Econergy secures £42.7m financing for Immingham battery project

Santander has agreed approximately £42.7 million of project finance for Econergy’s planned 80MW/240MWh battery at Immingham in North East Lincolnshire.

The battery is expected to operate at its full rated output for around three hours, with the financing package including a main facility worth approximately £38.4 million, together with a VAT revolving facility and a debt-service reserve facility.

Ecoenergy plans to use the main facility of the funding towards construction costs, while also repaying shareholder loans that it needed during the development of the project. It won’t be paying back the loan by solely operating the battery project, however. 

Instead, Econergy has signed two 10-year revenue floor agreements with EDF, with each covering 40MW of the project.

With the agreement, EDF will optimise the battery across the markets available to it while guaranteeing a minimum level of annual revenue. Income earned above that floor will be shared between the two companies.

For Econergy, the attraction is straightforward. Battery revenues can move sharply as wholesale prices, balancing opportunities and demand for grid services change. A revenue floor gives the project a dependable base of income without removing its ability to earn more when market conditions allow.

Securing long-term revenues

Econergy expects the revenue floor and associated Capacity Market payments to generate between £45 million and £50 million over the 10-year agreement.

Capacity Market payments are expected to account for around 11% of that figure. Taken together, the contracted income is expected to represent approximately half of the project’s anticipated revenue over the period.

That degree of certainty will have helped secure the financing. Santander does not have to rely entirely on forecasts for merchant and balancing-market income, while Econergy retains exposure to revenues above the agreed floor.

The arrangement follows a similar deal for Econergy’s Dalmarnock battery project earlier in 2026, which also involved Santander and EDF.

Joshua Murphy, director of energy storage at Econergy, described the three-hour project as a milestone for the company.

“Once commissioned it will be among the largest batteries in the country operating above two hours,” he said.

This model of financing a project could ultimately become more popular, as it means firms can rely on a guaranteed income rather than hoping for the markets to pay back the cost of construction and development. It also follows some of the same logic as Ofgem’s cap-and-floor model, in that it protects the project against low revenues while sharing some of the upside. Except this time, it’s EDF that is taking the risk rather than consumers themselves.