The APA Group (ASX: APA) share price is trading relatively flat this morning after the company announced its first hybrid energy investment. Shares in the energy infrastructure business are currently trading just 0.00% higher at a price of $10.12.
What is the investment?
APA Group announced a 2-phase power expansion agreement with existing customer Gold Road Resources Ltd (ASX: GOR) in Western Australia. It's a $38 million investment that will boost total installed capacity from 45MW to 64MW.
The agreement includes the creation of a hybrid energy microgrid, making it APA's first hybrid energy investment.
The company will carry out the upgrades in 2 phases. Firstly, APA will expand the Gruyere Power Station by installing a 12th reciprocating gas-fired engine. The expansion work is under way and expected to be finished mid next year.
In the second phase, APA Group will build, own and operate a 13MW solar farm. The hybrid control system will combine weather forecasting, battery control and existing engine control systems to optimise renewable use. Phase two is expected to be completed by the fourth quarter of 2021.
Commenting on the investment, APA CEO and managing director Rob Wheals said:
This new Gruyere battery storage and microgrid project is an exciting first for APA, demonstrating our ability to respond to the needs of our customers with world-class energy solutions.
Consistent with our purpose to strengthen communities through responsible energy, we are delighted to be working with the Gruyere JV on this innovative energy solution.
What now for the APA Group share price?
When completed, APA will be able to provide renewable energy supported by battery storage. Gas supply will continue on a take or pay basis through APA's interconnected gas pipeline network.
As such, the expansion of the power station complements APA's recent $460 million pipeline investment.
The APA share price has dropped 8% this year.
