Orrick Advises Recurrent Energy in Joint Venture Formation for 350 MW Crimson Battery Storage Project


We advised Recurrent Energy, a leading utility-scale solar and storage project developer and wholly-owned subsidiary of Canadian Solar, in connection with its joint venture formation with Axium Infrastructure for the combined 350 MW Crimson battery storage project in Riverside County, California. Under the joint venture, Recurrent sold an 80% stake in the project to Axium Infrastructure and will retain the remaining 20% ownership. The project will begin construction in Q3 2021 and is expected to reach commercial operation by the summer of 2022. Once it commences operation, the Crimson storage project is anticipated to be one of the largest battery storage projects globally.

Recurrent and Axium will jointly operate the project under the CAISO wholesale electricity market, while Canadian Solar's CSI Solar subsidiary will provide EPC and long-term operational services. The project will operate under two phases, including a 200 MW, 14 year and 10 month full tolling agreement with Southern California Edison (SCE) and a 150 MW, 15 year resource adequacy only contract with Pacific Gas and Electric (PG&E). The energy storage contracts will operate as a part of reliability procurement requirements directed by the California Public Utilities Commission and will help SCE and PG&E to meet their clean energy mandates. The Crimson project will address critical resource adequacy needs to improve California's grid reliability and resiliency and will further California’s decarbonization goals. The energy storage market is poised to continue to grow rapidly to meet the surging demand for clean energy globally.

Orrick advises market participants on all aspects of battery storage transactions, including contract structures and issues, regulatory developments, ITC and tax issues and state procurement developments. The project was led by John Cook and Kristin Seeger and included Suchil Samant, Scott Cockerham, Molly Jergenson and Josh Emmett.