AXA IM Alts enters battery energy storage sector in the UK
AXA IM Alts has entered the battery energy storage sector in the UK, acquiring a 50% stake in the 500MW Coalburn 1 project in Scotland in what the alternative investment manager described as a strategic investment to support the UK energy transition.
The battery storage system in South Lanarkshire was on behalf of clients from Copenhagen Infrastructure Partners (CIP). Once commissioned, the asset will be the largest of its kind in Europe.
“Our investment in Coalburn 1 marks a significant milestone as we enter the UK energy storage market, reinforcing our commitment to supporting the transition to a zero carbon economy,” said Mark Gilligan, head of infrastructure, AXA IM Alts. “Battery storage infrastructure is critical to achieving national energy security and unlocking the full potential of renewable energy.”
Coalburn 1 is one of three transmission-connected battery energy storage sector assets being developed by CIP in Scotland, which collectively will have a total power capacity of 1.5GW and will be able to store and supply the grid with a total of 3GWh of electricity, enough to supply 4.5mn households for two hours.
CIP will continue to lead project delivery, with completion expected in early 2026 once Coalburn 1 becomes operational. The project’s revenues are underpinned by a 10-year offtake agreement, providing it with a source of secured revenues.
Battery storage is critical to enable a reliable and sustainable energy system, as renewable energy sources like solar and wind are inherently intermittent. Battery energy storage systems, which can charge when electricity prices are low and discharge during periods of high demand, provide flexibility to the grid, enhancing resilience, whilst also providing a consistent power supply.
As well as enhancing energy security, battery energy storage will be vital in meeting the UK Government’s targets of a fully decarbonised power market by 2035 and net-zero greenhouse gas emissions by 2050.
Located in Scotland, which contributes a large proportion of the UK’s renewable electricity production, and with a direct connection to the electricity transmission network, Coalburn 1 is strategically placed to support further renewables integration in the system by alleviating grid constraints and reducing costly curtailments to further optimise the efficiency of Scotland’s renewable energy output, which is projected to contribute a significant portion of the UK’s renewable energy by 2030.
AXA IM Alts said infrastructure is a strategic priority, as it plays a critical role in accelerating the transition to a carbon-neutral economy and meeting increasing investor demand for yield-generating markets that offer diversification and reduced volatility.
“This latest investment aligns with our strategy focused on three key themes shaping 21st-century infrastructure: decarbonisation, electrification and digitalisation,” Gilligan said. “Our goal is to acquire essential, low-carbon companies on behalf of our clients and to establish long-term partnerships with leading operators.”
