Engie Buys 80% of California Battery Company to Boost Storageby
The first utility to take a majority stake in storage firm
Oil major Total spent $1 billion on battery maker in same week
The Courbevoie, France-based company that was formerly GDF Suez acquired 80 percent of Green Charge, it said Tuesday in a statement. It deploys batteries for commercial and industrial clients to lower their peak electricity demand, saving money. It has 48 megawatt-hours of projects across 150 sites.
“Utilities have been dipping their toes in energy storage, testing to see if the space is interesting, but this is the first time that we’re seeing one go much further with a deeper engagement,” said Logan Goldie-Scot, an analyst at Bloomberg New Energy Finance. “Utilities are earning less from their core businesses and many are looking to diversify, with a stronger focus on clean energy and downstream services.”
Low power prices are forcing utilities to reexamine their business models and seek new ways of making money. Interest in energy storage is growing as companies and governments seek to integrate more solar and wind into the grid. Baseload power from gas and coal-fired plants is still needed to balance the grid, which batteries could perhaps replace one day for a full transition to a clean-energy system.
Energy majors are taking note. Total SA spent $1.1 billion on French battery maker Saft Groupe SA earlier this week in a push to expand in renewables. The offer valued Saft at nine times its 2015 reported earnings before interest, taxes, depreciation and amortization.
“With Green Charge, Engie immediately gains a strong position in the growing battery storage market in the U.S.,” said Frank Demaille, president of the North American unit of Engie. “This acquisition will also reinforce Engie’s strengths and skills in the activities of decentralized energy management, off-grid solutions, and power reliability, which are identified as areas for growth for the company around the world.”
Other utilities have taken minority stakes in energy storage companies. RWE AG led an investment round that raised $45 million for battery start-up Stem Inc. last August and EON SE funded storage developer Greensmith Energy Management Systems Inc. in September.
Engie said last year that it will invest 5 billion euros ($5.7 billion) in customer service, which includes smart grids and energy storage. The value of the transaction wasn’t disclosed.