Revolve Grows its Distributed Generation Portfolio by an Additional 3.2MWh
VANCOUVER, BC, Sept. 15, 2022 /PRNewswire/ - Revolve Renewable Power Corp. (TSXV: REVV) ("Revolve" or the "Company") is pleased to announce that it has signed an energy services contract for a new 3.2MWh ("megawatt per hour") Battery Energy Storage System (or "BESS")(the "Project"). This is the first BESS project signed under the Company's recently established distributed generation (or "DG") business and complements the recently completed acquisition of Centrica Business Systems (Mexico) (see News Release dated August 29, 2022 (https://money.tmx.com/en/quote/REVV/news/5305963835965510/Revolve_Acquires_100%_of_Centrica_Business_Solutions_with_Operating_Assets_and_Recurring_Revenue_Stream). The Project increases the Company's DG capacity in operation and under construction by 50% to approximately 9MWh.
- The 3.2MWh battery storage system will be installed at the site of a major hotel chain in Cancun, Mexico.
- Revolve will be the owner of the Project with responsibility for the financing, installation and operation of the BESS system.
- A 10-year Energy Services Agreement (or "ESA") has been signed between the Company and the hotel operator for the provision of peak shaving and other energy related services.
- Under the ESA agreement Revolve will receive an annual fixed payment in addition to sharing the energy savings delivered by the Project over the 10-year contract period.
- An Engineering Procurement Contract (or "EPC") has been signed with Quartux Mexico S.A. de C.V. (or "Quartux"), a highly experienced installer and operator of battery storage systems in Mexico, to deliver a turnkey solution for the installation and commissioning of the BESS system.
- In addition to the EPC a 10-year Maintenance Agreement has also been signed with Quartux for the day-to-day operation and optimization of the system including all routine maintenance.
- The Project is targeted to be operational in Q1 2023 and will add to the recurring revenue base established by the Company with the recent acquisition of Centrica Business Solutions (Mexico). An updated financial forecast for the Company's DG division is currently being completed and will be released in due course.
- The project is expected to cost approximately US$1.8m to install and commission including all related financing and transaction costs.
The Project will be financed through a combination of cash on hand and a new CAD$1.86m secured loan (the "Secured Loan") to be provided by RE Royalties Ltd (or "RER"). The financing agreements will consist of a secured loan agreement and a royalty agreement between Revolve and RER. Finalization of the financing agreements is expected to be completed in the next few weeks.
The Secured Loan will be drawn down per a schedule commencing upon signing of the definitive financing agreements and will have a term of 24 months. It will be repayable at maturity, bear interest at 12% on drawn funds, with interest payable on a quarterly basis during the term. The Company will pay RE Royalties a financing fee of 2% of the Secured Loan amount on signing. The Secured Loan will be secured by certain assets of the Company. The Company will also enter into a royalty agreement with RER under which RER will receive a royalty of 5% on gross revenues generated by the Project for the term of the ESA.
Mr. Eric Hickert, CEO of Revolve Business Solutions, commented: "We are extremely pleased to sign our first battery storage as a service deal and to add further contracted capacity to our growing distributed generation business. We are also particularly excited by the partnership with Quartux and are looking forward to working with them on similar projects over the coming months."
Mr. Alejandro Fajer, COO of Quartux Mexico, S.A. de C.V. commented: "In Quartux we are very happy to collaborate with Revolve in a strategic project that will open the door to many opportunities and will further strengthen our position as leaders in the energy storage sector in Mexico and LATAM."
All transactions over the course of this contract as well as the Agreement with the installer will be in Mexican Pesos. For ease of reference all dollar amounts have been presented in U.S. dollars at exchange rate of One Mexican Peso (MX$) to 0.05 US dollars (US$).
Distributed Generation (or "DG") is an approach to the provision of energy by deploying tools, most commonly solar and battery storage technologies, near end consumers of power. The power generation and storage units are typically installed on rooftops or near the power consumer and provide power direct to the customer (often described as "behind the meter" power, as opposed to purchasing electricity off the "grid").
The business model for Revolve entails installing power systems at its own cost at customer premises and selling the renewable energy produced from these systems back to its customers on long-term Power Purchase Agreements or Energy Service Agreements. The primary target market is large commercial and industrial enterprises, including manufacturing operations and hotel chains.
Revolve was formed in 2012 to capitalize on the growing global demand for renewable power. Revolve develops utility-scale wind, solar and battery storage projects in the US and Mexico with a portfolio of 3,700MW under development. The Company has a second division, Revolve Renewable Business Solutions which installs and operates sub 20MW "behind the meter" distributed generation (or "DG") assets. Revolve Renewable Business Solutions currently has an operating portfolio of 2.85MW with an additional 3MW in the construction phase.
Revolve has an accomplished management team with a demonstrated track record of taking projects from "greenfield" through to "ready to build" (or "RTB") status and successfully concluding project sales to large operators of utility-scale renewable energy projects. To-date, Revolve has developed and sold over 300MW of projects.
Going forward, Revolve is targeting 5,000MW of utility-scale projects under development in the US and Mexico, and in parallel is rapidly growing its portfolio of revenue-generating distributed generation assets.
Although Revolve believes, considering the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because Revolve can give no assurance that they will prove to be correct. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the business plans of Revolve and Revolve's management's expectation on the growth and performance of its business in the United States and Mexico, including the planned MW capacity of its projects; its expansion into the distributed generation market; potential opportunities in the distributed generation market; the completion and timing of the development of its planned portfolio of distributed generation projects; the completion of the Transaction, including final approval of the transaction by the TSXV; potential revenues and cashflows generated from its DG division; and the Company's plans to develop, construct and finance rooftop solar, battery storage and energy efficiency projects of up to 5MW and enter into long term power purchase agreements for the sale of electricity from the projects with the underlying customers. Such statements and information reflect the current view of Revolve and/or Revolve, respectively.
The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to the extent of regulations pertaining to the Company's projects and Revolve's ability to continue as going concern. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information, including but not limited to: the effects of weather, catastrophes and public health crises, including COVID-19; labour availability; disruptions to the Company's supply chains; changes to regulatory environment, including interpretation of production tax credits; armed hostilities and geopolitical conflicts; failure to obtain necessary regulatory approvals in a timely fashion, or at all; risks related to the development and potential development of the Company's projects; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; the availability of tax incentives in connection with the development of renewable energy projects and the sale of electrical energy; as well as those factors discussed in the sections relating to risk factors discussed in the Company's continuous disclosure filings on SEDAR. Such statements and information reflect the current view of Revolve. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
The forward-looking information contained in this press release represents the expectations of Revolve as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Revolve does not undertake to update this information at any particular time except as required in accordance with applicable laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE ReVolve Renewable Power Corp
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