Copenhagen Infrastructure Partners (CIP), on behalf of its fund Copenhagen Infrastructure IV (CI IV), has signed an agreement to divest a 50% ownership stake in Coalburn 2 to funds managed by AIP Management (AIP), a specialist investor in energy and decarbonisation infrastructure. Once operational, the new project will be among Europe’s largest battery storage facilities, supporting grid stability and the integration of renewable energy generation.
Coalburn 2 is a 500MW, 2-hour duration, lithium ion battery energy storage system (BESS), located in South Lanarkshire, in southern Scotland. CIP took a financial investment decision for Coalburn 2 in December 2024 and will continue to lead the Coalburn 2 project delivery through its current construction phase. Coalburn 2’s 50% ownership stake transfer to AIP shall occur upon site commissioning. The project has a high level of contracted revenues through a 10-year optimisation agreement with SSE, alongside a 15-year capacity market agreement, providing visibility and a stable foundation for returns while maintaining exposure to market upside.
Coalburn 2 is one of three transmission-connected BESS assets co-developed by Alcemi and CIP, that are currently being constructed 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 over 4.5mn households for two hours. CIP is developing a further 4.5GW of BESS projects across Scotland and England.
Coalburn 2 is part of an expanding CIP portfolio of UK energy infrastructure investments – which alongside the company’s portfolio of battery projects across the US, Europe and Australia makes it one of the leading investors of battery storage projects globally.
For AIP, the investment in Coalburn 2 marks a significant step in its strategy to build a portfolio of high-quality battery storage assets that provide flexible capacity to the UK’s electricity system. AIP focuses on investing in assets that are either ready to construct or operational, avoiding early-stage development risks. It follows AIP’s recent investment in a 2.4 GWh portfolio of operational and under-construction BESS projects, reflecting its growing presence as a long-term investor in the UK energy storage sector. To date, AIP’s investments have a combined capacity of approximately 7 GW, which collectively will contribute to avoiding 10 million tonnes of greenhouse-gas emissions.
Nischal Agarwal, Partner at CIP told The Voice of Renewables: “As CIP’s development and construction portfolio of UK BESS projects continues to progress and grow, we look forward to welcoming AIP as a new partner on our Coalburn 2 site, which once commissioned in 2027 shall be Europe’s biggest operational BESS project. The delivery of Coalburn 2, alongside CIP’s Coalburn 1 and Devilla projects, will improve the UK’s energy security, enable more low cost renewables to be delivered, and will reduce costs for British consumers through enhanced system flexibility.”
Greg Falzon, Partner and Co-Head of Investments at AIP, said: “This investment reinforces our conviction in the UK energy storage market and reflects our strategy of partnering selectively on high-quality, ready-to-build or operational assets. Together with our recent Ardenham investment, it forms part of a growing portfolio that combines strong downside protection with long-term value creation.”
