Recurrent Energy Completes Majority Sale of 1.4 GWh Energy Storage Reliability Project in California

Rhea-AI Summary

On Sept. 8, 2021, Canadian Solar, via its subsidiary Recurrent Energy, announced the sale of an 80% stake in its 350 MW / 1400 MWh Crimson storage project to Axium Infrastructure. This marks Canadian Solar's first stand-alone storage project, expected to begin construction in Q3 2021 and operational by summer 2022. The project includes contracts with Southern California Edison and Pacific Gas and Electric to enhance California's grid reliability. This partnership reinforces Canadian Solar's market leadership in battery storage solutions.

Positive

• Sale of 80% stake in Crimson project boosts liquidity and investment opportunities.
• Crimson project is the largest stand-alone storage project developed by Canadian Solar.
• Contracts with Southern California Edison and Pacific Gas and Electric enhance revenue potential.

Negative

• None.

GUELPH, ON, Sept. 8, 2021 /PRNewswire/ -- Canadian Solar Inc. ("Canadian Solar" or "the Company") (NASDAQ: CSIQ) today announced that its wholly-owned subsidiary, Recurrent Energy, LLC ("Recurrent Energy"), sold an 80% stake in its 350 MW / 1400 MWh Crimson storage project to Axium Infrastructure ("Axium"). Recurrent Energy will retain the remaining 20% ownership. Construction of the storage project will begin in Q3 2021 and is expected to reach commercial operation by the summer of 2022. 

The Crimson storage project is Canadian Solar's first stand-alone storage project and the largest developed to-date. It holds two energy storage contracts with local utilities, namely:

• Phase I: 200 MW / 800 MWh 14 year and 10 month contract with Southern California Edison ("SCE") under a full tolling agreement, and
• Phase II: 150 MW / 600 MWh 15 year contract with Pacific Gas and Electric ("PG&E") for Resource Adequacy only; Recurrent and Axium will operate the battery system in the wholesale California wholesale power market

Canadian Solar's majority-owned CSI Solar subsidiary will provide both EPC (engineering, procurement, and construction) and long-term operational services for the Crimson storage project.

"Global efforts towards a clean energy transition are generating a surge in demand for battery storage capacity to support more reliable power grids. At Canadian Solar, we are doing our part by expanding our market leadership position in battery storage and executing on our pipeline," said Shawn Qu, Chairman and CEO of Canadian Solar. "Through the Crimson storage project, we are collaborating with our partner Axium to help improve California's grid reliability and safety by providing critically-needed resource adequacy capacity to meet electricity demand in all scenarios. Once it reaches commercial operation, Crimson will be one of the largest battery energy storage projects in the world. We are pleased to work with Axium as we execute and complete the majority sale of the project."

"The Crimson partnership with Canadian Solar and Recurrent marks Axium's first investment in battery storage. This important project will support the integration of additional sustainable energy projects to help achieve California's ambitious energy and climate change goals," said Thierry Vandal, President of Axium Infrastructure US Inc.

Both contracts are part of reliability procurements directed by the California Public Utilities Commission ("CPUC"). Located in Riverside County, the Crimson project will support California's decarbonization and reliability goals with additional non-emitting, clean resource adequacy capacity. The U.S. Interior Department's Bureau of Land Management issued final approval earlier this year as the Crimson project is sited on public lands in the California desert.

About Canadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar technology and renewable energy companies. It is a leading manufacturer of solar photovoltaic modules, provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. Over the past 20 years, Canadian Solar has successfully delivered over 59 GW of premium-quality, solar photovoltaic modules to customers across the world. Likewise, since entering the project development business in 2010, Canadian Solar has developed, built, and connected over 6.1 GWp in over 20 countries across the world. Currently, the Company has around 400 MWp of projects in operation, nearly 6 GWp of projects under construction or in backlog (late-stage), and an additional 16 GWp of projects in pipeline (mid- to early- stage). Canadian Solar is one of the most bankable companies in the solar and renewable energy industry, having been publicly listed on the NASDAQ since 2006. For additional information about the Company, follow Canadian Solar on LinkedIn or visit www.canadiansolar.com.

About Recurrent Energy (Canadian Solar Subsidiary)

Recurrent Energy is a leading utility-scale solar and storage project developer, delivering competitive, clean electricity to large energy buyers. Based in the U.S., Recurrent Energy is a wholly owned subsidiary of Canadian Solar Inc. and functions as Canadian Solar's U.S. project development arm. Recurrent Energy has approximately 5 GW of solar and storage projects in development in the U.S. Additional details are available at www.recurrentenergy.com.

About Axium Infrastructure Inc.

Axium Infrastructure (comprised of Axium Infrastructure Inc. and its affiliated entities) is an independent portfolio management firm dedicated to generating long-term investment returns through investing in core infrastructure assets. Axium Infrastructure had over US $5 billion in assets under management as of June 30, 2021, as well as approximately US$1.4 billion in co-investments. The firm benefits from the capabilities of a group of specialists with decades of experience acquiring, developing, financing, operating and managing infrastructure assets. Focus is placed on assets that are supported by robust market demand and under long-term contract with creditworthy counterparties. Since 2010, the firm has invested in a diversified portfolio of over 165 North American infrastructure assets. For further information, including information about other infrastructure assets the firm has invested in, please visit www.axiuminfra.com.

Safe Harbor/Forward-Looking Statements 

Certain statements in this press release, including but not limited to the use of proceeds, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the "Safe Harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include general business and economic conditions and the state of the solar industry; volatility, uncertainty, delays and disruptions related to the COVID-19 pandemic; governmental support for the deployment of solar power; future available supplies of high-purity silicon; demand for end-use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand from major markets such as Japan, the U.S., India, China and Brazil; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; delays in utility-scale project approval process; delays in utility-scale project construction; delays in the completion of project sales; delays in the process of qualifying to list the CSI Solar subsidiary in the PRC; continued success in technological innovations and delivery of products with the features customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange rate fluctuations; litigation and other risks as described in the Company's SEC filings, including its annual report on Form 20-F filed on April 19, 2021. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. Investors should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information, except as required under applicable law.

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SOURCE Canadian Solar Inc.

FAQ

What is the significance of Canadian Solar's sale of the Crimson storage project stake?

The sale of an 80% stake in the Crimson storage project enhances liquidity for Canadian Solar and allows for continued investment in renewable energy initiatives.

When is the Crimson storage project expected to be operational?

The Crimson storage project is expected to reach commercial operation by the summer of 2022.

What are the key contracts associated with the Crimson storage project?

The project includes a 14-year contract with Southern California Edison for 200 MW / 800 MWh and a 15-year contract with Pacific Gas and Electric for 150 MW / 600 MWh.

What does Canadian Solar's partnership with Axium Infrastructure entail?

The partnership marks Axium's first investment in battery storage, focusing on enhancing California's energy reliability and sustainability goals.

How does the Crimson project impact California's energy grid?

The Crimson project will provide resource adequacy capacity, supporting the integration of sustainable energy and improving grid reliability in California.