Smart Energy Finances: Load shifting in the limelight
This week’s edition of Smart Energy Finances sees three load shifting investments take centre stage as demand response becomes a more notable priority for utilities the world over.
Also on the radar is the acquisition of smart metering company MapleCo by energy company Calisen Group, illustrating their continued investment into the energy space and efforts to expand their utility offerings.
$120 million for Swell Energy’s VPP suite
Swell Energy has raised $120 million to further its VPP programmes. The funding round was led by SoftBank Vision Fund 2 and Greenbacker Development Opportunities Fund I, LP, with participation from an Ares Infrastructure Opportunities fund and Ontario Power Generation Pension Fund.
The funding will support Swell’s development of 600MWh of VPPs through the deployment and aggregation of 26,000 energy storage systems located at homes and businesses across the US.
The financing round brings Swell’s total equity capitalisation to date to $152 million, including prior investments made by an Ares Infrastructure Opportunities fund, Aligned Climate Capital, Third Sphere, and others. Citi acted as sole placement agent on this transaction.
Swell VPPs provide grid service capabilities through projects in utility territories across Hawaii, California and New York, aiding utilities with delivering cleaner energy to customers and reducing the grid’s dependence on fossil fuel peaker plants.
Swell creates VPPs by linking utilities, customers and third-party service providers together, as well as by aggregating distributed energy resources through their GridAmp software platform.
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And in regions where local grids must evolve to accommodate more renewable energy and electric vehicle adoption, Swell’s VPP programmes provide increased grid flexibility while precluding significant investment in new fossil fuel generation.
“Utilities and investors have understood the importance of virtual power plants for some time now; this funding further signals that the capital markets see tremendous value in this new asset class,” said Suleman Khan, CEO of Swell Energy.
For utilities, Swell increases the stock of dispatchable behind-the-meter assets, aggregates these assets for grid services participation, and dispatches distributed energy resources to create ongoing value for the grid, while creating an improved experience for the customer.
Swell analyses and identifies each region’s distinct utility needs and grid stresses, then delivers the appropriate grid services through flexible energy storage solutions, helping with load management, renewable energy balancing and ancillary grid services.
Businesses and homeowners participating in the programmes benefit from Swell’s VPPs by paying less for their solar energy generation and storage systems, potentially reducing the risk of a local power outage, and keeping their homes and businesses securely powered through any outages.
VCs double down on Sympower’s load shifting solution
After raising a €22 million ($22.7 million) investment round from five Venture Capital (VC) funds in mid-July, Sympower has raised an additional €3 million ($3.1 million) from investors to bring low carbon grid-balancing services to Europe.
The extension that the Amsterdam-based company received comes from the lead investor in the July round, Activate Capital, a growth equity firm supporting climate and sustainability pioneers, alongside Rubio Impact Ventures and PDENH.
The initial funding saw the VC firms invest €22 million alongside Expon Capital and Rockstart. Together, the five investors have collectively contributed €25 million ($25.8 million) to accelerate Sympower’s growth in 2022.
Additionally, after the initial raise, Sympower successfully partnered with Israeli Independent System Operator (ISO), Noga, to help system operators stabilise the country’s electricity grid during times of peak energy demand.
The new raise will assist the Amsterdam-based startup in transforming Europe’s electricity grid at a critical time. To mitigate the climate crisis and ensure energy independence, flexibility to adapt to renewable, distributed production is key.
Sympower adds flexibility with its software platform that currently provides almost 1GW of flexibility to energy grids across Europe. The funds will allow Sympower to serve more industrial and commercial customers across Europe, including demand-side loads, renewable energy production, electric vehicle charging and battery storage facilities.
Now with Greek balancing markets open, Sympower will use this additional funding to establish themselves in this growing market, along with other key countries across Europe including Italy, Poland, Hungary and the Czech Republic.
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Cummins’ minority stake removes load shifting upfront CAPEX from the equation
US tech developer Cummins Inc. has taken a minority stake in Exergy Energy, LLC, whose software coordinates electric load shifting.
The partnership will allow installation of Cummins power system solutions such as generator sets, energy storage systems and switching equipment at the customer location to power the operation during grid outages or times of peak usage with no upfront CAPEX investment by the customer.
Exergy Energy’s software monitors the grid and, during periods of peak usage, automatically shifts the loads to the backup power system before an outage or peak demand charges occur.
As owner of the asset, Exergy is responsible for the capital investment, service and maintenance and managing participation in grid programmes. Ancillary revenues are generated by participating in grid-sponsored programmes, such as demand response and synchronous reserves.
Exergy shares a portion of the cash flows generated from these programmes with its customers, thereby defraying part (or in some cases, all) of the costs associated with the programme.
And at the end of the contract, ownership of the backup power system is transferred to the customer.
Terms of the stake have not been disclosed.
Also of interest:
Octopus Energy’s smart meter scheme demonstrates 1GW load shift potential
New profiles to facilitate the roll-out of smart metering technologies worldwide
Calisen Group (Holdings) Limited has acquired smart metering company MapleCo from British investment group Equitix.
The transaction was supported by Calisen investors BlackRock Alternatives, Mubadala Investment Company and West Street Infrastructure Partners, which is a fund managed by Goldman Sachs Asset Management.
The acquisition forms part of the energy company’s strategy to extend its services to more UK energy retailers, reach more customers and explore opportunities in new sectors like EV charging and heat electrification.
The acquisition is being funded through an all stock consideration in the Calisen business. Existing shareholders will also sell down a minority secondary stake in Calisen to Equitix as part of the transaction.
Following the transaction, Sean Latus will be the CEO of the combined company and its headquarters will remain in Manchester, England.
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Cheers,
Yusuf Latief,
Content Producer, Smart Energy International
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