recent investments & maneuvers
Distributed Energy Resources (DER) are shaking up the status quo, opening the door to many new innovations and value creation opportunities.
Innovation is slow for heavily-regulated utility companies that are insulated from competitive disruption. While some energy utility devices were among the first smart “things” in the world, much of the adoption of new technologies has been limited to incremental improvements to operations. For example, smart meter adoption is widespread, helping provide granular insight into energy usage, but these do little to create new value beyond visibility and control. Smart transmission and distribution substations help utility companies manage demand and avoid costly, dangerous and widespread blackouts, but this is more of an attempt to create service efficiencies than to create new value for customers.
At the same time, the energy usage landscape is changing. As both energy and oil and gas companies try to keep up with the increasingly imminent shift to electric vehicles, Distributed Energy Resources (DERs) are shaking up the status quo, opening the door to many new innovations and market participants where previously there has been very little competition. There are many opportunities for new services and solutions to support utilities, from system integration and coordination to more distributed and mission critical assets requiring attention and support.
Who will capture these new opportunities is still largely undecided, but there’s a lot of value available to those that are able to organize effectively.
In prep for DistribuTECH & PowerGen International next week, we’re highlighting recent acquisitions, investments, partnerships and innovations in distributed energy. These examples demonstrate some shifts in the energy landscape, and highlight multiple opportunities for further disruption in the near future.
Diamondback Energy: acquired Rattler Midstream for $2.2 billion
Diamondback Energy will acquire Rattler Midstream LP’s publicly held shares for $2.2 billion. Rattler Midstream was created as a subsidiary of Texas-based Diamondback Energy. The merger is expected to close in the third quarter of 2022.
Sensata Technologies: acquired Dynapower Company for $580 million
Sensata Technologies, an industrial sensor and insight solution provider, has acquired Dynapower Company, an energy storage and power conversion system provider, from private equity firm Pfingsten Partners for $580 million in cash. Dynapower is expected to generate over $100 million in annualized revenue in 2022 and the acquisition will help align Sensata Technologies with a resilient clean energy future.
The Intellihub Group: acquired GreenSync
The Intellihub Group, a smart metering and data company, has acquired GreenSync, an energy tech specialist with digital automation and control solutions. The acquisition will help power Australia and New Zealand’s push toward green energy.
SinglePoint, Inc: acquired The Boston Solar Company
SinglePoint, Inc., a renewable energy and sustainable solutions provider, has acquired The Boston Solar Company, a solar installer based in Massachusetts. Boston Solar is projected to have revenues of at least $25m in 2022. Solar energy accounted for 46% of all new electricity generated in 2021 and the market is expected to grow at 10% CAGR over the next 5 years as per the latest report by Technavio.
Stem: acquired AlsoEnergy for $3.15 billion
Stem Inc., a leader in AI energy software and servicesa, has acquired Also Energy Holdings Inc., a solar performance monitoring platform. This help to position Stem as a leader in solar energy. AlsoEnergy generated $49 million in revenue in 2020.
Chevron: acquired Renerwable Energy Group for $3.15 billion
Chevron is purchasing Renewable Energy Group for $3.15 billion. Renewable Energy Group produces biodiesal from renewable resources. This acquisition is a bold move toward green innovation for Chevron, who has lagged behind BP and Shell in terms of alternative fuel investments.
BP & Linde: launch carbon capture project
BP and Linde have announced a partnership to launch a carbon capture and storage project in Houston, Texas. The project looks to advance decarbonization efforts and enable low carbon hydrogen production and Linde facilities. The project also aims to store up to 15 million metric tons of carbon dioxide from other industrial facilities each year. Both BP and Linde have committed to reaching carbon neutrality by 2050.
United Illuminating Company & Bidgely: EV charging infrastructure project
The United Illuminating Company (UI), a subsidiary of Avangrid, has announced a partnership with Bidgely to develop an electric vehicle (EV) charging infrastructure for the state of connecticut. The project aims to support 125,000-150,000 EVs on roads by 2025. UI will remotely manage electric vehicle charging to optimize the grid for consumers who opt in.
U.S. Dept. of Energy: launched $2.3 billion fund
The U.S. Department of Energy will support power grid resiliency through a $2.3 billion fund. The “Building a Better Grid” fund will support modernizing the grid and building enhanced capacity battery storage and microgrids. The fund illustrates the push from governments worldwide toward lowering carbon footprints, as well as creating power grids resilient to extreme weather and cyber attacks.
Energy Impact Partners: announced $350 million fund
Earlier this year, Energy Impact Partners (EIP) announced a $350 million fund, called the “Frontier Fund,” to invest in innovative climate technologies. This is just a fraction of the more than $2 billion EIP has invested across 75 startups and platforms that advance zero-carbon economy such as supply decarbonization, electrification, mobility, tech-enabled infrastructure, reliability, resilience and intelligent demand.
E.ON Next: launched UK tariff
E.ON Next has launched two tariffs to help promote clean energy and EV usage across the United Kingdom. The effort will help move customers to 100% renewable energy sources.
ConEdison: launched ConnectDER
ConEdison has launched a smart metering program to connect customers’ rooftop solar systems using hardware from ConnectDER. ConnectDER serves as a cost-effective connection point avoiding costly circuit-breaker upgrades and wiring. This launch follows a 300-unit pilot in 2017 which revealed $400 – $1,500 in savings per installation.
The Value Chain of Energy Systems Is Undergoing Profound Transformation
source: Harbor Research
So should you build, buy, partner, fund or innovate?
Volatile energy prices, painful strain on infrastructure, rapidly growing use of renewable energy sources and concern for the environment are creating the need for a transformed power system. The required technology to improve power generation, distribution, and usage through the enabling of a smarter and more interoperable power grid is available, but requires a new more distributed and interoperable architecture.
There are myriad opportunities for value creation for those looking to actively build the DER ecosystem. Simply acquiring an innovator is not enough. As you look to drive value, consider a combination of acquisitions, partnerships, investments and innovation.
Read more about Distributed Energy Resources here. ◆