Arsenal installs battery storage system

Posted in Corporate M&A and securities Football

Author: Alex Wills, Tom Maturi

Arsenal FC has recently installed the largest battery energy storage system in any UK sporting venue. Located in the basement of the Emirates, the Tesla 2MW/2.5 MWh lithium ion battery storage system (BSS) can power the 60,000 seat stadium for an entire match, which is equivalent to supplying energy to 2,700 homes for two hours. The installation is part of Arsenal’s plan to support green energy and cut down its own electricity costs. It also enables the club to access the energy market through its firm frequency contract with the National Grid.

The BSS was unveiled on 26 November 2018, following three years of development between Arsenal, battery developer Pivot Power and investment manager Downing LLP. The batteries are funded by Downing and operated by Pivot Power, with Arsenal leasing the required area for the BSS to Pivot Power.

The process involved persuading Arsenal’s stakeholders that the risks and liabilities of such a complex use of the club’s stadium was offset by the opportunity the project provided to pioneer new technology and enter a new market, while simultaneously reducing carbon emissions and cutting electricity costs.

On 27 November 2018, the BSS was switched on and is due to operate for fifteen years. The option exists to add an additional 1MW/1.2MWh of capacity to the system next summer, which would bring the total capacity to 3MW/3.7MWh in 2019. The BSS also allows Arsenal to minimise their exposure to peak energy prices through purchasing power from their renewable electricity supplier Octopus Energy at cheaper times and stockpiling this electricity. In short, power is being bought by the operator when supply is high but demand low and then sold in peak periods, where demand is highest and so is the price. This also allows Arsenal to avoid buying energy for Triad charges (higher pricing for electricity used at peak times in winter by commercial entities) or during match days when energy costs can treble.

This also distinguishes Arsenal’s battery installation from a similar project at Amsterdam’s Johan Cruyff ArenA. At Ajax’s stadium, the battery is charged by solar panels on the stadium's roof, as well as using some grid supply, with a function to provide uninterruptible back-up power to the venue. In comparison, Arsenal’s BSS is not designed to stop the need for diesel generators for back-up power. Instead, the BSS will be used to automatically trade in real-time and is optimised by aggregate firm Open Energi in response to day-ahead, intra-day and real-time price signals.

As well as reducing its electricity bill, Arsenal’s BSS can also generate revenue for the club by providing services to the National Grid. The BSS allows the club to store and sell energy back to the grid, easing pressure on UK energy during times of peak demand. It has already secured a firm frequency response contract with National Grid, enabling the BSS to help stabilise the grid frequency if needed. The contract will use the battery to meet the needs of a 2MW contract won in September’s tender for delivery from 1 October 2019 for six months, ending 31 March 2020. Arsenal will therefore be assisting the UK’s transition to a low-carbon economy through helping the National Grid to balance its supply and demand. Income from the installation will be split between Pivot, Downing and Arsenal – the club opting for a share of these proceeds over a lease or rental model for the space at the Emirates.

The first of its kind project also follows Environment Secretary Michael Gove’s call on UK football clubs to step up their eco-friendly efforts, after a Daily Telegraph investigation revealed Premier League clubs have been slow to respond to the Government’s green targets. While other clubs have installed solar panels and taken similar green measures, Arsenal is believed to be the first Premier League club to install large-scale energy storage.

With thanks to vacation scheme student Isobel Whitby for her assistance in preparing this blog.

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