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Renderings of a proposed 325-megawatt battery storage facility in Killingly that were submitted to the Connecticut Siting Council. Developers pulled their application for the project in June. Credit: Connecticut Siting Council

Plans to develop one of New England’s largest battery-storage facilities in the rural northeast corner of Connecticut fizzled in part due to the developer’s unease with rising tariffs and President Donald J. Trump’s rollback of federal incentives for renewable energy, according to a consultant for the project.

Applications for the proposed 325-megawatt facility in Killingly were withdrawn in June by the Israel-based developer, Sunflower Sustainable Investments. At the time, representatives for the company said little about their rationale for the move, which came less than a year after the project was submitted to the Connecticut Siting Council for approval.

But Jonathan Milley, a consultant and spokesman for the project, said in an interview with the Connecticut Mirror this week that capital costs were projected to increase between 30% and 50% due to tariffs and recent changes in federal tax incentives for renewable energy projects. Those issues, combined with a rocky outlook for offshore wind and more general economic uncertainty, all contributed to the project’s demise, he said.

“It became entirely untenable,” Milley said. “It was just was much, much too risky to warrant going forward with the investment.”

The Killingly project — also known as the Windham Energy Center — had an estimated budget of $200 million and would have taken a little more than a year to build. The plans called for a series of large batteries housed in dozens of prefabricated storage containers, as well as an electrical substation connecting to nearby transmission lines.

Construction of the project would have employed up to 40 people at a time, in overlapping crews, according to documents submitted to the siting council.

Milley explained that the Killingly project was planned as a so-called “merchant” storage facility, meaning it would purchase electricity off the grid at times when renewables such as solar and wind were supplying lots of low-cost power. That electricity could then be stored and sold back onto the grid at other times, such as in the evening, when demand is higher but renewables are not operating at their peak.

In particular, Milley said the project’s developers were hoping to tap into an abundance of wind power produced by several planned turbine farms off the Atlantic Coast.

But because merchant projects operate without long-term power purchase agreements with utilities or other customers, Milley said they also carry more risk for investors. A recent downturn in the offshore wind industry that was exacerbated by the Trump administration’s opposition to wind power made the battery project even harder to pull off, he said.

The location of the proposed battery facility — on a property that had previously been slated for construction of a natural-gas-fired power plant — also added to the list of difficulties facing the developers.

The company behind the failed gas plant proposal, NTE Energy, still held a certificate of approval from the siting council to develop the property. Therefore, attorneys for Sunflower Sustainable Investments, the battery developers, had to file a separate request for the council to reopen that approval process for the purpose of resolving the issue.

Milley said that attorneys for the project initially believed the issue with the certificate would be quickly resolved, but it ended up delaying the project while the outside political and economic landscape worsened.

“This is a compendium of foreign investors looking at the situation, going around and saying, ‘You know what? This is way too much uncertainty,'” Milley said. “Any one of these things is difficult. We could have analyzed any one of them in isolation… but the compendium of everything was just too much.”

In addition to the Killingly project, Milley said that Sunflower Sustainable Investments had recently decided to terminate similar battery projects under development in Texas and South Carolina.

Ken Gillingham, an energy and environmental economist at Yale University, said that Milley’s explanation of the company’s decisions made sense given the wider challenges facing the industry under the Trump administration.

“It’s become impossible to plan right now in the renewables and battery space,” Gillingham said.

In April, Trump announced tariffs of up to 125% on Chinese goods as part of a back-and-forth series of trade threats between the two counties. While those duties were later pared back to around 30%, the Trump administration has proposed additional tariffs on specific components that go into the production of batteries, namely graphite and copper, that could significantly impact their cost. All of those tariffs remain subject to ongoing talks between the U.S. and China, and the Trump administration is expected to extend its current Aug. 12 deadline for reaching a deal, according to the Associated Press.

China dominates the market for utility-scale batteries, currently producing upwards of 80% of the world’s cells, according to Bloomberg. Other major producers include Japan and South Korea, both of which have been slapped with additional tariffs by the Trump administration.

In addition to tariffs, President Trump last month signed Congressional Republicans’ tax and spending bill that included a rollback of many existing tax credits for renewable energy projects. Those changes have roiled plans by other developers to install new, carbon-free sources of power.

“For projects that are already under construction, or just about under construction and fully permitted, they’re still moving forward right now,” Gillingham said. “But it’s that next tranche of projects, and [Killingly] was in that category, it’s pretty clear that there’s a lot of uncertainty.”

While the bill left in place tax credits for battery projects, Gillingham said that lawmakers included new requirements on applicants to source more of their materials from the United States. Depending on how strictly the federal government enforces those requirements, Gilligham said they have the potential to significantly increase the cost of future projects.

In documents submitted to the Connecticut Siting Council, the developers for Killingly facility said they planned to use batteries produced by CATL, a Chinese company whose production is almost entirely located overseas.

CATL is known for its production of lithium iron phosphate batteries, a technology that it marketed as safer alternative to more traditional lithium-ion batteries that can erupt into intense fires caused by thermal runaway. The risk of fire was one of several concerns raised by town officials in their initial response to the developer’s application with the siting council.

However, those concerns had not formed into formal opposition to the project from the town before the developers pulled their application, according to correspondence submitted to the siting council.

Killingly’s economic development director, Jill St. Clair, said in an email last month that the only explanation the developers gave to town officials was that the project was canceled due to “changing market conditions.” St. Clair did not respond to additional requests for comment this week.

Connecticut Mirror reporter Jan Ellen Spiegel contributed to this article.

John covers energy and the environment for CT Mirror, a beat that has taken him from wind farms off the coast of Block Island to foraging for mushrooms in the Litchfield Hills and many places in between. Prior to joining CT Mirror, he was a statewide reporter for the Hearst Connecticut Media Group and before that, he covered politics for the Arkansas Democrat-Gazette in Little Rock. A native of Norwalk, John earned a bachelor’s degree in journalism and political science from Temple University.