platforms in Northern Europe.

“This transaction is yet another testament to the increasing investor engagement on the climate crisis, which cannot be resolved without massive private capital contribution,” said Elmahdi Tahri, AGP Partner and Global CIO of AMPYR Energy. “We are pleased to partner with CarVal Investors to help accelerate the transition to a zero-carbon Europe, and look forward to replicating this model across AMPYR Energy’s renewable platforms globally.”

The recent gas crisis in Europe has highlighted the urgent need for more renewable energy sources to reduce the continent’s dependency on gas and other fossil fuel sources. This initial 2GW development forms a significant part of ASE’s overall ambition to roll out 5GW of large-scale solar projects in Northwest Europe.

“Volatile and competitive power markets increasingly require solar developers to optimise between long-term power purchasers, the grid and storage assets,” said Abraham Kozhipatt, Partner and Co-Head of Renewable Infrastructure Assets at Hartree Partners. “ASE combines the partners’ strengths in asset development and merchant market risk management and we are delighted that CarVal recognise and support our strategy.”

Akereos Capital acted as sole bookrunner, structurer and exclusive debt advisor to AMPYR that was also advised by Reed Smith (legal). CarVal was advised by Norton Rose Fulbright (legal), ARUP (technical) and Baringa Partners (commercial).

What started out a couple of months ago as a surge in prices amid low wind and concerns about storage levels has fast accelerated into a full-blown crisis with new records being set on an almost daily basis, resulting in about 2 million households seeing their energy supplier go bust and the UK government forced to step in and help out energy intensive businesses.

At the start of October, the UK gas price passed 400p per therm during extremely volatile trading, with intraday gains up to 39%. Although prices have dropped since the early October pinnacle, the UK’s fundamental outlook hasn’t changed. The supply/demand balance for this winter is still tight and prices are likely to remain elevated for a number of months yet.

So far, the rise in wholesale prices have forced 15 suppliers of gas and electricity to UK homes go out of business with likely further casualties yet. The more recent rise of storage levels to around 77% full is, however, providing a glimmer of hope to gas balances.

While the energy price cap, which limits the rates a supplier can charge a domestic customer for their default tariffs, is protecting households, there is no such mechanism in place for businesses who have to absorb ever-higher gas and power prices into their production and manufacturing costs. For the most energy-intensive companies, this has forced them to consider whether they can continue operating in the current environment.

A prime example was fertilizer manufacturer CF Fertilisers shutting sites in September before the government agreed an exceptional 3-week arrangement with the company that allowed it to continue operating. With CF Fertilisers also the UK’s largest producer of carbon dioxide, the government went a step further and forced the CO2 industry to agree a price for CF Fertilisers’ supplies while global gas prices remain high.

This government intervention has led to other energy intensive industries, such as steel producers and paper mills, similarly calling for help to see them through this period of elevated prices.

These price surges and extremely volatility in gas and electricity prices highlight the value Hartree Solutions can offer to energy intensive businesses by developing localised generating assets such as solar, combined heat and power (CHP) or battery storage and then optimising the asset to ensure it provides security of supply and protects businesses from these wild price swings.

This gas crisis is set against the backdrop of the UK’s ambitious target to eliminate fossil fuels from electricity generation by 2035, which Prime Minister Boris Johnson announced at the start of October. With gas and coal the source of more than 36% of the UK’s electricity in 2020, the country needs to set clear policy to meet these goals. For example, in just a few months’ time the government-backed Capacity Mechanism, designed to ensure the UK’s security of supply, will likely contract new gas generators that will be providing power well past this 2035 target date.

The National Grid’s recently released Winter Outlook states that “there is sufficient generation availability and interconnector imports to meet demand” while warning the network provider may well have to issue Electricity Margin Notices (EMNs), particularly in December through to mid-January when tight margins are likely. Last winter, the Grid issued six EMNs, the first time it has had to resort to these measures since 2016, further illustrating the challenges the country faces as it transitions towards a renewable future.

One unwitting side effect of the extreme gas prices is that coal generation has become profitable again. With emitters needing to buy more carbon allowances to cover this unexpected coal usage, the cost of these permits has risen sharply too increasing the likelihood of the government being forced to involve itself in this market too.

The UK created its own Emissions Trading Scheme earlier this year, after leaving the EU ETS as a result of Brexit, if the carbon price remains high for another two months the Cost Containment Mechanism (CCM) will be triggered in December. The mechanism enables the UK ETS Authority to intervene if the average allowance price is double the average price for 3 consecutive months. The average carbon price in September was £58.36/ton, more than 10% above the threshold needed to trigger the CCM. If the average price stays above £52.88/metric ton in October and November, then the authority will consider what action to take.

With so many different strands to the energy markets and the potential for government intervention across a broad range of factors, Hartree Solutions’ 20+ years expertise in tracking and understanding energy markets along with advanced asset optimisation can help support businesses through these unprecedented, headline-making times.