Big Players Spin the Wheel for the $45B Energy Storage Jackpot

July 11, 2017
Companies and investors are striking deals in rapid rounds, chasing an energy storage jackpot expected to reach $20.5 billion to $45 billion globally by 2022.

Players in the booming energy storage market are like contestants running the board on “Jeopardy” before solving the puzzle on “Wheel of Fortune.”

Investors are taking risks and companies are striking deals in rapid rounds, chasing a big jackpot that is expected to reach $20.5 billion (Navigant Research) to $45 billion (AES) globally by 2022.

In the first two days of this week, alone, came two mega scores.

Today, it was the announcement of a new joint energy storage joint venture, Fluence, formed by giants Siemens and AES. Yesterday, it was Advanced Microgrid Solutions (AMS) snagging another round of funding, $34 million to be exact, with strong utility-backing.

See related story: Two Giants, Siemens and AES, Create ‘Fluence’ to Pursue Global Energy Storage Market

In creating Fluence, Siemens brings its microgrid controller capabilities, along with inroads into commercial and industrial energy storage market. AES brings its speciality in utility scale storage.

Like many other recently announced initiatives, Fluence is pegged in part to the renewables market. Batteries inject quick energy into the grid when the wind suddenly ceases or the clouds hide the sun.

AMS, too, sees grid stablization as a primary market for energy storage.

“One of the greatest challenges facing utilities, customers and grid managers around the world is managing distributed energy resources,” said Hans Kobler, CEO and managing partner of Energy Impact Partners (EIP), a utility-backed investment firm that is leading AMS’ new funding round, along with utility giant Southern Company and DBL Partners.

Or as Michael Donnelly, chief risk officer and EIP partner put it, “The smartest investments in grid infrastructure in the coming decade will be focused on the economics of DER management.”

But AMS, as well as Fluence, also are looking beyond stablizing renewables to other attractive opportunities in the energy storage market, such as reducing demand charges for commercial & industrial customers or averting the need for utilities to invest in more expensive capital-intensive grid upgrades.

Other participants in the latest AMS funding round include energy technology and infrastructure companies GE Ventures, AGL Energy Limited and Macquarie Capital. Early AMS backers also are re-investing, among them former California Governor Arnold Schwarzenegger.

Last week it was microgrid and battery storage company Younicos in the limelight with word that it was being acquired by Aggreko for $52.7 million. Again, the companies highlighted the critical role batteries will play on grid increasingly characterized by renewables and distributed energy

“Off grid and microgrid energy solutions are ever more integrating renewable generation, whilst industrial and commercial customers are also taking advantage of opportunities for renewable integration and demand-side management,” the companies said in a joint statement.

Younicos has offices in the U.S. and Germany. The acquisition gives it a worldwide footprint, given Aggreko’s reach in the global power equipment market.

Courtesy Aggreko/Younicos

As energy markets continue to decarbonize, decentralize and become more digital, the integration and control of multiple energy sources, including thermal and renewable, will be essential to ensure the provision of reliable power,” said Chris Weston, CEO of Scotland-based Aggreko. “As a pioneer of smart energy solutions based on battery storage, Younicos is at the forefront of this trend. Together we are a powerful combination; our scale, fleet and global presence, coupled with a smart energy capability, will allow us to open new markets and provide our customers around the world with a reliable, cheaper and cleaner source of energy.”

Meanwhile Tesla, ever the newsmaker, this week has been broadcasting its plans to install the world’s biggest battery storage project, a 100 MW/129 MWh Powerpack for South Australia.

Tesla won the contract in a competitive bid issued by the South Australian government after a storm caused a statewide power outage in September that left 1.7 million people without electricity. Again, the deal was about using storage to manage renewable intermittency, as well as manage peak load and help avert power shortages. Tesla’s battery will charge from Neoen’s Hornsdale Wind Farm near Jamestown, South Australia. Tesla was awarded the entire energy storage system component of the project.

Tesla expects to complete the installation by December.

Earlier in the year several other companies spun the wheel with marquee deals, among them:

  • Ormat Technologies $35 million acquisition of software and microgrid company Viridity Energy, a move that diversifies Ormat into energy storage and demand response
  • Italian energy giant Enel’s purchase of U.S. based energy storage and microgrid company Demand Energy
  • Wartsila’s move into energy storage with acquisition of U.S.-based Greensmith Energy

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About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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