Whenever I think back to 2023, one major sentiment that comes to mind is the urgent need for investment in Europe’s power grid system.

Interconnected renewables are coming online at a pace that the current grid infrastructure wasn’t built to withstand. And although the ramifications of this have started to show, investments seem to be able to bring relief.

Over the last week, this notion has been reinforced as some of Europe’s top utilities have released their financial results for the 2023 fiscal year.

The key takeaway, you ask?

Europe is finally investing heavily into its grid infrastructure with “record levels of investment” a phrase placed on repeat. The adage is sometimes followed either optimistically with “record investment plans” or more somberly with “it’s not enough.”

So, what does this tell us about the investment landscape within which grid business stands?

‘Plans’ are translating into action

Over the last week, utilities have released their financial results and laid out their investment plans for the coming years.

Germany’s 50Hertz is looking to invest €20.7 billion ($22.6 billion) in overhead power lines, on- and offshore cables, substations and other technologies, a three-quarter leapfrog compared to €4.8 billion ($5.2 billion) from the past half-decade.

E.ON is planning a €9 billion ($9.8 billion) increase to its 2024 to 2028 investment plan from €33 billion ($36 billion) to €42 billion ($46 billion), focusing on energy networks and energy infrastructure solutions.

And TenneT, which operates both in Germany and the Netherlands, is expecting to grow its investments to at least €10 billion annually.

Although very much welcomed, one tends to look towards ‘plans’ with a drizzle of scepticism. But what has been surprising is that these utilities and others are simultaneously announcing record investments in their 2023 results.

In Germany, E.ON invested €5.2 billion ($5.7 billion) in network expansion, modernisation, and digitalisation and 50Hertz invested €1.7 billion ($1.9 billion) in grid infrastructure.

TenneT invested €7.7 billion ($8.4 billion) between Germany and the Netherlands.

In the Netherlands, utilities Alliander, Stedin and Enexis each stated record levels of €1.4 billion ($1.6 billion), €1.214 billion ($1.327 billion) and €832 million ($909 million) respectively.

Penning an action plan and moving from paper to implementation are two very different challenges. It is encouraging to see this transition being made.

However, these statistics then beget a follow-up question:

Have you read:
Dutch demand continues to outstrip supply despite record grid investments
Europe’s DSOs set out Green Deal infrastructure priorities for distribution grids

Is it enough?

In the Netherlands, it is not.

Alliander states that despite their record investments and upward plan, bottlenecks will be recurring on the power grid for at least the next decade. Even though this has been a repeated news item in recent years, it still warrants worry.

A case study to illustrate this is that of Dutch-owned TenneT, which has been mulling sale of its German operations to Germany’s Federal government for months now.

According to Handelsblatt reportage, the Federal Ministry of Economics is very interested in the German TenneT subsidiary, as the company is responsible for important north-south electricity highways.

The Netherlands, on the other hand, want to sell because they are afraid of the billions of euros in investments that will be needed over the coming decade to make the power grid fit for purpose.

Additionally, although TenneT reported healthy financial results for 2023, underlying revenues decreased for the utility by €600 million ($655 million), driven by a decline in ancillary service costs.

Said costs originate in lower market prices for costs incurred by TenneT to compensate for grid losses, maintain energy balance in the grid and pay for alternative electricity routes in case of congested or unavailable grid sections, as is the frequent case in the Netherlands.

Grid congestion and outstanding customer connection requests in the Netherlands, states TenneT, are being addressed through the National Grid Congestion Action Plan (LAN) and “unorthodox measures”, such as flexibility mechanisms, with which TenneT operates the grid at its limits.

Grid congestion has been hampering the utility not only in the Netherlands but also in Germany, where numerous bottlenecks in the grid on land cause large wind farms in the North Sea to be curtailed and redispatch limits the generation of offshore wind power.

This not only affects the amount of electricity fed into the grid, but also impacts its price development.

Also of interest:
The biggest market trends according to energy experts at DISTRIBUTECH International
How to win the Home Energy Management business battle

What more do we need?

In its Electricity Grids and Secure Energy Transitions report, the IEA states that globally we need to add or replace 80 million kilometres of power grids. Global investments in grids, which has otherwise remained stagnant, now needs upwards of $600 million annually a year by 2030.

Additionally, citing data from 2021, the report finds that grid-related outages impacted the German economy by up to $3.6 billion, highlighting the role of the grid in minimising economic loss.

Illustrated by the cases of the Netherlands and Germany, Europe is clearly seeing its fair share of hurdles to be overcome, but positive signs can still be found if you know where to look.

Take for example the EU Grid Action Plan, which will improve access to finance for grid projects. The action plan is also expected to identify tailored financing models and increase visibility on opportunities for EU funding programmes for smart grids and distribution modernisation.

Although much more, both in terms of euros and cabled kilometres, is needed to reach a grid fit purpose, we can still be hopeful as plans are pushed into action.

How much are you investing into the grid now and do you think it will be enough to enable the energy transition? Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

With opinions ranging from AI to electrification and renewables, as well as plays made by non-traditional entrants, this edition of Smart Energy’s Power Playbook lays down how experts analyse the evolving energy market.

Digital adaptation

According to Brad Johnson, director of solution management for tech company Bentley, a key talking point has been blending in automation, from AI – the core focus during the DISTRIBUTECH conference – to machine learning and augmented reality.

“One of the trends we’ve noticed professionals talking about is how to blend all these technologies into utility practices in a way that’s approachable for professionals.”

To do so, he adds, human assistance will be crucial as a “first step into automation. Rather than just pushing the button and trusting the output will match, it means keeping close supervision on the technology.

“AI and ML technologies will offer that ability to peer into the process, provide supervision and remove barriers to adoption.”

Hitachi Energy’s Steven Kunsman and Tanya Wright also highlighted this push into the digital environment.

Wright, a vice president of marketing and communications, comments on Hitachi’s moves to “transform itself as a global conglomerate and become more digital, because they see that the world is transforming and changing and moving toward digitalisation across all industries, including energy.”

Also of interest:
How to win the Home Energy Management business battle
Revving up the V2G market

Referencing combined capabilities from Hitachi Energy, Hitachi Ventara (an IT services management company) and GlobalLogic (a digital engineering company acquired by Hitachi in 2021), the two reps comment that digital transformation has been a key thought in the mind of companies looking to grow.

Says Kunsman, head of global product management: “There’s competition and companies are looking to answer the question of (how to) position themselves…Utilities will be going through a huge transformation with their operational technology, including substations, where digitalisation and connectivity will lead this change.

“Increasing levels of renewables penetration and distributed energy resource (DER) plants are connecting to grids that traditionally were not designed for DER interconnection.

“For these changes, companies need to review their portfolio and solutions offering to identify gaps and develop strategies to either fill those gaps through various acquisitions or develop those capabilities within the organisation.”

Kunsman adds: “The biggest trend right now is the transition to clean energy and deployment of EV infrastructure. And from that perspective, every utility will have a role in this major transformation to be able to support this type of change in the marketplace.”

Electrification and the EV era

Kunsman’s commentary on digitalisation and EV interest came as no surprise. Utilities have increasingly recognised the increasing urgency of consumption management on the power grid as a high priority.

However, says Garret Fitzgerald of the Smart Electric Power Alliance (SEPA), although its importance is clear, this clarity is a recent phenomenon.

Fitzgerald, a senior director of research and industry strategy for transport and electrification, says that its importance only came onto the table over the last four to five years:

“I’ve been in this market for about 15 years and 10 years ago I started talking to utilities and advising them on the upcoming load growth from EVs and the subsequent planning that will be needed. But for five of those 10 years, most utilities said ‘It’s not a big deal. If they come, we’ll manage it.’”

Citing European policymaking and mandates for vehicle electrification, Fitzgerald says that signals are now being sent to OEMs to “invest billions and billions of dollars in battery manufacturing and EV lines.

“With all of that coming together at a global scale, utilities are recognising that the EV wave is here.

“When you see some of the sales figures for EVs – 25% in California and 10%, across the US – we see that it’s real.

“The biggest trend I’ve seen is that transition from three or four years ago of utilities being unsure of the EV transition to now acknowledging the need for load planning from their uptake and what this means for the distribution system and what it will require of regulators.”

Have you read:
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Renewable integration and non-traditional players

Of course, it is not only EVs that represent a significant load management challenge.

According to S&P Global analysis, clean energy technology investments in 2024 will rise by 10%-20% compared with 2023, with renewables continuing to take the lion’s share. This uptake was repeatedly cited as a key market focus.

“There is a much greater interest in integration of renewables than in the past and it’s growing all the time,” commented Phil Beecher, president and CEO of Wi-SUN Alliance, a California-based consortium of global corporations in the smart utility, smart city and IoT markets.

“Storage and EV charging continue to be areas of interest … However, we’re seeing huge growth in renewable activity in emerging countries, such as India and Latin America, where it seems to be taken very seriously.”

Echoing Beecher’s sentiments was Bryan Sacks, global CTO and solution leader for energy, environment and utilities at IBM, a tech company focusing on hybrid cloud and AI solutions.

“What I’m finding really interesting is non-traditional entrants into the energy market – for example, traditional oil and gas players – who are starting to invest heavily into technologies, such as batteries, EV charging stations and renewable generation.

“For example, we’ve started to see companies like Walmart, which has massive roof space for solar, looking at deploying this type of technology.”

According to Sacks, it is also worth watching how the energy market will evolve to take advantage of these new entrants.

“What impact is that going to have on the traditional energy regulated components of the marketplace that don’t necessarily have the same flexibility?

“The evolving interplay between the regulated market and other growth markets, as well as how utilities invest in non-regulated areas to take advantage of those spaces, will become fascinating to watch.”

Were you at DISTRIBUTECH International? What were your key takeaways and what are some of the most interesting trends you’ve seen emerging?

Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

According to Market Reports World, the global Home Energy Management Systems Market is expected to witness substantial growth from 2022 to 2028, reaching $3.5 billion by the end of the forecast period, up from $1.7 billion in 2021.

Fuelled by the increasing importance of intelligently managed energy efficiency for our power systems, the forecast for its growth is no surprise.

The potential of under-utilised sources of demand response within the residential sector has been a growing business interest as countries investigate newer, smarter ways of managing grid congestion.

What this has led to is a business battleground and, until recently, a largely fragmented market.

In one corner stand the original equipment manufacturers (OEMs) of clean tech assets, such as Heating, Ventilation and Air Conditioning (HVAC) systems, EVs and their charge points, as well as heat pumps and solar PV panels, to name some of the most popular.

In another are the optimisers and integrators, those companies who coordinate the flows of energy for optimal consumption, at times running interface with grid operators for demand response and flexibility services.

Then finally, we have the energy retailers, who buy electric power from generators at the wholesale level on behalf of their customers.

Have you read:
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‘Cap and floor’ scheme proposed for long duration storage investment in UK

For all these players, key to gaining market share will be convincing their customers that their products or services within the space are the most seamless.

For some, take market leaders such as Tesla or Octopus Energy, doing so largely on their own terms has been a very viable course of action.

But for others, whether HVAC providers, smart thermostat manufacturers or PV specialists and energy optimisers, more strategic footwork has been necessary, calling for acquisitions and strategic partnerships to consolidate their positions.

“The real war is about who will take ownership of being the ones that will convince the end customer to use their assets or their services.” So stated George Husni, LCP Delta’s head of business development.

Industry edge

According to Husni, in the battle between smart thermostat manufacturers and HVAC players, the former innovated user interfaces earlier giving them an edge, whereas “HVAC players lagged behind in developing the mobile application for end customers.

“We believe that within five years’ time integrated PV specialists, like 1KOMMA5°, as well as energy suppliers are expected to gain market share by offering a suit of solar-related offerings and innovative business models; smaller installers will be acquired and will phase out of distribution because they will not own the relationship with the final customers.”

Husni referenced key partnerships, acquisitions and strategic moves from the last quarter. Including a consolidation by emobility giant and Texas-based OEM Tesla, who has long dominated the EV realm, in 2023 they integrated the Powerwall system with their EV solar charging infrastructure.

In essence, Tesla owners using Tesla software, namely the Charge on Solar programme, can charge their vehicle using only excess solar power generated by their panels, alleviating stress from the grid of charging the EV and leading to a more energy-efficient home.

Tesla can thus be said to be a go-to case of an OEM leading the market on their own terms, consolidating their business across the Home Energy Management segment while maintaining their position as the EV leader.

Dominance in the realm also brings to mind the case of Octopus Energy, an energy supplier which, under its own retail brand, delivers customer service and energy products to 7.7 million households globally. Add in the influence of Kraken Technologies, Octopus’ tech arm and customer platform, and it is no wonder that the British player has been at the forefront of news headline the past few years.

According to Husni, there is a certain level of ‘concern’ about retailers in the market, about if and when they would decide to properly engage, as they already have an advantage from data and relationships from their customer base; a point made more pertinent by Octopus Energy’s stature.

But, of course, not everyone can be a Tesla or an Octopus.

Also of interest:
Revving up the V2G market
 Strong grid tech props up Siemens Energy in Q1

Home Energy Management: Consolidatory moves

Husni stressed key moves that have been needed by PV specialists in Europe, such as 1KOMMA5°’s acquisition of solar installers Zonduurzaam to enter the dutch market and experta solar to consolidate in Spain, as well as SolarEdge’s partnership with European heating manufacturer Vaillant to integrate Vaillant heat pumps into the SolarEdge Home ecosystem.

Further cases include the GridX and Sense partnership, focused on leveraging smart meters to provide consumers and utilities with better insights into energy usage and costs, as well as Sonnen integrating Nibe heat pumps into their virtual power plant programme.

On the energy supplier side, states Husni, Heatio partnered with E.on to provide its Energy as a Service solution through a home subscription product. The solution will integrate E.ON Next energy tariff and incentivises homeowners to improve the energy efficiency of their homes.

Take also Samsung’s smart home platform SmartThings, which partnered with energy related companies, such as Eve Systems in 2023 and British Gas earlier this year in January, to integrate products and track consumption.

In the partnership with Eve, SmartThings users will have the ability to reduce power consumption by monitoring individual devices that are connected to Eve’s smart plug, reducing utility bills by creating automation routines and setting timers to optimise energy usage.

The partnership with British Gas, described by British Gas’ parent company Centrica as “the exciting first step in a long-term venture”, sees British Gas’ PeakSave demand flexibility scheme integrate with SmartThings Energy, informing customers on the best times to use appliances to save money.

An energy integrator here, Samsung’s moves further cement its position in the market as an energy flow coordinator, interfacing both with energy companies and utilities to oversee consumption.

Such cases demonstrate the moves market players make to cement their position in the home energy management as it continues to consolidate. What are some of the key acquisitions and strategies you’ve witnessed within and think should be on our radar?

Let us know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

V2G systems have until recently been a technology in need of depth and exploration before fully coming onto the market as a widespread source of consumption management.

The systems involve electric-powered vehicles communicating with the power grid to sell demand response services, usually overseen by a third party, such as energy retailers or aggregators.

With increasing demand on the grid stemming from sources of variable renewable energy, it would be no exaggeration to call V2G a crucial component of the global energy transition.

According to IndustryARC, an analytics and consulting company, the global V2G market size is forecast to reach $28.12 billion by 2026, growing at a compound annual growth rate (CAGR) of 4.28% from 2021 to 2026.

Additionally, bidirectional charging – when electricity flows from the EV battery to the grid and then back to the vehicle – is a core component of this system and was analysed by ARC to grow at the fastest CAGR of 5.12% among the entire segment of charging types for electric vehicles over the forecast period.

Development of the tech surged in 2023, although companies seeking to invest in the market should still be selective about where they choose to do business.

According to AFRY Management Consultants Steffen Schaefer and Xavier Sichert in Market attractiveness for Vehicle to Grid, the ideal market for V2G would be one with a high share of intermittent renewable energy sources, a low share of interconnections with other countries and a high penetration of smart metering in private households and at corporate buildings.

In the meantime, as the market continues to develop, tech companies, automotive majors and utilities have been making moves.

This is what has caught our eye.

Octopus Energy launches first V2G tariff in the UK

Octopus Energy, the UK’s energy wunderkind, has launched the UK’s first mass-market V2G tariff, called Octopus Power Pack. The tariff uses V2G technology and Octopus Energy’s tech platform Kraken to balance charging and discharging when it’s best for the grid.

According to the company, the tariff works as a bolt-on that separates charging from the rest of the home and runs alongside each customer’s regular import tariff. Customers can also stack the benefits of payments for solar generation on top of this.

For eligibility, drivers need to stay below the usage limit of 333kWh per month and plug in their electric car for 170+ hours monthly (roughly six hours daily) to receive free charging. The rest of the process is automated.

Calculated under the assumption of 10,000 miles (16,093.44km) driven each year, the British energy giant claims that an average electric car driver will be able to save more than £850 ($1,070) a year in charging costs on the Power Pack, compared to charging on a standard variable tariff.

Octopus Power Pack is available to drivers with V2G-compatible electric cars, chargers and a smart meter available in the UK. Although there is currently only a limited number of car models that have this capability, car manufacturers such as Volvo, states Octopus Energy, have made commitments to release V2G-ready models soon.

The tariff also follows Octopus’ recent announcement of passing 200,000 customers signed up to its EV-optimised tariffs – Intelligent Octopus Go and Octopus Go – making up roughly a fifth of electric car drivers on UK roads.

The company clearly sees where the V2G segment is going and is preparing to be a key player.

Have you read:
Canada tests its first V2G for medium and heavy-duty EVs
China’s Reform Commission sets out V2G planning recommendations

V2G revenues

In the US, Nuvve Holding Corp. reported recurring revenues from its proprietary V2G services.

The tech company’s intelligent, cloud-based software, Nuvve GIVe, is a platform that transforms electric fleets into mobile storage resources, providing electric grid resilience while also generating recurring revenues to offset fleet operation costs.

In essence, multiple EVs would provide enough “smart load” energy to sell back to the market, providing a revenue stream and lowering the cost of owning the EV in the first place.

In its Q3 financial results, announced December 2023, the company’s CEO, Gregory Poilasne, said the company is on pace to increase its revenues by more than 50%, resulting from orders, sales and deployments of charging stations connected to the GIVe V2G software platform.

Additionally, in January, Nuvve announced a $16 million project win with Fresno Economic Opportunities Commission’s (EOC’s) 50-shuttle fleet, to electrify the fleet and implement its Nuvve GIVe software.

Nuvve assisted Fresno EOC, which is one of the largest nonprofit community action agencies in the US, in securing grant funding through the Carl Moyer Memorial Air Quality Standards Attainment Program and Pacific Gas & Electric.

OEMs & V2G

Tech companies, however, are not the only ones with claims to stake in the market. EV original equipment manufacturers (OEMs), for example, are arguably the most poised for market penetration as they are in the starting position of the race – they manufacture EVs, which are the backbone of the system.

Two weeks following Nuvve’s project win with EOC, Nissan announced the launch of a new service – Nissan Energy Share – in Japan, coming March 1, 2024.

The new service features Nissan-unique energy management technology that controls the charging and discharging of EV batteries.

The service comes after conclusion of the Japanese auto major’s research into the most efficient ways of managing energy through EVs. Specifically, Nissa conducted different studies and field tests in locations such as Fukushima, validating its proprietary technologies for autonomously charging and discharging EV batteries.

Offered primarily to companies, businesses and municipal governments, Nissan said that the service is designed to enable optimal energy management in line with the needs and circumstances of customers; a ‘one-stop service experience’, from planning and system build-out to maintenance operations.

In addition to the system itself, the auto major says users will be able to apply for different subsidies, although details have not yet been released.

Also of interest:
Power sector measures key for smart charging in emerging economies states IEA
Sweden’s Polestar launches vehicle to grid and virtual power plant projects

Time pressure

Although tech and automotive companies are making moves in the right direction, there is a palpable time pressure that we also need to be cognizant of.

The market is clear, but the problem of managing increased loads from soaring rates of renewables coming online and EVs coming onto the road will not be going away anytime soon.

In the Netherlands for example, the problem of renewable energy causing grid lock has given grid operators headaches for years already, causing them to increasingly turn to flexibility as a solution.

The compact country is expected to have over 10 million battery-electric cars on the road by 2044; but with a grid at capacity, managing this demand will continue to be a pain point, perhaps mediated by V2G.

Add to this the upcoming deadlines for bans on internal combustion engines (ICEs) – both Europe and the UK angling for 2030 – and the weight of this demand only increases.

Surely then, it only makes sense that we tap more into the market, which provides lucrative opportunities alongside a clear route to managing these critical demand spikes.

The pressure to rev up the V2G market has been gaining urgency and clearly top industry players are responding. But what do you think? Who do you see as leading the market and what more is needed, whether from policy or from technology, to propel the market forward?

Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are virtual power plant (VPP) provider Swell Energy’s acquisition of Renu Energy in Carolina, US, and Second Foundation’s acquisition of a Nano Energies brand in the Czech Republic.

Siemens Energy’s strong Q1

Revenue came in at €7.6 billion ($8.2 billion) reflecting a 12.6% increase, four months after the energy major reported a $5 billion loss and safety net from the German federal government.

In a release, the company said that, while all segments contributed to growth, the increase was particularly strong at Grid Technologies.

Exceptionally high orders exceeded an already outstanding level in prior year’s quarter, mainly driven by Grid Technologies’ product business and high-voltage direct current transmission system orders in Germany.

The company is further planning to achieve comparable revenue growth of 18% to 22% within the grid portfolio.

“The solid first quarter is encouraging, in part also due to project shifts, which are normal in plant engineering, especially with the market dynamics we are currently seeing,” said Siemens Energy CEO Christian Bruch in a release.

More from Smart Energy Finances:
Navigating the 2024 energy landscape
Acquisition to delist SMS from the UK

Swell Energy acquires Renu Energy Solutions

Swell Energy Inc., an energy management and grid solutions provider, has acquired Renu Energy Solutions, a Carolinas-based company that offers customised residential and commercial solar and energy storage solutions.

The combination brings together a complementary set of operational and technological capabilities as well as a bi-coastal presence to enable the deployment of VPPs in key energy markets.

With the combination of Renu’s seasoned project development capabilities and Swell’s financing and VPP technology platform, the combined company says it is now well positioned to expand its footprint across the Southeast and mid-Atlantic market, and contribute to the strong growth in residential and commercial solar and storage capacity in the region.

Since 2010, Renu has offered residential and commercial energy solutions with an emphasis on installations and energy monitoring services. The acquisition includes Renu’s solar and storage maintenance subsidiary, Sun Service Specialists, which serves both Renu and non-Renu customers with thousands of distributed energy resources (DERs) across the East Coast.

Also of interest:
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How AI and advanced analytics will be key for the grid of tomorrow

With Renu serving as a regional hub, Swell’s channel partner programme provides other residential and commercial solar companies access to customer acquisition resources, fluid supply chain, critical software tools, financial products, grid services offerings and the opportunity to become VPP co-developers alongside Swell.

“With rapidly growing energy demand, favourable policies, and high solar potential, the Southeast is quickly becoming one the most attractive markets in the country for solar and energy storage systems,” said Jay Radcliffe, President of Renu.

“Swell’s robust technology portfolio combined with Renu’s full-service in-house team and unique expertise will drive innovation and ensure clean energy solutions are not only accessible but also efficient, reliable and tailored to the individual needs of our customers.”

Second Foundation acquires DES Holding

Czech-based technology group Second Foundation has signed an agreement on the acquisition of DES Holding, a flexibility aggregator and member of the Nano Energies group.

The agreement was signed on behalf of Nano Energies by its owner Petr Zahradník. The transaction marks the next step in Second Foundation’s strategy to gradually shift from focusing purely on financial algorithmic trading towards reaping the benefits of energy flexibility and smart management in renewable and other sources of energy.

Under the new owner, DES Holding will continue to use the Nano Energies brand with which its customers and partners are familiar.

The transaction does not involve the Nano Green division, an energy supplier active in managing power generation and consumption in smart households. Rather, Nano Green will be acquired by current managers David Brožík, Jan Hicl and Lukáš Beneš, the owners of the S9Y software studio.

The three managers have been at the helm of Nano Green for the past year and a half and will acquire Petr Zahradník’s shareholding to become the sole owners of Nano Green.

“In early 2024, we plan to launch a new service for our customers. It will enable fully automatic management of electricity generation and consumption. By offering the service, we will open the door for owners of smart homes and small businesses to participate in balancing the grid. In other words, they will be able to earn money by shifting their power production and consumption across time segments,” said Jan Hicl, chief product officer at Nano Green, in a release, unveiling the company’s plans.

The acquisition by Second Foundation is already the second such transaction involving subsidiaries of the Nano Energies group. Second Foundation acquired Nano Energies Trade in early 2022.

The transaction is still to be approved by the Czech Office for the Protection of Competition (ÚOHS). It is expected that the transaction will be closed in the first quarter of 2024.

For the latest finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Distributech International in Orlando Florida later this month. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Power grid forecasting

One of the key recurring themes that has gained solid recognition over the last year has been the unarguable position of the power grid as an investment priority to reach global net-zero targets.

Across conference floors, including but not limited to Enlit Europe in Paris, the power grid has been highlighted as the investment priority as, without a reliable grid to transport energy, how will we get renewables flowing from A to B?

As reported by the International Energy Agency (IEA), the world’s electricity use needs to grow 20% faster in the next decade than it did in the previous one.

This in turn presents a significant investment opportunity: meeting such a target equates to adding or refurbishing a total of over 80 million km of grids by 2040, translating to an increase in investment, for example by 2030 nearly doubling to over $600 billion per year after over a decade of stagnation at the global level.

Compounding this priority, states the IEA, is the fact that at least 3,000GW of renewable power projects, of which 1,500GW are in advanced stages, are awaiting grid connections.

Moves are already being made to combat these connection queues, especially in the UK, where policy is pushing out ‘zombie projects’ to open up space for new connections.

Considering this, there is little doubt that the power grid will continue to be a focal point of investments, be it to speed up connections, or even to enable flexible means of coordinating power consumption.

Flexibility is the latest buzzword

Whether on the residential or large consumer side, flexibility has over the last 365 days been developed as a means of alleviating surging levels of demand off the power grid.

As it does not necessarily imply the build out of new infrastructure, rather leveraging smart software to manage power already being produced and consumed, it opens avenues for grid operators to tap a heightened level of grid management.

One European country in particular that has been investing and doubling down on flexibility as a tool is the Netherlands, where earlier this year an official government position was opened up for a flexibility coordinator.

The compact country has and continues to experience bottlenecks on its power system due to investments in renewable energy outpacing that of infrastructure build-out. The result has been a much-needed pivot to smarter means of coordinating how power is distributed.

Whether through new deals in the realm of vehicle to grid technologies, or new types of flexibility tenders and capacity restriction contracts emerging, deals within the realm of flexibility will prove an interesting space as innovative solutions only continue to launch in the realm of smart energy management.

Have you read:
Swiss electric companies to establish joint market for flexible service procurement
Flexibility platform to offer ‘one stop shop’ for global electricity markets

Artificial intelligence: from concept to application

When it comes to innovation, 2023 has been a year of immense developments for clean tech and software, one of the most prominent being that of artificial intelligence.

In fact, it would not be an exaggeration to say that 2023 has been the year of AI, especially so when we look at its application in the energy sector.

Analysis from the IEA links the development and innovation of AI technologies as a key factor in the success of power grid systems; as a powerful analytical tool, it allows for flexibility to be unlocked by forecasting supply and demand, preventing grid failure through predictive maintenance and enabling digitalisation.

And across the sector, this has been recognised with investors showing a lot of interest in it’s application as an energy transition driver.

Smart Energy Finances this year reported on several deals being made within this realm, including Finnish energy tech startup Capalo AI’s €500,000 ($531,445.50) pre-seed funding to develop its AI-based virtual power plant (VPP) and market optimisation platform, Amperon Holdings’ $20 million Series B round to boost its AI-powered grid analytics platform and growth financing for the Australian company Neara, an infrastructure modelling platform that uses AI to create 3D, network-wide models for engineering-grade simulations and analytics, among more.

Deals surrounding AI are certain to continue into the next year and it will be interesting no doubt to watch the money flow between VCs, utilities, clean tech companies and startups.

Specifically, according to research from Precision Reports, top AI manufacturers in the energy sector to keep your eye on include players such as Enlighted, Grid4C, Siemens, Schneider Electric, IBM, BuildingIQ, Watty, General Electric, Alphabet and ABB.

A platform to keep on your radar

Thinking back on the year that was, one company in Spain has repeatedly announced several project initiatives and developments: Elewit.

A technological subsidiary of the Red Eléctrica Group – a partly state-owned and public limited corporation which operates the national electricity grid in Spain – Elewit has this year announced several innovative technologies, including hybridised supercapacitors, substation automation and more.

However, one project from the company has been in the incubation phase – the Strategos project, which proposes to develop an advanced software tool to help prioritise and optimise the planning of Red Eléctrica’s investment projects.

Specifically, Strategos is a calculation tool that will allow the TSO to optimise their portfolio of investment projects to develop and maintain the electric transportation network in line with their particular needs and circumstances.

The project applies machine learning (ML) techniques to coordinate decision-making when executing a set of investment projects, further simulating and estimating the risks associated with project implementation.

The minimum viable product for the project has already been successfully developed and Red Eléctrica is currently collaborating with AlchemyML, a solution for data exploitation, to carry out subsequent fully functional versions of the tool, that can then be marketed towards third parties.

The expected end date is February 2025.

Also from Smart Energy Finances:
Acquisition to delist SMS from the UK
SparkMeter funding, Elia in the US and AI assisting investments
Purchasing electricity indexed to stock exchange prices

A deal to round off the year

With the new year around the corner, most companies will have wound down their operations.

Although this is traditionally the case, there has been one major deal that is worth mentioning – Octopus Energy Group has secured an $800 million investment from existing shareholders to accelerate their global clean tech growth, now valued at nearly $8 billion.

At the same time, the company’s subsidiary Kraken Technologies has acquired Sennen to improve their renewable energy management capabilities.

The UK energy giant has had a major year in 2023 and so it is no surprise that they announce more growth a breath away from the start of the new year; it will be worth keeping an eye on.

Said Greg Jackson, Octopus Energy‘s founder, in a release on their growth: “…we’ve built the UK’s leading specialist electric vehicle leasing business, in just two years we’ve almost doubled our renewable generation portfolio to £6 billion ($7.6 billion), and tripled the contracted accounts on our technology platform Kraken from 17 million to 52 million.”

Read the full story

These have been the key finance and investment priorities we’ve seen from the last year and our predictions for the next.

But what do you think? What will shape the year to come in the realm of smart energy finances and how do you see the investment landscape shifting?

Let us know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Smart Metering Systems acquisition

Glasgow-headquartered tech company Smart Metering Systems (SMS) has agreed to be acquired by Bidco, a newly formed company owned by KKR-advised funds, in a deal valued at £1.3 billion ($1.6 billion).

KKR said that SMS, under private ownership, will be able to accelerate its growth and transition from a metering provider to a fully integrated, end-to-end energy infrastructure company.

Commenting on the acquisition, Tara Davies, partner and co-head of European Infrastructure at
KKR, said: “Achieving this growth opportunity requires significant capital of a scale, flexibility and certainty which is best facilitated in the private markets.

“KKR is a major investor in UK infrastructure and behind the energy transition, and we will bring our expertise and operational resources to bear in supporting SMS to invest at the level required and successfully scale its business over the long-term.”

Added Tim Mortlock, chief executive officer of SMS, said: “KKR’s offer recognises the strength and resilience of our model and will ensure SMS has the necessary capital to accelerate and unlock its full growth potential.

“The offer price represents a significant premium to the current share price and allows shareholders to realise immediate and attractive value for their shareholding.”

Listed on the AIM market, SMS has a significant presence across eight locations and employs approximately 1,500 people, primarily in the UK.

According to Reuters reportage, if the deal gets shareholders’ approval, SMS will join the growing list of companies leaving London this year, fuelling fears that the capital is rapidly losing its appeal as sluggish trading and low valuations drive firms away from its stock market.

With the acquisition, shares in SMS surged more than 42% to an over two-year high of 969 pence ($12.24) in early trading.

Have you read:
QIC and Intellihub strengthen market position with smart metering acquisitions
Gridspertise and Cuculus partner to deliver metering services in Germany

Smart grid startup seeding

Energiot, a Spanish start-up developing self-powered Internet of Things (IoT) devices for smart grid management, has successfully concluded a seed funding round.

The funding, led by a syndicate of climate technology-focused investors with EIT InnoEnergy together with Axon Partners Group and COREangels Climate underscores a shared commitment to innovation and the transition toward sustainable energy.

Gonzalo Murillo, president and founder of the Spanish startup, commented in a release that the financing round will be used to develop new key pilots with grid operators, scale up their product manufacturing and commercialisation and enable “a gradual growth of our team in order to complement their competencies.”

Energiot’s mission is to digitalise and modernise the electricity grid as renewable energy production increases, coupled with increased electrification and the rise of electric vehicles, which has resulted in grid congestion costing billions annually.

To address these challenges, Energiot aims to optimise grid operation and maintenance through the deployment of IoT devices that are equipped with multiple sensors and contribute to real-time monitoring and predictive maintenance, enhancing the overall efficiency and sustainability of grid assets.

Energiot is a spin-off of the Institute of Microelectronics of Barcelona and has been supported by EIT InnoEnergy since its inception.

The company won the Cleantech Camp programme in 2017 and collaborates with European grid operators to conduct pilots, including with Iberdrola (Spain), EDP (Portugal), and Enercal (France/New Caledonia).

The raised amount from the funding round has not been disclosed.

More from Smart Energy Finances:
SparkMeter funding, Elia in the US and AI assisting investments
Purchasing electricity indexed to stock exchange prices

Siemens acquires BuntPlanet

Tech giant Siemens has acquired BuntPlanet, a Spanish tech company with software consisting of smart metering solutions, water quality, asset management and integration of hydraulic models and AI for detecting leaks and other anomalies in water networks.

Siemens has had a licensing agreement with BuntPlanet since 2019 to sell their leakage detection software known as SIWA LeakPlus. With this acquisition, BuntPlanet’s entire offering and team will be integrated with Siemens’ application portfolio for water utilities.

BuntPlanet’s core offering, BuntBrain, is a software platform with solutions for leak detection, water quality improvement, end-use water analysis, water loss reduction, asset management, digital twin and water meter management.

The application includes advances in AI, big data and hydraulic simulation to pre-locate leaks and other anomalies, minimising risk of damage to infrastructure and reducing operational and maintenance costs.

According to Siemens, the software’s already-proven integration with Siemens Measurement Intelligence hardware portfolio has demonstrated detection of leaks as small as 0.25 liter per second.

With the acquisition, BuntPlanet is a 100% subsidiary of Siemens Spain and is assigned organisationally to Siemens Digital Industries and part of the Process Automation Business Unit.

Once the integration has fully concluded, Siemens will make BuntPlanet’s offering also available on its open business platform, Siemens Xcelerator.

A purchase price for the acquisition has not been announced.

For the latest in finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Honeywell invests in Sparkmeter

SparkMeter, a provider of grid management services, equipment and software solutions across Africa, Asia and the Americas, has secured a strategic $5 million investment and global partnership with Honeywell Smart Energy, a utility digital solution provider.

Honeywell will provide its base of US utility customers with SparkMeter’s integrated cloud-based metering and operational analytics software and offer SparkMeter’s metering hardware to large emerging market countries.

Founded in 2013, SparkMeter provides grid management solutions tailored to emerging markets, where 2.1 billion people live without reliable electricity access.

The company touts a simple plug-and-play solution that enables microgrids and distribution utilities operating in remote locations to access a range of features, including flexible billing, customer communications and remote monitoring and control.

According to SparkMeter, the partnership comes as utilities globally look towards more advanced use cases of smart metering, beyond simple automated meter reading and billing integration.

According to SparkMeter, their modern industrial IoT tech platform provides a first-of-its-kind end-to-end metering and operational analytics solution, compatible with any Advanced Metering Infrastructure (AMI).

This allows utilities to circumvent electricity and revenue loss due to load management or payment challenges, and begin to plan for new grid dynamics such as DERs and EV chargers.

Also from Smart Energy Finances:
Funding for Capalo AI’s market optimisation platform
Purchasing electricity indexed to stock exchange prices

Elia Group enters US market

Elia Group has entered a firm agreement to acquire a 35.1% stake in energyRe Giga Projects.

The Belgium-based energy group will deploy $400 million over three years into energyRe Giga-Projects, with proceeds fully committed to fund project development in US electricity transmission and renewable energy generation.

A subsidiary of energyRe LLC, energyRe Giga is an independent US developer of clean energy solutions, including both utility-scale transmission and generation.

Founded in 2020 and dual-headquartered in Houston, Texas and New York, New York, energyRe’s focus on transmission-led generation combines HVDC transmission with emissions-free energy sources to decarbonise US cities and deliver clean power directly to the energy load centres.

With the acquisition, Elia Group enters the US markets alongside energyRe, an established partner with a strong pipeline of projects.

Elia Group, through its WindGrid subsidiary, will serve as the designated holding entity for the stake. This aligns with Elia Group’s growth strategy in Europe and in the US, which centres on expanding its overseas activities and reinforcing Elia Group’s development of sustainable energy solutions.

energyRe Giga brings local expertise with a highly experienced team, established track record in the development of projects in the US, solid pipeline of near-term projects and a strong network of partnerships.

Elia Group will contribute its strong offshore transmission capabilities across development, construction and operations and maintenance, close relationship with EU suppliers, strong HVDC expertise and experience in transmission planning and solving for congestion issues.

The acquisition will be accretive to Elia Group with returns above European regulated utilities targets enabled via a selective approach to project development, prioritising profitable and value-accretive projects focused on semiregulated markets.

The capital-light business model of energyRe Giga is also expected to have a minimal impact on Elia Group’s balance sheet.

energyRe Giga’s assets are sold upon completion of each project, with the opportunity to reinvest capital to foster further portfolio expansion.

The transaction is expected to close in the first quarter of 2024.

Have you read:
AI platform to bridge utility sector labour shortage in Netherlands
Blackstone acquires Texas-based electric grid components company

How can AI help with energy investments?

A major trend in 2023 has been investments and acquisitions into AI-powered platforms that assist with grid forecasting and energy trading decisions.

This is not necessarily a surprise – the year has solidly demonstrated that artificial intelligence will continue to make its mark across industries, especially energy.

To gain more insights into how AI can assist with investments, I reached out to Brian Sathianathan, Co-Founder of Iterate.ai, who stated that “project developers in the energy sector can harness AI for competitive advantage and more targeted investor pitches.

“AI allows for the gathering and analysis of large datasets to identify market trends and tailor pitches. It also helps create personalized pitches based on investor interests, enhancing chances of securing funding.”

Sathianathan adds how, through the use of AI, investors are able to identify “potential investment opportunities and risk assessment, presenting robust propositions to potential investors.

“AI also streamlines smart contract management and stakeholder engagement by automating tasks and analysing public opinion respectively.

“AI has revolutionized the way we approach investment decisions, especially in the realm of clean tech projects.

“By leveraging predictive analytics, portfolio optimisation, fraud detection, NLP (Natural Language Processing), and automated trading, investors can make more informed decisions that balance financial returns with environmental and social responsibilities.”

No matter your thoughts on the place of AI within the workforce and energy landscape, its presence will surely continue to grow. And it is a presence worth watching.

For the latest news and insights into the finance and investment scene of the energy sector, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar are EDF’s strategic acquisition of a heat pump specialist in the UK, following a prior investment in 2022 in the same company, as well as two green bonds from German energy company EnBW valuing €1.5 billion for e-mobility, grid development and renewable projects.

Tauron’s product service platform

Polish DSO Tauron is launching a product service platform, allowing entrepreneurs using exchange products to quickly decide when to purchase electricity by tracking its current market value.

According to the company in a release, over 5,000GWh of electricity for business will be served by the digital platform, which will be launched by Tauron in the coming year.

The platform will allow business customers to purchase electricity indexed to stock exchange prices and service contracts for the purchase of energy from renewable sources and other business products.

In the initial phase, the Tauron Product Service Platform is intended to support exchange products, such as the Exchange Valuation of Energy, the Exchange Valuation of Gas and the Exchange Valuation of Property Rights.

The platform enables business customers to submit purchase applications in various modes provided by Tauron. It will also improve the acquisition of information about the contract status and facilitate communication and customer access to currently applicable documents.

Explained Tomasz Lender, vice-president of the management board of TAURON Głos: “The new service platform is an advanced IT system prepared with business customers in mind.

“It allows you to easily and intuitively operate products in which the price is calculated based on stock exchange quotations. Thanks to this tool, each customer can easily submit applications for the purchase of electricity, gas fuel or property rights 24 hours a day, 7 days a week.”

Have you read:
Grid investment key as renewables dominate future energy economy says IEA
Swissgrid invests in grid infrastructure modernisation

According to the utility company, entrepreneurs using exchange products can quickly decide when to purchase electricity by tracking its current market value with the platform.

Thanks to this, in the event of a price drop on the wholesale market, the company can purchase electricity at lower prices.

This type of electricity contracting is particularly attractive for companies that want to decide when to purchase electricity or gas and have full control over their cost in order to be able to plan it precisely and include it in a future budget.

In coming months, the platform will also enable the service of ecological products, such as EKO Premium, which guarantees that the customer will obtain 100% energy produced from renewable energy sources, including hydroelectric power plants, wind farms or photovoltaic installations.

EDF acquires CB Heating

EDF, Britain’s biggest generator of zero carbon electricity, has strategically acquired one of the UK’s leading air source heat pump installers, CB Heating.

The acquisition follows a strategic investment made by EDF into CB Heating in 2022.

Also, recently the UK government extended the Boiler Upgrade Scheme – which provides upfront capital grants to support installation of heat pumps and biomass boilers in England and Wales – from 2025 to 2028, and boosted the air source heat pump grant by 50%, rising from £5,000 ($6266) to £7,500 ($9398).

EDF expects the investment to improve the end-to-end customer journey from selection to installation, halving the customer journey time, which currently takes three to four months.

The deal will also see EDF putting a dedicated team in place to deliver heat pump solutions for a wide range of homes across the country, forming part of a wider range of zero carbon home products for both local authorities and developers looking to ensure compliance with the new legislation.

More from Smart Energy Finances:
E.ON anticipates Q4 profit hit after nine-month growth
Norwegian investors buy 49% stake in Indian transmission scheme

Over the past year, EDF’s strategic investment and partnership with CB Heating has supported the development of the Heat Pump Installers Network (HPIN) Academy, which delivers free training to upskill engineers at every level in the UK.

Since August 2022, the partnership has generated a 414% surge in the number of heat pump installers being trained, rising from 90 to 463 installers.

Clayton Browne, managing director at CB Heating, said: “Now CB Heating has the investment and resource to continue its journey to develop and grow our HPIN network, which is the largest network of qualified trained heat pump installers in the UK.

“We plan to train over 1000 heat pump installers in 2024, meaning a quarter of all estimated heat pump installers in the UK will be a HPIN member.

“It’s a very exciting time for CB Heating as we take this next step in our 23-year history.”

EnBW successfully issues two green bonds

German electric services company EnBW has issued, via subsidiary EnBW International Finance B.V., two corporate green bonds with a combined issue size of €1.5 billion ($1.6 billion).

The proceeds will be used exclusively to finance or refinance clean tech projects, including fast-charging stations for electric vehicles, expansion and upgrading of grid infrastructure, solar farms in Germany and France and onshore and offshore wind farms.

Said EnBW CFO Thomas Kusterer in a release: “Today’s green bond issues provide advance funding for investments in the coming 2024 financial year. We are proactively managing our financial resources in order to continue on our sustainable growth trajectory.

“In the years ahead, we will commit an average of €4.5 billion ($4.8 billion) in gross investment per year on EnBW’s path to climate neutrality.”

As the largest energy company in Germany, EnBW states their priorities as the expansion of renewables in combination with the upgrading of electricity grids, developing electric mobility and establishing the future generation and supply infrastructure based on hydrogen and green gases.

“Over 80% of our investments are channelled into implementing energy transition projects in Germany. This is an important contribution to Germany’s future as a business location,” added Kusterer.

Including today’s issue, EnBW has already issued green bonds totalling €5 billion ($5.5 billion) since 2018.

The issuance was supported by a banking syndicate consisting of HSBC, ING and UniCredit and additionally BBVA, DZ BANK, Helaba and Morgan Stanley.

The issue date will be 23 November 2023. The bonds have coupons of 3.850% and 4.300% and maturities of 6.5 years and 10.5 years respectively.

Don’t miss out on the most important energy transition conversations.

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For the latest in finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances.

I will also be attending Enlit Europe in Paris next week from 28 to 30 November. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are the closing of Gridmatics’ storage fund, Siemens’ financial safety net and the sale of a 410MW battery storage pipeline.

Norwegian investment in Indian transmission

The Norwegian Climate Investment Fund, managed by government-owned Norfund and KLP, Norway’s largest pension company, is investing approximately $9 million for a 49% stake in the Koppal Transmission Scheme.

The project is being led by Indian decarbonisation solutions company ReNew, marking their first interstate transmission project to help transmit renewable energy in the Koppal Area of Karnataka, India.

The Indian scheme was awarded in fiscal year 2022 and covers the construction of a new 400/220kV substation at Koppal along with 144km of 400kV direct current transmission line with extension of the 40kV GIS Bays at the PGCIL (Power Grid Corporation of India Ltd) Narendra substation.

ReNew said the investment aligns with their ‘farm-down strategy’, whereby developers sell stakes in renewable assets to institutional investors looking for long-term and stable yields, to add further renewable capacity to the grid.

In addition, synergies in project execution and operations with ReNew’s in-house capabilities are hoped to enhance returns and derisk completion timelines for ReNew’s core renewable energy development business.

Have you read:
US energy department announces $1.3bn transmission buildout
Transmission line issues volatilise Australia’s power market

Through the partnership, every rupee invested by Norfund will equate to 15 rupees mobilised from private capital, said Norfund in a release.

Commented Anne Beathe Tvinnereim, Norway’s minister of international development: “To secure the necessary investments for the vital energy transition, public funding must mobilise private capital. The signing between the Climate Investment Fund, ReNew and KLP is a great example of this.

“It also shows how Norwegian investments are helping India reach its goals of installing 500GW of non-fossil capacity by 2030.”

ReNew has won three transmission projects in Karnataka to date. Central Transmission Utility (CTU), a state-owned entity and a wholly-owned subsidiary of PGCIL, will be responsible for billing, collection and disbursement of revenues for the projects.

Following the commissioning of the 1,500MW Koppal Scheme, the remaining transmission for 3,500MW (ReNew has commited to build transmission for approximately 5GW in renewable energy) is expected to be completed by June 2024.

Funding update: Gridmatic’s second closing

Gridmatic, an AI-enabled power marketer, has announced the second closing of its first energy storage fund, bringing capital commitments to $50 million.

The storage fund opened earlier this year in August, aiming to allow the Californian energy supplier to establish multi-year offtake contracts with asset owners to operate energy storage using its AI algorithms.

The fund is earmarked to oversee the management of up to 500MW of battery capacity in the ERCOT (Electric Reliability Council of Texas) and CAISO (California Independent System Operator) markets.

ERCOT and CAISO run the Texan and Californian grids respectively, remaining the two strongest US energy markets with pipelines of 32GW and 43.7GW in planned project capacity.

“Successfully closing our energy storage fund now allows us to accelerate our growth in signing offtake agreements with asset owners and developers,” said David Miller, vice president of business development for Gridmatic.

“This summer showed us the major potential for battery storage in California and Texas to contribute to grid resiliency efforts. Our fund will help maximize these opportunities for batteries to play a greater role in the grid and for the market to grow.”

Also from Smart Energy Finances:
E.ON anticipates Q4 profit hit after nine-month growth
Growth financing for AI-based network resilience

ICYMI: Siemens Energy’s safety net and Indian decoupling

Germany’s Federal government is stepping in to offer a ‘safety net’ to Siemens Energy as the company reported a net loss of €4.5 billion ($5 billion) for the 2023 fiscal year and an order backlog of €112 billion ($121.6 billion).

Siemens Energy will receive a €12 billion ($13 billion) guarantee line from a banking consortium, with Berlin’s €7.5 billion ($8 billion) counter guarantee provided to the banks in order to ensure the guarantee line is successful.

Officially announced during the company’s Q4 media briefing, the financing was agreed upon to re-insure the tech company.

“The demand for our technologies and products is huge,” said Siemens Energy chief executive Christian Bruch. “It is industry practice to offer guarantees to ensure potential customer requirements are met.

“It is not a loan.” He added: “It is important to be able to cover our huge incoming orders, in particular the wind area.”

Announced at the same time as the safety net, and as part of measures to support the stability of Siemens Energy, Siemens – which still holds a 25% stake in Siemens Energy – also announced its intentions to acquire an 18% stake in Siemens Ltd India from Siemens Energy for a cash price of €2.1 billion ($2.3 billion).

The purchase will be done via a share purchase agreement with Siemens Energy, increasing Siemens’ stake in the publicly listed company from 51% to 69%, with Siemens Energy’s stake decreasing from 24% to 6%.

Read the full story covered on Power Engineering International

Emeren sells 410MW battery storage portfolio

Emeren Group Ltd, a solar project developer, has sold a portfolio of five Battery Energy Storage Systems (BESS) in Italy to Matrix Renewables, an energy platform created and backed by alternative asset manager TPG and its $16 billion impact-investing platform TPG Rise.

Emeren called the transaction a significant milestone within the framework of a Development Service Agreement (DSA) the two executed in June, which outlines the development of a 1.5GW BESS portfolio.

The five projects feature standalone storage systems, with a cumulative capacity of 3,787MWh.

The entire portfolio is strategically located in the Italian southern region of Apulia, significantly enhancing the regional energy infrastructure. Ready-to-build status is expected to be achieved by late 2024.

Chris Matthews, managing director for Europe at Matrix Renewables, commented in a release, “Our partnership with Emeren underscores our commitment to driving renewable energy expansion and sustainability in the vibrant Italian market.

“The acquisition of the 410MW BESS portfolio significantly advances our mission to reshape the energy landscape and fortify the resilience of the power grid.”

Emeren has a pipeline of projects and IPP (independent power producer) assets totalling over 3GW, as well as a storage pipeline of over 6GWh across Europe, North America and Asia. The company focuses on solar power project development, construction management and project financing services.

Matrix Renewables’ current portfolio is comprised of 11.7GW in renewable energy and storage projects in Europe, North America and Latin America.

For the latest finance and investment news coming out of the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Enlit Europe in Paris from November 28 to 30. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Meanwhile, US-based substation equipment manufacturer Systems Control has been sold by Comvest Partners to Hubbell Incorporated, UK flexibility provider Statera Energy has been acquired by a Swedish equity infrastructure fund and $550 million debt and tax equity financing has been announced for US battery projects.

E.ON forecasts Q4 profit hit

Electric utility E.ON has announced its expectations of a “significant hit” to Q4 profits for their customer solutions business, a result of implementing previously-induced price reductions for their millions of electricity and gas customers, according to E.ON’s chief finance officer Marc Spieker in their Q3 financial results.

Said Spieker: “We expect the pass-through of lower wholesale prices and other effects to have a significant negative impact on our earnings in the customer solutions business in the fourth quarter.”

According to the utility company, their full-year earnings guidance reflect a potential deterioration in the energy market environment in the fourth quarter.

The main reasons for this are increased market volatility due to uncertainties on the global supply and demand side as well as tense geopolitics.

The Q4 hit is anticipated despite significant growth across E.ON businesses from the first three quarters of the year.

In the customer solutions business, adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) rose by around €1.6 billion ($1.7 billion) to €3 billion ($3.2 billion).

According to the company, stabilisation of price levels on the wholesale markets contributed to the positive earnings performance compared with the prior-year period, which was heavily burdened by very high energy prices.

Have you read:
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CEO of E.ON takes the reigns as Eurelectric president

In their energy networks business, adjusted EBITDA increased by almost €800 million ($853.5 million) to €4.9 billion ($5.2 billion).

In Germany in particular, the “recovery in the energy market environment led to significant temporary relief, which will be passed on to customers through network charges in the coming years” stated the company.

Additionally, E.ON continued to expand its investments in both energy networks and sustainable customer solutions, significantly increasing them compared with the same period last year.

In the first nine months, investments amounted to more than €3.9 billion ($4.2 billion), representing a rise of 40%.

‘Mission critical’ substation solution manufacturer switches hands

Comvest Partners, a middle-market private investment firm, will sell Systems Control to Hubbell Incorporated, a manufacturer of utility and electrical solutions, for $1.1 billion in cash.

Systems Control has been a portfolio company in Comvest’s private equity strategy since 2018. The transaction is expected to close by the end of the year.

Founded in 1962 and headquartered in Iron Mountain, Michigan, Systems Control is a leading manufacturer of substation control and relay panels as well as turnkey substation control building solutions for the electric transmission and distribution industry.

According to Comvest in a release, the company’s offerings are “mission-critical to grid reliability, enabling utility customers to protect and control substation infrastructure while detecting faults and controlling the flow of electricity.”

Also from Smart Energy Finances:
Global equity funds acquire Energy Exemplar
Hitachi Energy acquires eks Energy

“This successful outcome highlights Comvest’s expertise in helping companies achieve their growth objectives as well as our investment leadership in the infrastructure services space. We are excited for (Systems Control’s) future as part of Hubbell,” stated Maneesh Chawla, a managing partner at Comvest, in a release.

Harris Williams LLC and Lincoln International LLC are serving as financial advisors to Systems Control, and McDermott Will & Emery LLP is serving as legal advisor.

Morgan Stanley & Co. LLC is serving as financial advisor to Hubbell, and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.

Sweden’s EQT to acquire UK flexibility provider Statera Energy

EQT Infrastructure VI fund, owned by private equity company EQT Partners, has agreed to acquire Statera Energy Limited from InfraRed Capital Partners.

Established in 2015 and headquartered in London, Statera is a prominent player in the UK’s battery storage and flexible energy sector, providing generation capacity from tech such as pumped hydro and green hydrogen to assist with balancing the power grid.

With the acquisition, EQT Infrastructure will support the Statera management team and platform by providing access to growth capital to accelerate the deployment of flexible generation across the UK.

The transaction is subject to customary conditions and approvals. It is expected to close around the end of the year.

DC Advisory served as financial advisor and Simpson Thacher & Bartlett LLP as legal advisor to EQT Infrastructure.

With this transaction, EQT Infrastructure VI is expected to be 20 – 25% invested, based on the target fund size.

Statera has 1GW of flexible generation in operation and under construction, enough to power around 750,000 homes, and a total project pipeline of over 16GW, with plans to deliver 7.5GW of flexibility assets by 2030.

$550 million debt and tax equity financing for US battery projects

Aypa Power, a Blackstone portfolio company and an independent power producer (IPP), has closed a $550 million portfolio debt and tax equity financing with First Citizens Bank & Trust Company, Nomura Securities International, Inc., National Bank of Canada and MUFG Bank, LTD. serving as lenders.

The loan supports both Aypa’s Cald project, a 100MW/400MWh standalone battery storage project in urban Los Angeles, California, which secured a long-term tolling agreement with San Diego Gas & Electric, and the Borden County project, a 150MW/300MWh battery storage project in Texas.

Both projects are under construction and set to commence commercial operations in 2024, bolstering grid reliability and stability within their respective regions.

Louise Pesce, managing director of project finance at MUFG, which is also serving as Administrative Agent on the transaction, commented on the financing in a release, stating how both battery projects “will be essential components in enhancing the reliability and effectiveness of renewable energy systems in California and Texas.”

US Bancorp Impact Finance served as the portfolio’s tax equity investor.

For the latest in finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Enlit Europe in Paris from November 28 to 30. Will I see you there?

Don’t miss out on the most important energy transition conversations.

Join Enlit Europe in Paris.

Register now

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar is the launch of AI software company Rhizome, a climate resilience planning platform for the power grid.

Blackstone and Vista acquire Energy Exemplar

Australia’s Energy Exemplar has been acquired by Blackstone- and Vista Equity Partners-affiliated private equity funds.

The company, known for its energy market simulation software, is calling the acquisition a move to scale up and improve its platform in support of grid reliability and the energy transition.

Energy Exemplar provides a platform for utilities, power producers, grid system operators, and others in the energy transition ecosystem to forecast market operations. According to the company, this can inform long-term investments and optimise ongoing operations of assets and systems.

According to Reuters reportage, the deal is valued at more than $1 billion, although the companies have not provided financial details.

The two buyout firms will each hold a 50% stake, with Energy Exemplar’s existing owner Riverside Company cashing out.

“We are tremendously excited about this partnership and how it will accelerate our investment in our leading SaaS platform providing accurate simulation and decision support for our customers in today’s rapidly changing energy landscape,” said David Wilson, CEO of Energy Exemplar.

“The combination of Blackstone and Vista brings a unique level of expertise in both the energy and software industries…”

Have you read:
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Software platform deployed to help drones with powerline inspections

Blackstone Energy Transition Partners is New York-based Blackstone’s energy-focused private equity business, an energy investor with investments of over $21 billion in equity globally across a range of sectors within the energy industry.

Vista, on the other hand, is a global investment firm with more than $101 billion in assets under management as of 30 June 2023. The firm exclusively invests in enterprise software, data and technology-enabled organisations across private equity, permanent capital, credit and public equity strategies.

Said Ryan Atlas, managing director at Vista Equity Partners: “[Energy Exemplar’s] platform provides a holistic view of the impact traditional and emerging energy systems have on the businesses of those leading the energy transition.”

Added Bilal Khan, senior managing director at Blackstone Energy Transition Partners: “We’re thrilled to be backing Energy Exemplar, a mission-critical software provider supporting the growth of renewable energy, battery storage and transmission grid investment required for the energy transition.

“Blackstone’s energy market expertise and network of connections can enhance the company’s growth trajectory. We couldn’t be more excited to work with Vista, David, and the management team to drive the next stage of development for Energy Exemplar and its technology solutions supporting grid reliability and decarbonisation.”

Kirkland & Ellis LLP served as legal counsel, and William Blair served as financial advisor to Blackstone and Vista. Lazard acted as sole financial advisor, and Jones Day and Herbert Smith Freehills served as legal counsel to Energy Exemplar.

Clock ticking for GE Vernova’s spin-off

Boston-based conglomerate GE has set Q2 2024 as the date for its energy company’s spin-off, after which it will have its own ticker on the New York Stock Exchange.

The move was initially announced in a 2021 announcement of the company splitting into three public companies focused on energy, aviation and healthcare.

GE’s latest update now sets a time frame for the split, completion of which will see shares of GE Vernova listed on the New York Stock Exchange under the ticker symbol ‘GEV’.

GE Vernova CEO Scott Strazik said in a release: “Today’s milestone demonstrates the progress our team is making toward spinning off GE Vernova as an independent company driving both electrification and decarbonisation.

“We’re focused on delivering for our stakeholders while positioning our company for long-term success, and we are excited to launch GE Vernova on the New York Stock Exchange.”

More from Smart Energy Finances:
Hitachi Energy acquires eks Energy
€108m for supercapacitors and the SuperBattery

Commenting on the release of GE’s third quarter results was GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr.: “GE delivered another quarter of very strong results with double-digit growth in revenue, profit, and cash (…) At GE Vernova, our grid and now onshore wind businesses were both profitable this quarter and we expect their performance to continue to improve.

“With our two largest renewable energy businesses delivering and power’s continued strength, we remain highly confident in GE Vernova’s spin-off next year.”

Following the spin-off, in which GE will distribute common stock of GE Vernova to holders of GE common stock, General Electric Company will be known as GE Aerospace.

Added Culp, Jr.: “It’s been nearly two years since we announced our plan to create three independent, investment-grade, industry leaders. We’re now closing in on our final step—spinning off GE Vernova and launching GE Aerospace, following the successful spin-off of GE HealthCare earlier this year.

ICYMI: AI software company raises $2.5m for grid resiliency

Rhizome, a climate resilience planning platform for the power grid, announced its official launch, initial institutional capital raise of $2.5 million, and partnership with Seattle City Light and Vermont Electric Power Company (VELCO).

With ongoing engagements with several major electric utilities, Rhizome says it intends to make the electric grid more resilient by forecasting climate impacts on utility infrastructure and optimising grid investments.

Rhizome’s software platform was made to calculate the economic and social impacts of potential future power grid failures caused by climate change-fueled disasters such as storms, extreme temperatures, floods and wildfires.

Rhizome pairs resilience research from national labs with infrastructure data and proprietary machine learning to place a “value of resilience” on every proposed grid investment.

This is meant to inform utilities and regulators on the optimal investment plans that mitigate the most risk per dollar. Replacing and hardening aging assets, vegetation management, distribution automation devices, and distributed energy resources are all examples of interventions that Rhizome’s platform is able to assess.

Read the full story by Sean Wolfe

For the latest in finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Enlit Europe in Paris this year from November 28 to 30. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

The move is hoped to enable them to tap into the global energy storage market, coming in as Dutch company Skoon announces a successful Series A raise for their offering, an AI-powered platform that is hoped to help ‘reshape’ on-site energy supply.

Hitachi Energy acquires eks Energy

Tech major Hitachi Energy has announced a strategic acquisition of eks Energy, adding its advanced power electronics and energy management software capabilities to Hitachi’s growing portfolio.

Hitachi Energy called the move part of its strategy to meet global demand for battery energy storage solutions.

eks Energy, based in Seville, Spain, was acquired by the Switzerland-based company from Powin LLC, a top global energy storage system provider.

The investment also marks the establishment of a strategic partnership with Powin, which maintains a significant ownership stake in eks Energy.

As the world transitions to more renewable energy sources, the global demand for battery energy storage systems (BESS) continues to surge and is expected to grow more than 20% per year through 2030, states Hitachi Energy, citing Bloomberg New Energy Finance’s (BNEF’s) 2023 Energy Storage Outlook.

By combining eks Energy’s power electronics and advanced control capabilities with Hitachi Energy’s automation, software and system integration offerings, the company is looking to fortify its position as a leading-edge technology provider to the renewables and BESS market.

More from Smart Energy Finances Weekly:
€108m for supercapacitors and the SuperBattery
Series B funding for AI-powered grid analytics

Through the strategic partnership, Hitachi Energy and Powin aim to apply the strength of the two firms to develop power conversion products specifically designed for the next generation of energy storage systems.

Commenting in a release was Massimo Danieli, managing director for the Hitachi Energy Grid Automation Business Unit: “New applications and use cases (for the BESS market) are emerging every day, driven by the ever-increasing need for integration of renewable resources in the grid and electrification at the grid edge.

“eks Energy has an impressive product deployment footprint in North America and Europe, and under Powin has further extended their global reach. With this significant addition to our portfolio, Hitachi Energy is ready to address the demands of the fast-growing global BESS market with speed and scale.”

Added Jeff Waters, CEO of Powin: “We are proud of what we have already developed with eks Energy, including one of the world’s largest battery projects in history, the Waratah Super Battery (WSB) where eks Energy’s unrivalled power conversion systems are able to meet the Australian grid operators’ high standards of performance.”

Nomura Greentech acted as exclusive financial advisor and Shearman & Sterling acted as legal advisor to Hitachi Energy.

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€5 million for mobile grid systems

Skoon Energy, an AI-powered software platform for clean mobile energy, has closed €5 million ($5.3 million) in Series A funding, led by American VC Blue Bear Capital, with participation from Graduate Entrepreneur Fund.

Founded in 2017, Skoon Energy aims to reshape on-site energy supply by connecting users of traditional fossil fuel powered generators with suppliers of clean mobile energy systems, such as batteries, hydrogen and solar generators.

The company’s AI-powered software platform enables customers to select the best energy system for their specific needs, monitor their energy usage and report on carbon savings.

According to the company, data-driven access to global energy systems enables grid operators, through the platform, to enable flexibility in the electricity grid.

“Instead of relying on legacy infrastructure, which can be outdated, grid operators can deploy a mobile grid – mobile energy systems – to support or replace their electricity grid at scale,” stated the company in a release.

“This flexibility in time and location placement allows grid operators and their customers to save costs and efficiencies to unlock the benefits of freedom in planning.”

Currently, Skoon’s platform is being used by rental companies across Europe including Atlas Copco, Volta Energy and Morillo Energy, as well as large scale energy users such as Vattenfall, the Dutch Ministry of Defence and the Port of Amsterdam.

“Our years of experience replacing fossil fuel generators at project sites (…) means Skoon is ready to tackle grid congestion challenges at a large scale,” said Peter Paul van Voorst tot Voorst, Skoon Energy’s founder and CEO.

“The funding from Blue Bear Capital and Graduate Entrepreneur Fund not only validates our platform’s value, but also serves as a critical launchpad to realize our vision to replace the use of fossil fuels at on-site projects and to provide clean power and true flexibility to electricity grids, globally.”

“Skoon unlocks access to low-carbon power generation to decarbonise the $10 billion global power rental market,” added Dr. Carolin Funk, partner at Blue Bear Capital. “Their platform provides an integral service that connects hard-to-electrify use-cases with innovative suppliers, reducing reliance on fossil fuels and improving overall grid stability.”

The Series A round follows investments by Kees Koolen, early investor and CEO of Booking.com and former COO of Uber; Damen Shipyards, the Netherlands’ oldest family-run maritime services company; and Rabobank.

For the latest in finance and investment announcements coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Laties
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar are a $15 million Series A funding round in the US for autonomous inspection tech of power lines and utility assets, as well as an ‘innovative’ financing package for the Lakeside battery system in the UK, with backers such as Tesla leading the way.

SuperBattery & supercapacitor financing

Skeleton Technologies, which develops fast-charging energy storage for transportation, grid, automotive and industrial applications, has announced the closing of a €108 million ($114 million) funding round to develop next-generation tech, including new high-power battery technology.

The round brought in investors such as Siemens Financial Services (SFS), existing investor Marubeni Corporation, Brazilian mining giant CBMM – which made its inaugural investment in the company – and others.

Specifically, the financing will be used for the manufacturing expansion of supercapacitors and the company’s new battery tech, the SuperBattery.

Skeleton’s supercapacitors and SuperBattery are used in transport, grid, industrial, and automotive applications – particularly in the fields of heavy-duty electrification, electrified and hybrid vehicles, and grid energy storage.

Conglomerate Marubeni, which includes Warren Buffet’s Berkshire Hathaway as a significant shareholder, distributes Skeleton’s products in Asia and aids in acquiring customers for Skeleton’s SuperBattery in the region.

Commented Skeleton Technologies’ CEO and Co-Founder Taavi Madiberk on the SuperBattery funding round: “Securing an investment from one of Europe’s largest tech companies is a significant milestone for Skeleton. In addition to SFS’ investment, Siemens is also a key partner, supplier and customer.

“Their expertise in industrialisation and commercial partnerships will propel our growth and solidify our role in leading the energy transition.”

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The companies have also partnered to automate and digitise Skeleton’s upcoming factory in Markranstädt, Germany, which will coordinate supercapacitor production. Siemens’ Manufacturing Operations Management System will be used to do so.

Skeleton Technologies also develops and produces a patented raw material called “Curved Graphene”, which the company states significantly improves battery performance while avoiding reliance on toxic metals.

Skeleton is also currently ramping up manufacturing of its supercapacitors’ product line with a new factory in Markranstädt in collaboration with Siemens, and developing its novel SuperBattery technology, slated for future mass production.

The new factory is scheduled to be completed at the end of 2024 and produce up to twelve million cells annually.

With the concluded financing round, Skeleton’s total funding exceeds €300 million ($316.7 million), ranking it among Europe’s top-financed deep tech firms.

Ellex Raidla acted as legal advisor and UBS as financial advisor to Skeleton.

$15 million for autonomous inspections

US-based software solutions developer Thread has raised $15 million in Series A funding to enhance its autonomous inspection capabilities.

The company, which develops an enterprise-scale autonomous data collection solution, is calling the successful funding round a move in “modernising the utilities industry via real-time asset performance management”, they state in a press release.

The round of funding is hoped to accelerate the company’s expansion across asset types and development of its UNITI platform, an Asset Performance Management (APM) platform for the energy and utilities industry.

The company, launched in 2018 as ‘Airtonomy’, touts its offering of automating data capture of utility assets via robotic inspection. This includes the realms of power lines (both transmission and distribution) as well as wind, oil and gas.

With its technology, Thread embeds unmanned aerial systems and robotics with a suite of applications to automate enterprise inspection and create an inspection-based digital asset catalogue.

Past clients include Xcel Energy and asset protection company MISTRAS Group.

Commented Josh Riedy, the company’s founder and CEO: “The ageing of the world’s critical infrastructure, disconnected workflow integrations between traditional software and shiny object vendors, and a depleting skilled workforce in Operations & Maintenance (O&M) continue to be major issues in data collection, which makes it increasingly difficult for stakeholders to make data-driven decisions.

“This Series A funding allows us to better service our customer’s needs by bridging the gap between legacy one-off inspections and real-time asset performance data, bringing the industry into the digital age.”

The funding round was led by Badlands Capital with notable participation from an early utility partner of Thread’s, Minnkota Power Cooperative, Generational Partners, Rosecliff Ventures, Excell Partners, Homegrown Capital and Kevin O’Leary’s Wonder Fund North Dakota.

Also from Smart Energy Finances:
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Series B funding for AI-powered grid analytics

TagEnergy secures landmark debt package for Lakeside BESS

UK-based TagEnergy has secured a landmark debt package to finance its next UK-based battery energy storage system (BESS) project under what they are calling an innovative financing model.

The financing comes courtesy of a non-recourse debt package of up to £70 million ($85 million) from lenders Santander, Rabobank, and Triple Point on a fully merchant basis (except for Capacity Market revenues).

The package will finance the construction and operation of TagEnergy’s Lakeside project, a 100MW/200MWh facility in North Yorkshire, England, and includes an uncommitted accordion facility with a view to incorporating further assets into the funding structure.

With financial close, TagEnergy announced Tesla, Habitat Energy and RES as project partners.

Engineering Procurement and Construction (EPC) contractor Tesla will provide a system of Tesla Megapack 2XL lithium-ion batteries. Habitat Energy partners as route to market and battery optimiser, while independent renewable energy company RES has been engaged as asset manager.

Construction commenced on the Lakeside project in August 2023 with the energy park due to go live by mid-2024.

TagEnergy acquired its 100% stake in the facility – then its fifth investment in the UK – from RES in December 2021.

Commented Franck Woitiez, chief executive officer of TagEnergy: “Securing a single non-recourse debt package without a revenue floor is testament to the value our innovative approach to financing offers the market. We’re excited to now move to the next stage of the project to accelerate the energy transition.”

The debt was arranged by IDCM as financial advisor, with TLT serving as borrower legal advisor, Burges Salmon as lender legal advisor, Aurora Energy Research as energy analytics provider, Everoze as technical advisor, WTW as insurance advisor, Ester as hedge advisor and RSM as the model auditor.

SuperBatteries, supercapacitors and innovative financing models – if there’s anything that can be said about energy tech and its funding, its that there’s always something new to write about!

But what do you think? Is there anything you think should be on my radar? Let me know. And follow Smart Energy Finances for the latest in finance and investment news coming from the energy sector.

Cheers.
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are an acquisition in the Netherlands of storage developer Equans by E.ON-owned energy company Essent and confirmation from ACWA Power that over $14 billion in projects reached financial close in the last 12 months.

AI for market forecasts and virtual power plants

Finnish energy tech startup Capalo AI has raised €500,000 ($531,445.50) in pre-seed funding.

Using advanced AI, the Capalo platform attempts to optimise the use of flexible energy assets, such as energy storage systems and EV charging stations, allowing the commissioning of weather-dependent renewable energy sources to grow by coordinating with the flexibility of the energy grid to adjust to production and demand fluctuations.

Capalo AI will use the funding to further develop its virtual power plant (VPP) and multi-market optimisation AI, as well as scale up its team with mathematicians and cloud service professionals.

According to the startup, with the popularity and commissioning of renewable energy rising globally, the role of energy storage and flexible demand will be crucial, necessitating the balance of consumption and production of electricity to ensure grid stability.

For example, in windy weather, the prices of renewable energy are low, and therefore, its financial benefit remains low, i.e., wind power becomes a less lucrative investment option.

This has led to the construction of batteries next to the turbines, which enables the energy to be discharged into the grid more evenly.

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“There are around 1,400 wind power plants just in Finland, and substantially more on the horizon. To enable the commissioning of new renewable capacity, we need all the available flexibility on the grid,” stated the company’s CEO and co-founder, Henri Taskinen, in a press release.

“Furthermore, there is a lot of untapped potential flexibility in many sectors, for example, on the EV charging side. Our platform taps into these new revenue streams for unutilized assets and simultaneously accelerates the green transition.

“Our solution simultaneously maximizes the value for our customers and accelerates the green transition. In addition, with multi-market optimisation, national grids are able to sustain a steady electricity frequency,” Taskinen added.

“This means less of a need for reserve power plants that mostly use fossil fuels to produce electricity, which then leads to less carbon dioxide emissions.”

The funding round was led by Finnish investment company Innovestor Tech Fund, with Inventure also participating.

A Dutch storage acquisition

Dutch aquifer thermal energy storage (ATES) solutions provider Equans Energy Solutions has been acquired by energy company and E.ON subsidiary, Essent, also based in the Netherlands.

Equans Energy Solution is part of Equans Nederland, the storage provider that develops solutions for households and businesses in the Netherlands.

Resi Becker, Essent’s chief executive officer, commented on the acquisition in a press release, stating its alignment with Essent’s aims to double down on their position in the energy sector: “We are pleased to welcome the new colleagues to our ‘Energy Infrastructure Solutions’ business unit. We are convinced that by combining Essent and Equans Energy Solutions we can further accelerate the energy transition with our people and our customers.”

Added Bas Evers, managing director of Equans Energy Solutions: “We are looking forward to working together with Essent and E.ON building on each other’s strengths, to collectively grow our portfolio to offer more clients affordable and reliable sustainable heating and cooling.”

Closing, which is subject to the applicable employee consultation process in accordance with Dutch law, is expected by the end of 2023.

A subsidiary of E.ON since 2020, Essent has over 90 years of experience generating, trading, transmitting and supplying electricity. Essent has 2.3 million electricity customers and approximately 2 million gas customers.

Also from Smart Energy Finances:
Series B funding for AI-powered grid analytics
Growth financing for AI-based network resilience

ACWA closes $14bn in projects in just 12 months

Renewable energy and water project developer ACWA Power has announced the closure of projects worth over $14 billion over the last 12 months.

The projects span Saudi Arabia, Egypt and Uzbekistan, including renewables, water desalination and green hydrogen, alongside the $8.5 billion NEOM Green Hydrogen project, the world’s largest utility-scale green hydrogen production facility under construction in Saudi Arabia.

Remarking on the figures during the Saudi Arabia Investment Forum in New York was Abdulhameed Al Muhaidib, the company’s CFO, who commented: “The past 12 months marks a historic milestone for us, as it represents the highest number of projects we have ever successfully achieved financial closure for within 12 months.

“It not only validates our expertise as a developer and operator of strategically vital projects but also speaks highly about the trust our investors and partners place in us.”

In addition to the NEOM Green Hydrogen project, ACWA Power also achieved financial close of the Ar Rass solar PV and the Al Shuaibah 1 and Al Shuaibah 2 solar PV projects, which form a critical part of Saudi Arabia’s National Renewable Energy Program (NREP); three wind projects in Uzbekistan – Bash, Dzhankeldy and Nukus; the Kom Ombo solar project in Egypt; the Shuaibah 3 IWP, and most recently the Rabigh 4 IWP in Yanbu.

Financing for the projects was sourced from several local and international financial institutions and infrastructure development funds.

Over the coming months, ACWA Power has stated it will continue to pursue new opportunities and partnerships that align with its mission to scale up its project footprint both within Saudi Arabia and globally.

At present, ACWA Power has 75 assets in various stages of development and in operation, in geographies including the Middle East, Africa, Central Asia and Southeast Asia.

To close, I had the pleasure of attending the Bentley Year in Infrastructure and Going Digital Awards this week in Singapore, where the value of and business case behind artificial intelligence across infrastructure, especially energy, was clearly being recognised.

The award winners include infrastructure projects that have overcome challenges and achieved set objectives by leveraging the latest digital advancements. It was a privilege to attend this event and celebrate the winners’ achievements.

And make sure to follow Smart Energy Finances Weekly for the latest in finance and investment news coming from the energy sector.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are announcements of an integrated platform for interconnector-based energy trading between the UK and Netherlands as well as an insurance policy partnership for Li-Ion battery products.

Series B for AI-powered grid analytics

Amperon Holdings has secured $20 million in Series B funding led by Energize Capital, to unlock more value from grid data and advance electricity forecasting.

Spurred by growing complexities surrounding demand and supply of energy – demand is seeing more flexible load and rapid electrification; supply is experiencing increasing penetration of variable resources – the funds will support the company’s shift from an electricity demand forecasting platform into a comprehensive data analytics solution.

According to the US-based company, the shift will enable businesses to effectively navigate the complexities of the energy landscape and accelerate the decarbonisation of the grid.

A machine learning model powers the platform to provide real-time insights, aiming to generate more accurate forecasts for the short and long term.

Have you read:
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“Now, more than ever, power markets need advanced data analytics software to ensure the grid remains balanced and that we have reliable, sustainable and affordable power during the energy transition,” states the company in a press release.

Amperon has invested in building a scalable data ingestion and management platform that analyses time-series electricity data from different grids and sources. This will play a key role as the platform expands.

The company adds that the platform was built around implementing the latest advancements in AI and cloud computing to tackle immense amounts of energy data.

Between 15-minute interval, smart meter data and the increasingly complex weather and grid variables, traditional ways of forecasting demand were inefficient. With the Series B, the company hopes to thus fine tune their predictive models and identify emerging patterns for customers.

This funding will also accelerate their expansion into new markets and build new products in the US and abroad.

The Series B brings Amperon’s total funding to $30 million. Other participants include the D. E. Shaw group, Veriten, and existing investor, HSBC Asset Management. Additionally, two long-time Amperon customers, Ørsted and another strategic utility partner, joined the round.

Technology performance insurance for Li-Ion battery customers

Great Power, a global battery manufacturer, has signed a letter of intent with Ariel Green to provide technology performance insurance for its battery cells.

Under the agreement, through Lloyd’s of London Syndicate 1910, Ariel Green will develop a coverage solution guaranteeing Great Power’s battery cells and systems backstopping the company’s warranty.

Through the collaboration, Great Power will provide technical and strategic insight to help Ariel Green develop insurance structures for the company’s lithium-ion battery products.

“We look forward to developing and implementing this comprehensive insurance coverage, backed by Ariel Green,” said Yang Xia, head of Great Power global ESS.

“This offering will de-risk our products, ensuring our customers feel confident in their choice to use Great Power battery systems both from a technology and bankability standpoint.”

“Ariel Green brings deep expertise in battery technology required to cover the complexities and potential losses associated with battery warranties and performance guarantees, especially as projects grow in size,” said Jamie Daggett, energy storage lead at Ariel Green.

“Great Power’s battery cells have been extensively evaluated and are being thoroughly validated. We’re pleased to welcome the organization as the first lithium-ion battery cell manufacturer among our portfolio of companies and we look forward to working with the team to enable Great Power to expand the deployment of its solutions on a global scale.”

The policy is available on orders starting this year.

Interconnector energy trading

BritNed, which owns and operates the 1GW HVDC interconnector linking the Netherlands and the United Kingdom, has launched Empire, the “world’s first fully-integrated interconnector platform”, states the company in a press release.

The interconnector’s high-voltage cable allows over 70 participating organisations to trade power between the two markets. To fully utilise the capacity of the interconnector and ensure safe operations, sophisticated orchestration is necessary for capacity allocation, transfer fulfilment and financial settlements.

BritNed had previously been using multiple platforms to run long term, day ahead and Intraday auctions, manage nominations and control energy flow.

An analysis, states the company, led to the conclusion that the previous setup of multiple systems, that had restricted BritNed’s ability to roll out new and flexible allocation products, should be replaced by one integrated platform.

This integrated platform aims to unlock significant productivity gains for both BritNed’s operators and clients, minimise curtailment losses, minimise process breakdown risks and remove technical bottlenecks that hinder the development of new offers.

Supercharge was asked to design and develop the platform in close cooperation with BritNed’s experts.

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The resulting platform, Empire, offers a single-window solution for BritNed clients, including energy generators and traders, as well as the BritNed operators, allowing them to manage both long and short-term auctions and nominations from one place.

As a result of optimised and automated workflows in case of unplanned outage/asset failure of BritNed’s undersea cable, BritNed states that it’s operators are now also able to react and fully take control of all operational aspects of such unforeseen consequences in minutes.

Also a result of the partnership, BritNed will soon launch the world’s first Buy Now Auction, offering both day ahead and intraday capacity after the allocation period has closed, providing more flexibility for its customers.

Over the first 10 days of its operation Empire allocated 892GW of day ahead and intraday capacity with a total allocation revenue of €4.4 million ($4.7 million) and 369MW of long-term capacity for over €1.8 million ($1.9 million).

The total flow that was instructed by Empire was 184GWh, which is equivalent to powering approximately 8,000 households every single hour.

For the latest in finance and investment news coming out of the energy sector, make sure to follow Smart Energy Finances.

I will also be attending the Bentley Year in Infrastructure awards show in Singapore next week from October 11 to 12. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar is a partnership between ABB and Export Development Canada to make debt financing of up to $2.9 billion available to ABB clean tech customers in Canada and abroad, as well as Series A financing of RMB400 million ($54.7 million) for Shanghai Electric Energy Storage Technology.

AI-based network modelling

Neara, an infrastructure modelling platform that uses artificial intelligence (AI) to create 3D, network-wide models for engineering-grade simulations and analytics, has received a new bout of funding to develop its platform.

The platform enables utility operators to design networks, enhance wildfire and vegetation management programmes and bring renewable projects online faster using their existing infrastructure.

The Sydney, Australia-based company has received a AU$10 million ($6.4 million) capital raise extension and a novel case study to double existing line capacity for renewable energy.

This increases the total Series B funding for Neara to AU$24 million ($15.3 million).

Neara will use the new investment to accelerate expansion of its AI platform in US and European markets and develop its new System of Enablement functionality.

System of Enablement

According to the company, the new model removes many of the constraints that prevent renewable generation from connecting to the grid, particularly regarding network availability and accessibility.

Neara chief commercial officer Jack Curtis commented on the platform, which he states enables utilities to make system-wide decisions:

“Our System of Enablement delivers one unified model to resolve critical macro issues, from designing stronger grids to mitigating damage caused by catastrophic weather events, as well as bringing renewable energy online faster using existing network infrastructure.”

Using the investment for its growth, Neara will offer “enterprise-grade, 3D network modelling technology”, they state in a release, that uses AI and machine learning to aggregate broad spectrums of data sources into one digital simulation environment.

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The System of Enablement will also enable insights into how existing electricity network infrastructure can be optimised to remove renewable integration constraints associated with network availability and accessibility.

Utilities can use the model to simulate how their assets will respond in the real world under any condition, based on hundreds of network and environmental variables.

These models aim to help eliminate network monitoring blind spots in stress-testing grid resilience and improve severe weather response while reducing reliance on manual field surveys.

A growing investment agenda

Neara’s financing round featured participation by Prosus Ventures and was supported by Neara’s existing investors, Skip Capital and Square Peg Capital.

The investment marks a first for Prosus Ventures in the utilities domain, traditionally investing in tech growth opportunities in fields such as logistics, fintech, health, blockchain and more.

The round comes as severe weather and wildfires continue to cause significant stress on power grids across the globe, in some cases causing blackouts

This is resulting in greater investments into power grids and networks. For example, the National Science Foundation’s EPSCoR research stimulation programme announced in August is giving research into weather-proof smart grids a $375,000 boost.

$2.9bn debt financing for ABB customer clean tech projects

Electrification and automation tech developer ABB has announced a partnership with Export Development Canada (EDC), whereby financial and insurance support will be doled out to ABB customers across the globe.

The $2.9 billion partnership between the Swedish-Swiss tech major and the financial Crown corporation will see projects from ABB customers have access to new debt financing.

The partnership seeks to encourage investments in sustainable technologies and initiatives in Canada and worldwide in the areas of electrification and automation.

EDC will offer ABB customers financial and insurance solutions, with a maximum limit of $2.9 billion, to support strategic projects in clean technologies, advanced manufacturing, digital technologies and future resource sectors.

Particular emphasis will be placed on strategic investments in growth-oriented technologies and solutions, including green hydrogen production, sustainable transportation solutions and the transition from fossil-based activities to reduce global greenhouse gas emissions.

Under the terms of the three-year partnership, commercial financing will be extended on a project-by-project basis.

This partnership aims to stimulate both global and local investments, although collaboration with innovative Canadian start-ups is also an essential component.

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$54.7 million for Shanghai energy storage business

Shanghai Electric Energy Storage Technology has secured RMB400 million ($54.7 million) in Series A financing to enhance its energy storage business.

Key areas of focus include research and development of new systems, improvement of the industrial supply chain structure and construction of 100 Mbps stacks for vanadium redox flow battery (VRFB) energy storage systems.

The company, a subsidiary of Chinese power generation and electrical equipment manufacturing company Shanghai Electric, develops kW- and MW-level flow battery energy storage products for use in grid-side energy storage, distributed smart microgrids, energy power generation and grid connection and other fields.

The company has to date successfully developed 5kW/25kW/32kW/65kW series stacks and delivered more than 50 vanadium redox flow battery (VRFB) energy storage projects.

The financing will also support corporate governance enhancements, talent development and the strengthening of research and innovation capabilities for the company.

Looking ahead, Shanghai Electric Energy Storage has plans to launch a Series B financing campaign in 2024.

Upon completion of the Series A, the post-investment valuation of Shanghai Electric Energy Storage is forecast to surpass RMB2.2 billion ($300.9 million).

With the grid becoming more of an investment target, what other initiatives have you seen gaining capital attraction? Let me know.

And make sure to follow Smart Energy Finances for the latest in finance and investment news coming from the energy sector.

I will also be in Singapore from October 11 to 12 attending the Bentley Year in Infrastructure awards. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar is a subsidiary launch from RTE International (RTEi) in the US, focusing on HVDC projects, and an equity buy-in from the Dutch government into grid operator Stedin.

CarbonScape: carving out EV batteries

New Zealand-based battery material developer CarbonScape has announced an $18 million investment, signalling the company’s plans to commercialise its biographite production in Europe and the US, enabling cleaner lithium-ion batteries for EVs and grid-scale energy storage.

According to the company, graphite is up to 50% of the weight of a lithium-ion battery, yet expected global demand far outstrips supply, with a forecast deficit of 777,000 tonnes per annum by 2030.

Graphite production is also one of the largest CO2 emitters in the battery raw materials supply chain and represents a significant proportion of the cost of a battery.

Adding to the problem, today’s battery supply chains are long and complicated, with petroleum-based and mined materials crossing the globe from its source, through processing to battery assembly, to reach end consumers.

Biographite, produced from forestry and timber industry by-products – i.e. wood chips from forestry waste – is touted by CarbonScape as a sustainable alternative for battery supply chains, which are currently dependent on petroleum-based or mined graphite.

Produced locally, the company adds how it will provide security of supply for European and US-based battery manufacturers in the face of increasing supply chain instability, while also on-shoring production of a critical material to meet rapidly growing demand.

With the investment led by Stora Enso alongside ATL and other partners, CarbonScape, the first-to-market producer of biographite, could thus provide a much-needed alternative for EV and grid-scale battery supply chains.

Have you read:
What’s in the Net Zero Industry and Critical Raw Materials Acts?
EDF UK to develop three new grid-scale battery sites

RTEi’s US Subsidiary

RTEi has launched RTE international Inc. in the US, which will focus on HVDC projects.

Making use of RTEi’s success in European projects, RTE international Inc. will provide expertise in design assessment, offshore grid interconnections, and comprehensive EMT (electromagnetic transients studies) while developing bespoke solutions for the American market and creating new local partnerships.

According to Markus VOR DEM BERGE, director of Power Electronics and Studies at RTE international, “Creating our US subsidiary is a momentous milestone in RTE international’s journey.

“This step allows us to actively collaborate with US stakeholders and drive the innovation of HVDC technology forward. Our European expertise, coupled with our new subsidiary’s strategic presence, positions us to foster remarkable progress in the realm of HVDC projects.”

RTE international is a consultancy and engineering company whose activities cover all areas of electricity transmission.

A subsidiary of RTE, Europe’s largest transmission system operator, RTE international offers tailored solutions to participants in the electricity sector, relating to the development, operation and maintenance of their networks. This includes studies of electrical systems, engineering and supervision of network infrastructure works, optimisation and digitalisation of network maintenance, as well as support for IT tools related to the electricity network.

Also from Smart Energy Finances:
UK battery energy system profits down 71%
Shell to reportedly sell sonnen

Equity buy-in

The Dutch government has become a new shareholder in grid operator Stedin.

With the agreement, the government will strengthen Stedin’s equity by €500 million ($531 million) and will take an 11.9% shareholding. Stedin says the capital will be used to continue to invest in the expansion and reinforcement of the electricity grid.

With electricity demand set to double by 2030, to connect homes, ensure that businesses can switch to sustainable electricity and install more charging points and solar and wind farms, Stedin is investing heavily in the expansion of the electricity grid, forecasting at least €8 billion ($8.5 billion) by 2030.

Commented Maarten Struijvenberg, chairman of the Shareholders’ Committee and alderman responsible for finance in Rotterdam: “It is great news that we as shareholders have reached an agreement with the Central government. The government becoming a shareholder is an important step..

“As shareholders, we have already contributed €451 million ($479 million). With the additional capital from the government, Stedin can continue with its planned investments to reinforce and expand the grid for sectors such as residential construction.”

Exclusive: Stedin chief talks realising, optimising and digitising the energy transition

Steding currently has 42 shareholders, predominantly municipalities in the province of Zuid Holland.

The transaction and addition of the government into the shareholder ranks is subject to approval by the Dutch States General and current shareholders of Stedin; If approved, “Stedin will have a high level of certainty when it comes to its capital requirements,” stated the grid operator in a release.

The provinces of Utrecht and Zeeland have recently stated that they are also interested in becoming shareholders and Stedin remains in discussion with each.

Said Danny Benima, CFO of Stedin: “Now that the Central government is becoming a shareholder, their equity contribution also has a positive effect on our credit rating. Altogether will this also result in an additional borrowing capacity of approximately €1.7 billion ($1.8 billion).”

The investment into CarbonScape comes at a very interesting time within Europe’s supply chain dilemma: China has been propping itself up as the dominant supplier of these critical materials. Do you think these types of alternatives might help prop Europe up for a competitive come-back? Let me know.

And for the latest in finance and investment announcements coming from the energy sector, make sure to follow Smart Energy Finances.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

This is according to new research coming from the UK-based energy analytics and consultancy firm, underscoring the challenging financial landscape facing investors in the maturing battery market in Great Britain (GB).

The company’s 2023 Battery Investment Landscape report reveals a 71% decline in average profits, necessitating a shift towards more sophisticated financial strategies to optimise revenue generation.

LCP Delta’s report emphasises that traditional revenue streams for investors are diminishing, a decline mainly attributed to the saturation of frequency response markets.

Following a peak in 2021 and 2022, states the company, the battery market has experienced a substantial drop in profits in comparison to the past two years.

This decline has been exacerbated by decreasing wholesale power prices and energy trading values.

Seven lessons

Through the report, LCP Delta identified seven critical financial lessons for investors, developers, and operators of battery energy storage systems (BESS) from the market situation in the UK to navigate such market conditions. The below is based on an excerpt from the report:

1. Margins will not meet prior highs

Until recently, states the research company, battery systems in GB generated profits by predominantly focusing on frequency response markets, particularly Firm Frequency Reserve (FFR) and Dynamic Containment (DC) services.

However, with these markets now saturated, achieving high returns through a straightforward strategy is no longer feasible.

2. Operators need to develop more sophisticated strategies to outperform competitors

LCP Delta’s report highlights the need for battery operators to adopt sophisticated trading strategies due to the market’s saturation.

Namely, states the company, revenue stacking from wholesale, balancing markets, and other riskier strategies like NIV (Net Imbalance Volume) chasing could potentially be lucrative for battery operators to target; such strategies could result in greater variation in the performance of different battery trading strategies.

Have you read:
UK gives green light for ‘world’s largest’ battery project
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3. Although potentially lucrative, system balancing comes with high risk

According to the report, when stacking revenues, system price spreads offer the most lucrative opportunities, however, these can also be the hardest to efficiently utilise.

A sustainable trading strategy that mitigates risk and exposure, one that aligns with the more realistic growth in the GB power market post-2022 volatility, would be a better bet.

4. Frequency Response markets, now saturated, will become a less important part of the BESS revenue stack in the future

According to the research, due to the market’s saturation, achievable prices have been eroded.

Although there are signs of increased prices with procurement uplift, this price response is unlikely to be significant, considering the strong battery storage pipeline in development, which will compete for these contracts.

5. Connection timeframes must be realistic with such a strong BESS pipeline

Citing their STOREtrack platform forecast of the BESS pipeline for GB, which is upwards of 18GW by 2030, a key consideration for developers and investors is the delays in obtaining grid connections with grid operators.

Although National Grid ESO has published a five-point plan to ease the bottlenecks, with the projected 18GW pipeline, the issue is likely to remain.

More from Smart Energy Finances
Shell to reportedly sell sonnen
Mathematical optimisation to bolster grid-based energy trading

6. Select the right location and site configuration

Location, states LCP Delta, is becoming a critical factor for developers.

While the UK government contemplates potential reforms like REMA (Renewables Energy Market Arrangement) reforms and adjustments to existing network charges, these changes could present both opportunities and challenges for operators.

For instance, the introduction of Locational Marginal Pricing (LMP) may result in narrower profit margins for BESS in less favourable locations, while those situated near demand hubs in underserved areas could enjoy more favourable revenue prospects.

According to the LCP Delta, with long connection lead-times and lower availability of connections, now may be a more appealing time to also consider co-location of storage. This will also help an intermittent renewable asset to mitigate the impact of negative pricing on the unit.

7. The Capacity Market can underpin investment cases, but bidding strategies need to consider future deratings

Citing a significant decline in derating factors for the T-4 capacity auction for 2027 to 2028, unless Capacity Market auctions clear at higher prices than have been observed in recent years, it is unlikely that BESS operators will be able to turn to the Capacity Market to sufficiently recuperate their own missing money in other markets.

Maintaining competitiveness

According to the report, to maintain competitiveness developers must intensify their due diligence efforts, considering factors such as project duration, technology and location with meticulous care.

Additionally, states LCP Delta, as demand surges due to the electrification of heat and transportation and the expansion of renewable capacity to decarbonise the power sector, the need for flexibility, especially in terms of energy storage, will continue to grow.

With this growth, highlights the report, despite short-term market signals softening the long-term outlook remains positive for BESS growth, driven by the increasing intermittency in the system.

With LCP Delta’s findings it will be interesting to see how the battery market evolves but also whether the European landscape reflects these conditions. What are your thoughts – let me know.

And for the latest finance and investments announcements coming out of the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Bentley’s upcoming Going Digital Awards in Infrastructure in Singapore in October. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are a €140 million ($150 million) financing round for investor EIT InnoEnergy as Europe is set to update energy policy, and a triple acquisition of US gas utilities by Canada-based Enbridge.

Shell to reportedly sell sonnen

On Thursday, German publication Handelsblatt reported that oil giant Shell intends to sell sonnen, the German developer of energy storage systems.

The report comes in as Shell moves to divest its retail operations within the UK, Netherlands and Germany as part of a strategic restructuring.

The strategy follows the company’s review of market conditions, announcing in June its retail exit.

Kicking off the strategy late last week, Shell sold its UK and German domestic operations to energy major Octopus Energy.

Shell’s Dutch operations are winding down and in the process of transition.

Shell acquired sonnen back in 2019. According to Handelsblatt, the sale will be a significant deal for Shell, which acquired the Bavaria-based company for €500 million ($535 million); the sale is expected to be valued between €1.35 billion ($1.4 billion) and €1.8 billion ($1.9 billion), according to Handelsblatt.

So far, sonnen has had a very strong 2023 with an expected turnover of €450 million ($482 million). Earlier this year the company announced increased capacity of its German VPP at 250MWh, marking the largest in Europe.

The company is expecting to grow the demand response tech, which consists of tens of thousands of intelligently-controlled sonnenBatteries throughout Germany, to 1GWh in the coming years.

Shell has declined to comment.

Have you read:
Iberdrola taps into automated demand response with Spanish VPP
US DOE labs built a VPP with solar, a nuke, electrolysers and storage. It worked

EIT InnoEnergy’s private placement round

Dutch energy investment company EIT InnoEnergy has received over €140 million from strategic players in industrial, financial, training and digital sectors in a private placement round.

According to the company, proceeds from the financing will be used for increasing new deal flow, launching new industrial initiatives, tapping opportunities from new regulatory frameworks and expanding in the US.

InnoEnergy’s portfolios focus on early-stage innovative technologies and teams in clean tech, normally CAPEX heavy.

InnoEnergy currently has a portfolio of 200 companies, three of which are unicorns, on track to generate €110 billion ($118 billion) in revenue and save 2.1G tonnes of CO2e accumulatively by 2030.

According to InnoEnergy, these companies have collectively raised €9.7 billion ($10.4 billion) in investment to date.

Tabled earlier this year, the European Union has been expecting to pass several policies in mind of better enabling its industrial capacity within the energy sector.

Namely, the European market design has had a proposed reform and the Green Deal Industrial Plan – within which are contained the Critical Raw Materials and Net Zero Industry Acts – will aim to upskill the workforce, develop European clean tech supply chains and lower barriers to deployment.

Part of the private placement round will, states InnoEnergy, also be used for training and upskilling:

“The new skills, and the larger workforce we will need to fulfil net zero objects, are significant, so with our shareholder make-up of those in industrial and financial sectors, and also in academia and research, we are perfectly placed to deliver progress,” stated the company.

More from Smart Energy Finances:
Mathematical optimisation to bolster grid-based energy trading
Glasgow’s SMS acquires heat pump specialist

Earlier this week, the European Network of Transmission System Operators for Electricity (ENTSO-E) hosted the first High-Level Electricity Grid Forum, of which EIT Innoenergy was a collaborator, during which the grid was placed high on the agenda as a strategic focus for future investments.

New investors in the round include Societe Generale, Santander CIB, PULSE – CMA CGM Energy Fund, Renault Group, Stena Recycling and NIIT.

Existing shareholders Siemens Financial Services, Schneider Electric, Capgemini, Volkswagen Group, ING, Koolen Industries, GROUPE IDEC and Engie were also among the strategic players.

Commenting on the announcement, Diego Pavia, CEO of EIT InnoEnergy, said: “New strategic players have joined InnoEnergy’s outstanding cap table, several shareholders have reinvested, and altogether we have secured sufficient fresh financial resources to double our on-going impact.

“The accelerated energy transition in Europe and in the world, and an increased re-industrialisation ambition in the western world are unique opportunities for InnoEnergy, its portfolio companies and our trusted ecosystem partners. We have geared up for the journey ahead.”

Details on individual investor contributions have not been disclosed.

Triple gas utility acquisition

Canada-based energy company Enbridge has acquired three US-based gas utilities to create what it is calling the largest natural gas utility franchise in the US.

Enbridge entered three separate agreements with Dominion Energy to acquire EOG, Questar and PSNC for the purchase, which totals $14 billion after deductions, including $4.6 billion of assumed debt.

Enbridge owns and operates pipelines throughout Canada and the US, transporting crude oil, natural gas and natural gas liquids. The company also generates renewable energy, touting a growing European offshore wind portfolio.

Upon the closings, Enbridge will add to its portfolio gas utility operations in Ohio, North Carolina, Utah, Idaho and Wyoming, representing a significant presence in the US utility sector.

The acquisitions will double the scale of the company’s gas utility business to approximately 22% of Enbridge’s total adjusted EBITDA and is hoped to balance the company’s asset mix evenly between natural gas and renewables, as well as liquids.

Enbridge states that following the closings, its gas utility business will be the largest by volume in North America with a combined rate base of over CDN$27 billion ($19.8 billion).

In a press release announcing the acquisition, Enbridge cites how “high-quality, utility cash flows from the gas utilities” will reduce its business risk.

Michele Harradence, president of GDS and executive vice-president at Enbridge, commented that the utilities, each being based in the US, offer strategic advantage when it comes to regulation, namely how they “operate in regions with very attractive regulatory regimes” while offering diverse, low-risk growth opportunities.

However, earlier this week, credit ratings agency Moody’s changed Enbridge’s outlook from stable to negative, a result of the acquisitions.

“The negative outlook on Enbridge is prompted by the company’s announcement that it would acquire US gas utilities… adding pressure to an already weak financial profile that we expect to persist following the transaction close,” said Gavin MacFarlane, Moody’s vice-president – senior credit officer.

“Although Enbridge’s business risk profile improves modestly with the transaction, it is not enough to offset ongoing pressure on the company’s financial profile.”

What are your thoughts on Shell‘s reported strategy to move away from the residential market? If the reports are correct it will be interesting to see who manages to acquire sonnen, which has only been growing.

For the latest finance and investment announcements coming out of the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Bentley’s upcoming Going Digital Awards in Infrastructure in Singapore in October. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar are stats from BNEF showing how, in 2022, clean energy activities generated at least $2.56 trillion globally and the latest green bond from E.ON valued at a total of €1.5 billion ($1.6 billion).

Energy trading optimised by grid physics

US-based SESCO Enterprises has announced the use of a mathematical optimisation model to simulate market dynamics based on the transmission grid.

Namely, the power trader has signed on with Gurobi Optimisation LLC, which develops decision intelligence tech, to support their price optimisation.

As a trading firm in the energy markets, SESCO’s goal is to simulate the condition of the national grid, as well as consumer demand for the electricity it delivers.

These outputs simulate energy market dynamics and become inputs to the models SESCO has built to determine bid pricing at auction.

“The unique thing about electricity markets is that prices aren’t really determined by people buying and selling in an order book. Next-day prices are determined at the ISO (Independent System Operator) auction, where clearing prices are often set by the outcome of an optimisation solve – typically using tools like Gurobi,” explains Dylan Modesitt, chief investment officer of SESCO.

“So using the partial information we have, we try to determine what the optimal pricing would be.”

Have you read:
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SESCO’s business involves speculating on next-day electricity prices, as well as the longer-term forward markets for trading power.

“Our trading expertise is about the congestion component of price, which is the kind of pricing differential that arises from transmission lines being saturated at their limit,” explained Modesitt.

“And when transmission lines are saturated to some local limit, loss is going to emit as heat. So to avoid any kind of catastrophic failure, price signals are sent on either side of that transmission line. It’s a lot of demand speculation, and it requires an understanding of the actual physics of the grid.”

SESCO began building out mathematical models and used them to solve toy problems with another commercial solver.

However, states the trader, due to several million constraints and variables, either the incumbent solver was unable to find feasible solutions, or each solve simply took too long to be useful.

Hence the turn to Gurobi, which they state provides a solution that can capture the complex effects of the physical grid state as it impacts market outcomes.

Specifically, the advanced optimisation techniques used by Gurobi’s solver, states SESCO, improve the pricing precision and capital efficiency of their trading approach.

Listed global firms hit $2.56 trillion in clean energy revenues

According to analysis from BloombergNEF (BNEF), in 2022 clean energy activities generated at least $2.56 trillion globally, with power utilities and renewable manufacturers accounting for two-thirds of the figure.

The figure forms 2.6% of GDP, according to BNEF’s Clean Energy Exposure Ratings, which identified and rated over 8,000 listed companies with revenue exposure to clean energy activities, from over 50,000 assessed.

Listed electric utilities like EDF, Enel and E.ON accounted for $1.06 trillion (42% of the total) in clean energy revenues, followed by renewable energy manufacturers and developers including CATL, Vestas and Trina Solar, contributing $628 billion (25%) in clean energy revenues in 2022.

“While automakers like Volkswagen and Toyota are among the biggest earners in the rankings, their exposure remains low and so the auto industry only contributes $370 billion to the total,” said Mike Daly, lead author of the report.

Also from Smart Energy Finances:
Glasgow’s SMS acquires heat pump specialist
BEV fires shoot down Nikola shares

E.ON issues €1.5 billion in green bonds

E.ON has successfully issued two bond tranches with a combined volume of €1.5 billion ($1.6 billion), backed by a combined peak orderbook of €4.3 billion ($4.7 billion).

Both tranches value €750 million ($815.6 million) each, with the first maturing in March 2029 and the second in August 2033.

E.ON’s CFO Marc Spieker commented on the green bonds: “The high demand from investors underlines again that we are on the right track with our strategy, which is focused on sustainability, digitalisation and growth.

“E.ON is determined to drive forward the energy transition in Europe. We want to invest a total of €33 billion ($35.9 billion) in the energy transition by 2027. Green bonds are an important financing instrument to do this, and we will continue to use them for our financing in the future.”

According to E.ON, a positive market environment has already allowed them to prefund financing needs for the upcoming 2024 fiscal year, while 2023 funding needs were already covered successfully by a €1.8 billion ($2 billion) bond issuance in January.

The proceeds of this green bonds will thus be used to finance and/or refinance Eligible Green Projects as defined in E.ON’s Green Bond Framework.

Bank of America Securities, Deutsche Bank, Natwest Markets and Unicredit served as active bookrunners in the transaction.

What are some of the strategies you’ve seen companies use to improve their energy trading and analytics? Are there any you’d like to see covered? Let me know.

For the latest finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

Cheer,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are two further acquisitions: that of a Chinese EV manufacturer by a Dubai-based tech company, as well as of a grids-focused advisory company by a US-based global consultancy.

SMS acquires heat pump division for flexibility services

The Scottish smart metering company has announced the acquisition of Evergreen Energy’s domestic services division, which specialises in the installation and maintenance of renewable energy assets, including heat pumps, solar and battery storage for homeowners.

According to SMS, the acquisition will enhance their capacity to deliver an extended range of low-carbon, behind-the-meter energy solutions to the UK’s domestic and commercial marketplaces.

The company, which earlier this year pointed to their flagship smart meter services and storage portfolios as key profit areas, is calling the acquisition “highly complementary to SMS’s leading role in the delivery of Great Britain’s smart meter programme, owning and managing c.4.5 million meter and data assets for customers,” they state in a press release.

Heat pumps are a key clean tech asset for enabling demand side response, which is gaining attraction in the UK as a method of alleviating peak demand on the country’s grid system.

The acquisition is thus hoped to deliver associated data solutions and demand flexibility services to energy suppliers, businesses and consumers.

Earlier this year in February, SMS announced a demand side response project, part of the UK Government’s Flexibility Innovation Programme, to design and deliver testing schemes for flexibility applications.

Earlier this week, UK market research company Cornwall Insight released research illustrating the crucial element smart meters represent for flexibility services, which have exponential savings potential, should households participate.

Also from Smart Energy Finances:
How the faltering grid drives investment
IMServ’s strategic smart metering acquisition to tap MHHS

SMS’s acquisition follows other strategic investments made last year in EV charge point software company, Clenergy EV, and of smart energy data platform, n3rgy, which similarly bolstered SMS’s presence in the EV charging infrastructure and data services markets.

Evergreen Energy’s other divisions, including the Homely and Easy MCS brands are not included in the transaction and will operate independently from the Evergreen Energy brand going forward.

Stated SMS CEO Tim Mortlock: “Whilst we will continue to operate the Evergreen Energy brand that has been successfully established within the northwest, the acquisition will bolster the Group’s overall capacity to deliver these carbon reduction assets on a wider national scale to a fast-growing domestic and commercial marketplace.

“The location of Evergreen’s Manchester base close to our national training academy and innovation centre in Bolton, where we are focussed on upskilling our engineering workforce and testing new technologies, will also be highly beneficial.”

A Middle Eastern acquisition of Chinese EV manufacturing

Dubai-headquartered mobility tech company NWTN has reached an agreement to make a strategic investment of $500 million in China Evergrande New Energy Vehicle Group (EVGRF), a Chinese automobile manufacturer that specialises in developing EVs, aiming to accelerate the company’s position in the EV space.

NWTN and EVGRF entered into a share subscription agreement pursuant to which NWTN will acquire approximately 27.50% of shares of EVGRF alongside the right to nominate a majority of EVGRF’s board.

The proposed transaction is expected to close in Q4 2023, subject to customary and other closing conditions.

NWTN, a mobility and green energy company, has a full vehicle assembly facility in Abu Dhabi. Technologically, the company has expanded its capabilities to include PV generation, green hydrogen production and energy storage.

The strategic acquisition forms part of the company’s continuing expansion, vying in growing markets in the Middle East, North Africa, China and other countries.

NWTN states an emphasis for their business on the use of AI technologies, autonomous driving and personalised passenger experience as key to its market positioning.

The company believes a partnership with EVGRF will be instrumental in addressing the EV needs of the Middle East and will facilitate EVGRF’s research and development and mass production of new car models for eventual export overseas.

According to Reuters, the deal forms part of a $3.2 billion plan unveiled by Evergrande to reduce its debt and stay afloat.

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Consultancy’s acquisition to reinforce grid expertise

US-based ICF, a global consulting and tech services provider, has acquired CMY Solutions, a power and energy engineering firm that advises on decision-making for grid modernisation, programmes and investments.

Founded in 2016, CMY’s team of 50 specialised experts advise senior leaders of utilities and developers across the US, Europe and Asia, including investor-owned utilities, electric municipalities and electric cooperatives.

ICF on the other hand consists of approximately 9,000 employees, consisting of business analysts and policy specialists who work alongside digital strategists, data scientists and creatives in the public and private sectors.

The acquisition brings to ICF strong backgrounds in renewable energy integration, distributed energy resources (DER) impact studies and management.

Additionally, CMY brings “deep technical expertise in substation, transmission and distribution system design, protection and control, North American Electric Reliability Corporation (NERC) compliance, as well as system planning and capital strategy consulting,” states ICF in a press release announcing the acquisition.

Commenting on the acquisition was John Wasson, ICF chair and CEO, who stated how the deal will “strengthen our ability to support utilities’ needs for grid transformation, reliability, resilience and renewables integration in a much more holistic way.

“As one team, we will scale our industry-leading energy service offerings and continue to grow our rapidly expanding technology and data management capabilities across the various markets we serve.”

Acquisitions have been key in this week’s Smart Energy Finances with smart metering for flexibility, EV manufacturing and grid modernisation expertise for consulting all seen driving strategic corporate moves.

What are your thoughts? What have you seen as having a large influence on decision-making when it comes to acquisitions in the energy sector and what would you like me to cover?

Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar is significant growth from Chameleon Technologies, which announced their 10 millionth smart meter IHD as well as Greenbird’s acquisition by energy giant GE Vernova.

Nikola Motors shares on the fall

Nikola Motors, an Arizona-headquartered electric truck maker, has voluntarily recalled 209 battery electric vehicles (BEVs) after reporting a coolant leak as the cause of an EV truck fire at their headquarters earlier this year.

A temporary hold has been placed on Nikola’s BEV sales.

“The safety of customers, dealers and team members are Nikola’s top priority,” stated the company in a press release last Friday as days later the company’s stock plummeted.

According to Bloomberg reportage, the company’s shares fell by up to 20% at the start of the week, a trend signalling another nail to the coffin after the company’s shares were recorded as falling 98% from their peak reached in June 2020.

Internal investigations from Nikola’s safety and engineering teams indicated a single supplier component within the battery pack as the likely source of the coolant leak.

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“At Nikola we take safety very seriously,” said Steve Girsky, Nikola’s CEO. “We stated from the beginning that as soon as our investigations were concluded we would provide an update, and we will continue our transparency as we learn more.”

The company’s initial statement on the fire in June alluded to foul play as a possible cause, although a review has since suggested foul play or other external factors were unlikely.

Although the Class 8 Tre BEV’s have been recalled, the company has stated that their hydrogen fuel cell electric vehicles (FCEVs), which are currently in production, will not be affected as they make use of a different battery design.

According to the company’s Q2 2023 report, 18 customers placed orders to Nikola and dealers for over 200 hydrogen FCEVs.

Nikola Corporation designs and manufactures heavy-duty BEVs, FCEVs and energy infrastructure solutions, such as energy storage systems and hydrogen charging station infrastructure, through its brand HYLA, which was launched in January this year to oversee the company’s energy products for producing, distributing and dispensing hydrogen.

The BEV case follows the company naming a fourth CEO after Michael Lohscheller stepped down earlier this month due to family concerns, leading to the company losing more than a quarter of its market value, states Reuters. Lohscheller was replaced by former General Motors executive Stephen Girsky.

Nikola has flagged “substantial doubts” about its ability to continue as a going concern for the next year, reiterating its warning for the third time since February, as it awaits “critical” additional capital.

The news from Nikola also comes as concerns rise over fires caused by EV batteries.

Research released in February this year, Full-scale fire testing of battery electric vehicles, finds that although the characteristics of BEV fires are similar to those of traditional passenger vehicles, jet flames caused by thermal runaway – a result of exponential increases in heat within the battery cell – “accelerates the fire spread to other combustibles of BEVs”.

Thus, states the researchers, thermal runaway and reignition mark major risks to first responders.

Also from Smart Energy Finances:
How the faltering grid drives investment
IMServ’s strategic smart metering acquisition to tap MHHS

GE Vernova acquires Greenbird

Energy major GE Vernova’s digital business has acquired Greenbird Integration Technology AS, a data integration platform company focused on utilities.

The acquisition comes 10 years after Greenbird’s launch; the company’s platform will accelerate GridOS, which the company calls “the world’s first software portfolio designed specifically for grid orchestration, adding new capabilities for connecting systems and integrating data across the grid more easily and at scale”.

The financial terms of the acquisition are not being disclosed.

The Greenbird acquisition is hoped to expand the capabilities of GE Vernova’s data fabric, eliminating data silos to make it faster and easier to connect and aggregate energy data, reducing the time and expense of data integration projects.

Responding to Smart Energy International was Frederik ten Sythoff, Greenbird VP of communication and marketing, who commented on the company’s outlook after the successful acquisition:

“As a company, we are proud that we have contributed with our thought leadership to highlight the importance for utilities to move into a data-driven future and with our technology to simplify this transition for them.

“We see the challenges in the industry are getting bigger and bigger. We need a much bigger focus and bigger solutions to make an impact. We’re using data to accelerate the industry and world to sustainable energy.

“GE Vernova has a legacy and proven track record to address these unique challenges we are facing in the energy sector. The acquisition is a strong signal and commitment to utilities, partners, and the industry of the strength of GridOS and the important role it’ll play in accelerating a more sustainable energy grid.”

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Chameleon Tech’s 10 millionth IHD and significant growth

UK-based smart energy technology business Chameleon Technology has announced the manufacturing and delivery of its 10 millionth in-home display (IHD), a record they state for the industry, enabling insights into energy consumption for consumers through “visible, transparent, real-time data” they state in a release.

The IHDs connect to energy providers’ smart meters to help consumers track their energy use and costs. By the end of the UK smart meter rollout, two in every three homes are projected to have a Chameleon Technology IHD, according to the company.

The announcement of the milestone was followed by the opening of new offices for the clean tech company in the UK, after being awarded over £3.6 million ($4.6 million) in government funding for additional projects, including the Green Home Finance Accelerator (GHFA).

The GHFA aims to make available innovation funding for the development of green finance products which can enable the uptake of home energy efficiency, low carbon heating and micro-generation retrofit measures in the UK.

Through their award, Chameleon Technology’s HTC-UP project will aim to help domestic homeowners looking to improve their home’s energy efficiency, with initial support tailored to the needs of landlords.

The funding will be used to assess the viability of a “one-stop-shop for energy efficiency improvements” they state, from initial assessment to financing.

Heat Transfer Co-efficient (HTC) technology will be used to provide homeowners with an accurate measurement of a property’s energy efficiency rather than having to rely on the survey-based method used to produce current EPC (engineering, procurement and construction) ratings.

The HTC algorithm takes smart meter data and internal temperature readings, collected through the ivie Bud in-home display, and combines these with external temperature readings gained from third party weather data.

This combination of data is hoped to create a much more accurate measurement of how much heat is escaping the home, leading to a more precise carbon-efficiency score for the property.

What are your thoughts about the financial insecurities that come with investments in new technologies?

Let me know and make sure to follow Smart Energy Finances for the latest finance and investment news coming out of the energy sector.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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Namely, a new battery energy storage fund has been announced in the US, which will be used to establish multi-year offtake contracts for asset owners in Texas and California.

And in Europe, TenneT and Alliander have announced their H1 results, both citing the grid as a key investment theme.

Energy Storage Fund

Gridmatic, a US-based power marketer, has launched its first Energy Storage Fund.

They will use the $50 million fund to oversee the management of up to 500MW of battery capacity in the ERCOT (Electric Reliability Council of Texas) and CAISO (California Independent System Operator) markets.

The fund is divided into two tranches, with the initial one successfully completed through a $24.95 million investment from an energy investor.

Using the fund, Gridmatic will establish multi-year offtake contracts with asset owners to operate energy storage using its AI algorithms.

Gridmatic has already begun operating a 50MW/100MWh battery storage system in Texas using the fund.

Announcing the release, Gridmatic cites its ability to ensure secured revenue streams for developers’ projects through offtake agreements, enabling them to obtain necessary financing.

This, in turn, empowers storage developers to recycle their capital into the development of additional storage systems.

Gridmatic is then able to maximise the returns of the contracted storage systems via its AI-enabled optimisation, they state.

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The company references their storage report, showcasing a 46% increase in revenues when back-tested against actual results for storage systems in the ERCOT market in 2022.

“By decoupling project development and active management of the batteries, this structure derisks the operational phase of a project for storage owners and supports the growth of the energy storage industry,” states the company in a release.

The fund is also hoped to open a new asset class for investors, with the sector’s growth set to be further accelerated by the Inflation Reduction Act.

The fund is proof that new kinds of investment opportunities are on the rise as the battery energy storage market is maturing. This is fuelled by extreme market volatility due to the growth of renewables and extreme weather and an increased need for grid stability.

Grid investment driving H1 results

After the first six months of 2023, companies and utilities have been releasing their quarterly and half-yearly results to demonstrate their successes or disappointments.

H1 results from TenneT and Alliander in particular are of interest, as they show the allocation of funds into grid systems. TenneT has been heavily investing in the grid to ensure security of renewable supply in the wake of the war in Ukraine, while Alliander has been reinforcing power lines as the grid continues to falter.

Also from Smart Energy Finances:
IMServ’s strategic smart metering acquisition to tap MHHS
AMI provider acquires a narrowband communications solution

TenneT

In the first half of 2023, TenneT invested €3.5 billion ($3.9 billion) in grid expansion and replacement, almost double the investment they made for the same period last year.

The Dutch-German TSO’s underlying EBIT increased by €351 million ($387.5 million) to €930 million ($1 billion).

In announcing the results, TenneT is calling the first half of 2023 “marked by solutions and partnerships for the medium and long term economies of scale.”

TenneT’s ‘economies of scale’ is reference to completion of large and long-term framework agreements to develop high-voltage infrastructure, including framework contracts for 14 grid connection systems, each with 2GW capacity and valuing a total of more than €40 billion ($44.2 billion).

Stated TenneT CEO Manon van Beek: “The huge grid expansion and maintenance task we carry out for the energy transition does not take place overnight. With our hundreds of projects, both onshore and offshore, now and over the next two decades, we are realising the electricity system of the future with a clear end picture in mind: Target Grid 2045.

“Achieving economies of scale, innovating together with the market, international cooperation and timely and governmental supported long-term infrastructure planning are key in making a carbon-neutral energy system feasible and affordable for households, industries, suppliers and TenneT itself.”

Alliander

The first half of 2023 saw network company Alliander invest €60 million ($66.2 million) more into expanding and maintaining the gas and electricity network than in the same period last year.

However, despite the significant investment figure, the company has also stated how “it is impossible to keep up with the pace of the energy transition” calling on companies for flexible use of the electricity grid to relieve congestion pressure as the Netherlands continues to experience bottlenecks.

Alliander’s net result in the first half of 2023 amounted to €109 million ($120.3 million), €2 million ($2.2 million) higher than last year. Operating income for the first six months increased by €275 million ($303.6 million) to €1.37 billion ($1.51 billion).

However, total operating expenses increased by €258 million ($284.9 million) in the past six months, mainly due to higher costs for grid losses because of rising energy prices. Operating costs also rose due to rising purchasing costs at TenneT.

In the first half of 2023, 595 new transformer houses were built with 1,084km more cable laid than in the first half of 2022 (918km).

Are your investments plans guided by the need to expand and secure a reliable grid? Let me know.

Make sure to follow Smart Energy Finances Weekly for the latest in finance and investment news coming out of the energy industry.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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Also on the radar are robust earnings from an Indian company for their shunt resistors, which they claim to be the “backbone of smart metering technology and energy management systems” as well as a raised Series B funding round for Electric Vehicle (EV) services provider ev.energy, which they will use for global expansion and new EV data-driven services.

Acquisition to bolster smart metering expertise

IMServ Europe, a UK-based energy data collection and metering specialist, has acquired Power Data Associates, a specialist meter administrator providing unmetered services to electricity, gas and water utilities and non-domestic energy customers.

IMServ is calling the acquisition an augmentation of their existing proposition in energy data collection, advanced meter infrastructure (AMI) and smart metering.

According to the company, unmetered supplies metering systems will be required to upgrade to half-hourly settlement as part of a forthcoming market-wide half-hourly settlement (MHHS) rules.

IMServ has already identified MHHS as a key strategic priority and aims to ease the transition for every sector of the market.\

The acquisition of Power Data Associates is hoped to enable this goal and allow customers with both metered and unmetered requirements to meet their needs ‘under one roof.’

IMServ will be the only company to offer the full range of MHHS services across the metered and unmetered data services segment.

Power Data Associates will continue to operate as a standalone company, with all current employees and senior leadership retained.

Power Data Associates specialises in providing services to help customers manage their unmetered energy usage. Key unmetered applications include street lighting, telecommunications infrastructure and, increasingly, electric vehicle (EV) charge points.

IMServ on the other hand is one of the UK’s leading meter operators and data collectors, servicing over 25% of the UK’s electricity consumption through the monitoring of 80 billion units of energy data.

Also from Smart Energy Finances:
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Robust earnings from smart meter shunt resistors

Indian manufacturer of bimetal/trimetal strips and shunt resistors Shivalik Bimetal Controls has announced robust financial performance for Q1 FY24.

The company reported operational revenue rise to Rs113.07 Crore ($13.7 million) signalling 15.74% YoY growth. According to CFO Rajeev Ranjan, this is “our highest quarterly number in history.”

The company is calling the financial growth reflective of the Indian and global shift towards electrification.

The Indian government’s RDSS scheme has been opening up significant revenue streams for smart metering projects in the aims of reducing aggregate transmission and commercial (AT&C) losses.

Stated the company’s chairman, S.S. Sandhu, “Our shunt resistors are part of the backbone of smart metering technology and energy management systems, providing the precision and reliability required for efficient energy usage.

“As India accelerates its smart meter deployment to achieve electrical energy security, we are proud to be a key player in providing critical components, contributing to the country’s electrification renaissance.”

Shivalik Bimetal Controls was founded in 1984 and is headquartered out of New Delhi. It manufactures and sells thermostatic bimetal/trimetal strips for switching components used in electrical, electronics, automotive, agricultural, medical, defence and industrial applications.

The rising demand for switchgear, battery management and smart metering systems, they state, conveys solid long-term prospects for their product lines.

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ev.energy enters grid services with successful financing

ev.energy, an EV charging software platform, has received a $33 million Series B raise, bringing total funded capital to $46M.

ev.energy connects EVs to grid networks, intelligently managing charging for more than 120,000 EVs daily by charging vehicles at grid-friendly times and connecting them to the company’s virtual power plant (VPP).

This latest funding round provides a pathway for ev.energy to access an additional 400 million energy customers by utilising their shareholders’ energy retail, fleet, vehicle and insurance networks.

The funding round was led by National Grid Partners (NGP) with support from Aviva Ventures, WEX Venture Capital and InMotion Ventures, with continued support from existing investors Energy Impact Partners (EIP), Future Energy Ventures (FEV) and ArcTern Ventures.

The funding will also enable ev.energy to expand its global operations while building on its growth across the US and UK.

Since 2018, ev.energy has won over 30 national, regional and municipal utility contracts while developing partnerships with charging brands and auto original equipment manufacturers (OEMs) like the Volkswagen Group.

In announcing the funding, the company cites their offering of moving, storing and discharging energy for megawatts in flexible capacity as a crucial service in a time when utilities in the US and Europe tackle extreme weather conditions, placing significant strain on the electricity grid system.

Bobby Kandaswamy, Senior Director of Pathfinding & Incubation Investments at National Grid Partners, commented, “ev.energy’s approach to providing a convenient, compelling experience for drivers to charge at home and on the road during grid-friendly times is essential for grid operators.

“Combined with its V2G services, ev.energy positions utilities like National Grid as an accelerant to the clean energy transition.” As part of NGP’s investment, Kandaswamy has joined the ev.energy board of directors.

ev.energy will also use these partnerships to co-create services that leverage vehicle data, deliver smart charging and, in the future, more fully develop bi-directional charging.

WEX Venture Capital’s investment will support the expansion of ev.energy’s solution to bring managed charging to fleet vehicles.

For the latest finance and investment news coming out of the energy industry, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

Also on the radar are announcements of a ‘resilient’ business model based on smart meter-generated revenue for Smart Metering Systems (SMS), growth financing for a smart meter data analysis provider and a €3 billion ($3.9 billion) scheme for cleantech companies in Germany.

AMI provider Ubiik acquires Mimomax Wireless

Taiwan-based Ubiik, an IoT and Advanced Metering Infrastructure (AMI) provider, has acquired New Zealand-based Mimomax Wireless, a provider of communication solutions for narrowband channels.

The acquisition is being touted as an acceleration of Ubiik’s market expansion.

The new combined entity, which has not yet been named, aims to bring new wireless solutions to market, providing communications for utilities and critical infrastructure.

According to the Taiwanese provider, their current business is on track to exceed 1 million AMI device deployments by 2024, citing the “coverage limitations of existing public LTE networks that impede utilities’ AMI deployments” as the prime challenge they seek a solution towards, the company stated in a joint press release announcing the acquisition.

Since 2007, Mimomax Wireless established itself as a manufacturer of radios utilising Multiple Input, Multiple Output (MIMO) technology.

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The Kiwi company caters to utilities, stakeholders within the energy sectors and governments among others. Their communications solutions, states Mimomax, optimises data throughput and enables near-real-time visibility of critical assets.

Commenting on the announcement was Tienhaw Peng, founder and CEO of Ubiik, who stated how the acquisition “injects additional momentum into our collective growth. In tandem, we’re poised to boost the performance, security and cost-effectiveness of critical networks.”

Ubiik states how the merger will allow for an array of new solutions for mission and business-critical communications. For example, existing US utility customers who have deployed Mimomax products in the narrowband 700MHz Upper Block A can now leverage their spectrum acquisition by adding Ubiik’s goRAN NB-IoT Band 103 as a retrofit.

This opportunity, adds the AMI provider, offers the ability to connect smart meters and IoT devices for “a fraction of the cost of deploying new pLTE infrastructure”.

SMS’s ‘resilient’ smart metering business model

Glasgow-based smart meter and carbon reduction asset developer Smart Metering Systems (SMS) has, within its H1 2023 trading update and outlook report, reported 13.3% revenue growth.

Specifically, the Scottish clean tech company’s Index-linked Annualised Recurring Revenue (ILARR), a referral to revenue generated from meter rental and data contracts, grew from £97.1 million ($125.4 million) at the close of December 2022 to £110 million ($142 million) as of June 30, 2023.

The company’s CEO, Tim Mortlock, commented on the growth, citing the ‘resilience’ of their model:

“We have delivered another strong operational and financial performance during H1 2023, a testament to the resilient nature of our business model which is underpinned by our index-linked recurring revenues.

“Our existing pipeline of meter and grid-scale battery assets is expected to more than double the Group’s EBITDA in c.4 years compared to FY 2022, with significant additional growth opportunities in existing and developing CaRe assets.”

Within the first half of 2023, the company SMS installed 220,000 smart meters and has maintained market share of 14%.

According to the report, their engineering capacity delivered higher volumes of activity, largely driven by transactional callout services alongside a higher proportion of single fuel installations.

The Group also increased its engineering capacity and expects meter installation run-rate to accelerate as a result.

When it comes to financing, the Group claims its current pipeline of smart meters and grid-scale batteries can be fully funded from asset-backed, internally-generated cash flows and debt facilities.

The Group is also considering asset recycling to maintain a “prudent level of gearing in the medium term and to support future growth”, they state in the release.

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Expansion financing for a smart meter data analysis provider

CIBC Innovation Banking has increased its growth financing commitment to Bidgely, a provider of AI-powered energy intelligence solutions for energy providers worldwide.

The additional financing commitment of $18 million – 2020 saw Bidgely secure $8 million from the same company – will strengthen Bidgely’s ability to support critical utility initiatives, namely within the EV and grid modernisation markets.

Bidgely’s UtilityAI analyses smart meter data to provide appliance-level insights into daily energy consumption, giving utilities insights into energy usage patterns and anticipated grid loads.

Bidgely touts its platform’s ability to coordinate accurate grid planning and load forecasting, together with the ability to better manage the influx of EVs on the grid through optimised time of use, load shifting and managed charging.

“Utilities around the world rely on Bidgely’s artificial intelligence-powered energy solution to guide their clients to smart energy decisions,” said Amy Olah, managing director of CIBC Innovation Banking. “Our continued support speaks to Bidgely’s success and our commitment to back innovative software companies across North America throughout their growth journey.”

€3bn for German low-carbon tech – batteries, heat pumps and more

The European Commission has approved a €3 billion ($3.9bn) German scheme under the Temporary Crisis and Transition Framework to support private investments in low-carbon assets for the country’s transition to net zero.

The scheme, touted as in line with the tenets of the proposed Green Deal Industrial Plan, will take the form of direct grants, tax advantages, subsidised interest rates and guarantees on new loans for companies producing low-carbon technologies.

Said companies will include those with business in battery energy storage, heat pumps, electrolysers, wind turbines, solar panel, CCUS and key components needed to produce such tech or related critical raw materials necessary for their production.

The aid will be meted out by 31 December 2025.

For the latest finance and investment news coming out of the energy sector, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Series A for autonomous EV charging

Rocsys, a developer of autonomous charging solutions for electric transportation, has announced a $36 million Series A funding round.

Rocsys combines soft robotics, AI-based computer vision and data-driven services to adapt existing chargers into an autonomous system that can plug in and out without manual intervention.

According to the Dutch company, the solution removes the risk of operator errors, ensures regulatory compliance and vehicle uptime and minimises damage and human exposure to high-voltage equipment.

They add how the solution works for consumer and fleet vehicles, including port equipment, industrial applications, heavy-duty and more.

Led by SEB Greentech Venture Capital, the round includes participation from Graduate Entrepreneur, the European Investment Bank (EIB) and returning investor Forward.One.

With the investment, which includes a roughly equal split of debt and equity financing, Rocsys will expand the capabilities of its platform as it scales up its presence in the US and Europe.

“There’s too much friction in the EV charging process today, creating needless barriers to sustainable transportation,” said Rocsys Co-founder and CEO Crijn Bouman.

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“That’s why we created a technology-agnostic solution that converts any charger into a fully automated experience, maximising the return on investment and sustainability impact of already-installed charging infrastructure. With this Series A funding, we’re bringing this breakthrough solution to more customers and industries worldwide.”

The capital infusion will support research and development into additional features for the platform, which include intelligent parking guidance, expanded software integrations for vehicle navigation and fleet management systems and additional remote diagnostics and teleoperations support.

Rocsys also plans to build out its North American division, headquartered in Portland, Oregon, to further support application engineering and customer service in the region while expanding local supply chain and manufacturing activities.

As part of the round, Rocsys welcomes four new members to its Board of Advisors, including Mikko Huumo of SEB, Frederik Gerner, and Jan Willem Friso of Forward.One, and new chairperson Dr Gregor Matthies.

Ireland’s GridBeyond acquires Veritone Inc Energy Business

Through an acquisition, Veritone Energy’s acumen and energy management solutions have been integrated into Irish tech developer GridBeyond.

California-based Veritone develops software that uses AI for energy forecasting, optimisation, and control, aiming to unlock the full potential of Distributed Energy Resources (DERs) while enhancing reliability.

Dublin-headquartered GridBeyond, on the other hand, develops a technology platform that provides real-time optimisation of distributed assets across a range of industries and asset types.

The acquisition sees Veritone’s extensive portfolio of such AI-powered solutions integrated into the Irish business. It is also a strong growth signal for GridBeyond, expanding its capabilities in the US.

The combination of the two technologies will allow GridBeyond to offer more functionalities to its customers through a new design platform, which they describe as “an extremely accurate forecasting technology” in a press release announcing the acquisition.

One particular combination is that of Veritone’s aiWARE Enterprise platform, which utilises AI forecasting to boost profit from DERs, into GridBeyond’s virtual power plant (VPP) platform.

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Equity capital for a VPP

In the realm of VPPs, Leap, a software platform that aggregates DERs and connects them into VPPs, has secured a new capital raise totalling $12 million in equity financing.

The California-based company utilises customer meter points – to date connecting over 70,000 in the US – to facilitate automated access to energy markets.

Assets such as battery storage systems, EV charging points, smart thermostats, building management systems and other DERs are connected, with the aim of easing the process for technology providers and operators to earn revenue in demand response and other grid services programmes.

Leap co-founder and CEO Thomas Folker, commented on the successful finances: “With this new investment, we will continue to add high-value features to our platform, grow our network of technology partners and expand our value stack across geographies as we advance our mission to decarbonise the world’s electric grids.”

Earlier this year in April, the US-based VPP operator joined the Virtual Power Plant Alliance (VP3).

“Distributed energy resources are a growing priority for both consumers and utilities. With Leap’s unique ability to monetise all types of assets — from energy storage to electric vehicles to building management systems — it is a market maker in an increasingly crowded field,” said Standard Investments’ Logan Ashcraft, who was named to Leap’s board of directors.

The funding round was led by Standard Investments with participation by DNV Ventures and Sustainable Future Ventures as well as existing Leap investors, including Union Square Ventures, Congruent Ventures and National Grid Partners.

An acquisition to bolster ultrasonic water meter readings

French industrial group Sagemcom, which develops broadband communication and energy solutions, has acquired Odit-e, a French digital player specialising in AI solutions for the planning, operation and maintenance of low-voltage drinking water electrical distribution networks.

The acquisition enables Sagemcom to broaden its range of software solutions (namely the Siconia software suite) for network managers, relying on Odit-e for the analysis of data collected by smart meters and sensors installed in the networks.

According to Sagemcom, the Siconia technology offering includes a range of ultrasonic smart water meters to control, monitor and manage water use in residential and industrial environments.

Odit-e’s solutions, utilising smart meter-gathered data, aims to inform decision making for DSOs, through ‘Physics informed AI’ algorithms.

Thus, through the acquisition, Sagemcom is aiming to strengthen its position in the electricity and water distribution markets.

In a release announcing the acquisition, Patrick Sevian, Sagemcom president commented on how the deal “strengthens our expertise in energy transition and enables us to meet the growing needs of energy and water distribution operators.

“By combining the skills of Odit-e and Sagemcom, we are convinced that we will be able to offer ever more innovative and efficient industrial solutions to our customers.”

Make sure to follow Smart Energy Finances Weekly for the latest in finance and investment announcements coming from the energy industry.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

Also on the radar is capital commitments for a Danish renewables fund held by Copenhagen Infrastructure Partners, which they claim place it on track to being the biggest of its kind globally, as well as the EIB’s raised support package to REPowerEU of up to €45 billion.

Enel sells part of Australian operations

Italian green energy major Enel, acting through its fully-owned subsidiary Enel Green Power (EGP), has signed an agreement with Japan-based INPEX Corporation, for the sale of 50% of the Group’s activities in Australia, namely Enel Green Power Australia and Enel Green Power Australia Trust.

The sale of the two entities, which are currently wholly owned by EGP, went for approximately €400 million ($449 million) enterprise value, €140 million ($157.2 million) of which is in debt.

Upon closing, EGP and INPEX are expected to jointly control EGPA, overseeing the company’s renewable generation portfolio and continuing to develop its project pipeline of wind, solar, storage and hybrid projects.

The overall transaction is expected to generate a positive impact of €87 million ($97.7 million) on the 2023 Group’s ordinary and reported EBITDA.

Moreover, the deal is expected to generate a positive effect on the Group’s consolidated net debt of approximately €145 million ($162.8 million).

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The sale marks the latest from the Enel Group to consolidate its debt: October 2022 saw the Group divest 50% stake in US-based Gridspertise and launch a set of sustainability-linked bonds worth €4.1 billion ($4 billion); March this year saw them sell all equity stakes in its Romanian operations to Greece’s Public Power Corporation.

EGPA operates 3 plants totalling 310MW of installed gross capacity powered by solar as well as one 76MW wind project under construction and one 93MW solar project in execution.

EGPA is also developing a significant portfolio of wind, solar, storage and hybrid projects across Australia.

The sale marks a continued entry into the renewables scene for Inpex, a Tokyo headquartered oil and gas giant – the largest exploration and production company in Japan –  that has recently announced clean hydrogen and ammonia projects, which they claim as a first for Japan.

€5.6 billion for Copenhagen Infrastructure’s fifth fund

Copenhagen Infrastructure Partners (CIP) has reached first close on its fifth flagship fund – Copenhagen Infrastructure V (CI V) – at €5.6 billion ($6.3 billion) in capital commitments received.

According to the Danish CIP, which specialises in renewable infrastructure investments  – the commitment place CI V on path to reach its target of €12 billion ($13.4 billion), becoming what the company claims the “world’s largest dedicated greenfield renewable energy fund” they state in a press release.

A large group of institutional investors across continental Europe, the Nordics, the UK, North America and the Asia-Pacific region participated in the first close of CI V.

The investment strategy, states CIP, is a continuation of CIP’s predecessor flagship funds CI I, CI II, CI III, and CI IV, applying a repeated approach where projects are entered early and de-risked and optimised prior to the start of construction to capture an attractive greenfield premium.

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The fund will focus on greenfield investments – a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operations from the ground up.

CPI’s fund will focus on such investments specifically within large-scale renewable energy infrastructure.

According to CIP, the fund has a global reach and intends to diversify investments across technologies such as offshore & onshore wind, energy storage and solar in low-risk OECD countries in North America, Western Europe and Asia Pacific.

At this first close, the Fund has ownership of more than 40 renewable energy infrastructure projects with a total potential commitment of approximately €20 billion ($22.4 billion), corresponding to more than 150% of the target fund size.

#ICYMI: EIB boosts REPowerEU support package to €45 billion

The EIB’s Board of Directors has decided to raise the additional funds earmarked for projects aligned with REPowerEU – a plan designed to end Europe’s dependence on fossil-fuel imports – from the initial €30 billion ($33.5 billion) package announced in October 2022 to €45 billion ($50.2 billion).

The decision was made at the EIB Group’s July meeting in Luxembourg.

The new funding marks a fresh record for the Group, expanding its support to the build-up of manufacturing capacity for strategic net-zero technologies and products.

Projects eligible for financing include renewables, energy storage, grids and energy efficiency, as well as electric vehicle charging infrastructure – Read more.

Make sure to follow Smart Energy Finances for the latest in finance and investment news coming from the energy sector.

Cheers,
Yusuf Latief
Smart Energy International

Follow me on LinkedIn

Germany-based European Energy Exchange (EEX) has acquired Nasdaq’s European power trading and clearing business, subject to receipt of customary regulatory approvals.

The transaction to EEX will involve the transfer of existing open positions in Nasdaq Nordic, French and German power futures as well as European carbon emission allowance futures (EUAs) to EEX’s clearing house European Commodity Clearing (ECC).

No financial details of the deal have been disclosed.

Nasdaq Clearing AB, along with the clearing infrastructure to support it, is not part of the sale.

As part of the agreement with Nasdaq, EEX will update the current Nordic power market structure, replacing Electricity Price Area Differential (EPAD) contracts with zonal futures contracts.

Until the receipt of regulatory approvals, Nasdaq will continue to operate its European power trading and clearing business as usual.

Stated EEX on their website: “EEX is confident that overall liquidity in the Nordics can be improved by offering zonal futures, as the market will be accessible for a wide pool of pan-European power traders who can execute geographic trading strategies and capture cross-margining efficiencies. Nordic participants can also hedge using the existing Nordic System Price products offered by EEX.”

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Svenska’s EPADs

Responding to the announcement was Swedish TSO Svenska kraftnät, which has since February this year, they state, conducted auctioning of EPAD contracts corresponding to 10% of the Swedish grid’s capacity to transmit electricity between electricity price areas SE2, SE3 and SE4.

State the TSO: “The auctions are part of Svenska kraftnät’s pilot project, with the aim of supporting liquidity in the financial electricity market and [facilitating] the opportunities for market participants to hedge their production or consumption.”

The pilot, which runs in 2023 with a possible extension until 2024, can only auction EPAD contracts if they are traded on the financial electricity market.

One month prior – a Baltic acquisition

One month prior to the Nasdaq announcement, EEX Group acquired Gas exchange GET Baltic, which has become part of the Group.

The deal was signed between EEX and Lithuania’s gas TSO Amber Grid, under which EEX will take 66% of the shares in the regional gas exchange GET Baltic.

As a result, the gas exchange operating in the three Baltic countries and Finland will become part of EEX Group. Amber Grid will hold the remaining 34% of the shares and will continue to support the further development of the gas business in the dynamic Baltic Sea region.

The short-term and long-term contracts of GET Baltic will be offered under EEX’s German exchange license, making use of the EEX trading infrastructure- and clearing services provided by the ECC.

Once admitted at EEX, the GET Baltic Trading Participants will be able to trade not only the current spot and futures contracts but also other hubs and asset classes offered by EEX.

Said EEX CEO Peter Reitz: “We aim to create a harmonised European gas trading platform based on EEX’s trading infrastructure. The acquisition of the majority shares in GET Baltic extends EEX Group’s offering for the pan-European gas markets as well as our customer base. As a result, this creates new opportunities to increase liquidity in all gas markets operated by EEX and GET Baltic.”

GET Baltic is a significant market player in the region; in 2022, a volume of 7TWh of natural gas was traded on the GET Baltic exchange.

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A Floridian energy exchange

Other trading news was spotted across the sea in Florida.

A week after the EEX’s Nasdaq acquisition, and seperate from their Western Europe Expansion, the Southeast Energy Exchange Market (SEEM) initiated trading with four new Florida energy companies added to their roster, including Duke Energy Florida, JEA, Tampa Electric Company and Gainesville Regional Utilities.

The platform allows the US utility companies to buy and sell power through the SEEM platform., which launched operations supporting enhanced energy trading in November 2022. The initial announcement was made in October.

Duke Energy Florida, JEA and Tampa Electric Company have joined as members, whereas Gainesville Regional Utilities, will be a non-member participant.

Members have a seat on the SEEM Board and related committees and pay all operational, audit, administrative and legal expenses, which allows non-Members to participate in SEEM at no cost.

“Adding new Participants creates more opportunity for everyone in the market, enabling more matches,” said Nelson Peeler, SEEM board chair and senior vice president of transmission and fuels strategy and policy at Duke Energy.

“Expanding the SEEM footprint into Florida will also create more market diversity empowered by zero-cost transmission and further facilitate solar and renewables integration.”

During the first seven months of operation, there have been more than 45,000 transactions representing more than 1TW of power transacted across all participants including transactions in 73% of all hours since market launch.

The SEEM platform facilitates automated, sub-hourly trading, allowing participants to buy and sell power close to the time the energy is consumed, utilising available unreserved transmission.

The SEEM footprint includes 23 entities in parts of 12 US states with more than 180,000MWs during summer (winter capacity is nearly 200,000MWs) across two time zones.

For the latest finance and investment announcements coming from the energy industry, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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Also on the radar are an €8 billion credit facility for Dutch-German TSO TenneT, which is in the middle of potentially a full operations sale to the German government, and an equity financing round for tech startup 1KOMMA5°, which now boasts unicorn status.

Troubled waters for UK’s biggest water utility

UK ministers and water regulator Ofwat have started discussions about the possibility of placing Thames Water, the country’s largest water utility, into a special administration regime, according to Sky News reportage.

The talks, which involve the Department for Environment, Food and Rural Affairs (DEFRA), Ofwat and the Treasury, remain at a preliminary stage and relate at the moment only to contingency plans, which may not need to be activated.

Under the regime, Thames Water would be placed into temporary public ownership, parallel to the situation with Bulb Energy after collapsing. The electric utility has since been acquired by competitor Octopus Energy.

Earlier this week, Thames Water’s CEO Sarah Bentley announced her resignation with immediate effect, less than three years after starting in September 2020.

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Earlier this year, the utility reportedly hired investment bank Rothschild and international law firm Slaughter and May under pressure of managing a £14 billion ($17.7 billion) debt pile.

On Thursday, Ofwat released an official statement on the matter, claiming that although Thames Water has had significant issues to address, including its environmental record, leakage performance and financial resilience, their liquidity yet proves a strength.

“…that is all in the context of a company that has strong liquidity – [Thames Water]  recently received £500 million ($630 million) from shareholders and has £4.4 billion ($5.5 billion) of cash and committed funding,” stated an Ofwat spokesperson.

Thames Water serves 15 million customers in London and the Thames Valley.

TenneT’s pre-sale €8 billion credit facility

Dutch-German utility TenneT has announced signing of an €8 billion ($8.7 billion) credit facility, as it continues to mull over the sale of its operations to the German government.

The potential sale was announced earlier this year in February, at which stage the TSO’s financing needs approximated  €15 billion ($16 billion). State funding, they claimed, was being considered a prime structural solution.

TenneT currently operates the Dutch high voltage grid as well as part of the German high voltage grid, although they have stated that both the Dutch and German governments prefer to fund, control and own their national electricity grid.

In announcing the credit facility, the utility stated that “such [a] potential transaction would enable the creation of two strong national players, controlled and funded by their respective governments, and cooperating in driving the energy transition.”

The credit facility, which has a tenor of 2.5 years, is hailed by TenneT as one of the largest single tier ticket credit facilities in Europe since 2020.

The facility is provided by TenneT’s existing relationship banks, namely BNP Paribas (Bookrunner), ABN AMRO, BNG, Commerzbank, Deutsche Bank, ING, Rabobank, Santander, SMBC and UniCredit as mandated lead arranger.

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Tech startup raises €215 million; becomes unicorn

Hamburg-based tech startup 1KOMMA5°, after raising €215 million ($233.5 million) in equity, has reached €1 billion market valuation ($1.1 billion).

The funding round saw US tech investor G2VP as lead investor and a new shareholder for the newly-minted unicorn company.

The 23-month-old startup, which focuses on emobility, storage and solar solutions, stated the funds surpassed their goals of €150 million ($162.9 million) as they look to open a new R&D site in Berlin.

The company has been looking to expand its portfolio of smart solutions, namely an energy management and virtual power plant solution centred around Heartbeat, their energy IoT system.

Stated the company in a press release: “We have also set aside an additional €215 million euros in re-participation options, which can be paid as part of the purchase price for new acquisitions.

“This enables us to invest up to €430 million ($470 million) in total into the vertical integration of the value chain and double down on tech development around Heartbeat and our virtual power plant.”

The raised equity and unicorn status was announced at the same time as their acquisition of Danish solar tech provider Viasol.

With operations and employees in Germany, Sweden, Finland, Italy and Australia, the acquisition expanded their reach into a sixth market, Denmark, and enables the integration of Viasol’s frequency optimisation algorithm in Heartbeat, enabling dynamic tariffs and frequency regulation for Danish customers.

For the latest in finance and investment news coming out of the energy industry, make sure to follow Smart Energy Finances Weekly.

Cheers,
Yusuf Latief
Content Producer, Smart Energy International

Follow me on LinkedIn