The Caisse de dépôt et placement du Québec, the public pension fund of Québec, announced Thursday it is acquiring a 25% stake in First Hydro Co., which operates electricity generation and storage facilities in the U.K.
The C$452 billion ($335.5 billion) CDPQ acquired the stake from Brookfield Asset Management, while French energy firm Engie SA owns the remaining 75%.
First Hydro manages and operates two power stations in the Snowdonia region of Wales that have more than 2,000 megawatts of combined capacity, which the company said accounts for 76% of the U.K.’s total pumped storage. According to the company, pumped storage hydroelectricity works by using two reservoirs at different altitudes, so that when water is released from the upper reservoir, energy is created by the downflow, which is then directed through high-pressure shafts that are linked to turbines.
The turbines power the generators to create electricity, while the water is pumped back to the upper reservoir by linking a pump shaft to the turbine shaft that is driven by a motorized pump powered by the national grid. According to the company, the process usually takes place overnight when national electricity demand is at its lowest.
According to Engie, any greenhouse gas emissions from hydropower are usually due to the use of cement; however, it added that the emissions are insignificant.
“This investment marks our first foray into pumped energy storage and we are delighted to join forces with Engie, a long-standing partner of CDPQ and a global leader in the energy sector,” Emmanuel Jaclot, CDPQ’s head of infrastructure, said in a statement.
While the deal is subject to customary approvals, CDPQ expects the deal to close by the end of the year. Financial terms were not disclosed.
On Wednesday, the fund announced plans to develop a portfolio of forestland investments located in the northwestern U.S.
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Tags: Brookfield Asset Management, Caisse de dépôt et placement du Québec, CDPQ, Emmanuel Jaclot, Engie, First Hydro, hydroelectricity, pumped storage, Renewable Energy