The grid edge has a lot of moving parts to keep up with, requiring an unprecedented level of cooperation. While utilities and DER providers are often in conflict about the best policies to manage this transition, incumbent power providers are also one of the key investors making this transition possible.
Energy Impact Partners investment watch: Greenlots
One of the biggest utility investment consortiums out there is Energy Impact Partners, the international utility investment fund that’s made big investments in grid edge companies such as Advanced Microgrid Solutions, Sense, Opus One, FirstFuel and AutoGrid. Last week, EIP took its first stake in the electric-vehicle charging ecosystem, in the form of an undisclosed round in Los Angeles-based startup Greenlots.
Greenlots has distinguished itself from its chief pure-play EV charging infrastructure competitor, ChargePoint, by offering what it says is a more open technology stack for controlling lots of chargers and plugged-in vehicles. It’s a big proponent of Open Charge Point Protocol, one of the primary standards being developed on this front.
“Site hosts, utilities, and other third parties have to have the flexibility to scale their infrastructure as use cases change. Being locked into a proprietary system is not a good thing for individual companies or for the industry,” Greenlots CEO Brett Hauser told me in an interview last week.
Greenlots’ technology now supports DC charging systems across the country in partnership with Nissan and BMW, he said, as well as projects in Hawaii, Canada, and more recently, Singapore. Greenlots has also worked for some time with Pacific Northwest utility and EIP member Avista, giving the consortium experience with its technology.
“We really need a truly open structure,” EIP CEO Hans Kobler said, one that “has the flexibility to deploy truly hardware-independently.” He declined to characterize the size of EIP’s investment in Greenlots, beyond calling it a “very meaningful stake.”
Among EIP’s 16 member utilities, “literally the top sector of interest is EV charging and infrastructure,” he added. “Number one, there’s the upside for creating more demand for electrons. There’s doing something good for the environment. There’s creating a revenue opportunity for them to expand their business. And there’s the downside -- if it’s done in an uncontrolled, uncoordinated fashion -- that it can put a huge strain on the T&D system. These chargers are enormous. If you put out DC fast-charging a year from now, it’s going to be megawatts floating up and down.”
Enbala wins funds from Walton family office focused on energy and water
A Vancouver, B.C.-based startup landed an undisclosed investment this week -- not from a utility partner, but from one of the country’s wealthiest families. Enbala Power Networks announced this week that it closed its $17.5 million Series B round with an investment from Zoma Capital, the investment arm for the family office of Ben and Lucy Ana Walton.
Enbala aggregates large commercial and industrial loads to serve grid needs, starting with big deployments in the Northeast U.S. and Canada, and expanding in more recent years to working with utilities, energy services providers and grid equipment and software giants.
Ben Walton is the grandson of Walmart founder Sam Walton, and is a long-time philanthropist focused on his home state of Colorado and the country of his wife’s birth, Chile. Zoma Capital combines this geographic focus with an interest in “energy, water and community development.”
To date, Zoma has made only two publicly disclosed investments -- its stake in Enbala, and an investment in Pescador Holdings, a sustainable seafood venture in Chile. It’s not clear yet how much Zoma invested in Enbala, which reported in February that it had raised $14 million in its Series B round.
GTM Research analyst Paulina Tarrant noted that it’s a little unclear how much Zoma Capital invested, since Enbala's SEC filing following its February press release shows $16.7 million, and Enbala hasn’t made an amended SEC filing regarding its close.
The Walton family was an early and consistent investor in First Solar, reportedly putting $150 million into the thin-film solar company through True North Venture Partners, the investment fund co-founded by First Solar CEO Michael Ahearn and John Walton, the son of Sam Walton. It remains to be seen how the Enbala-Zoma Capital relationship will play out.
Earnings roundup: Itron beats and SolarEdge exceeds
Itron, the smart metering giant that’s seeking to become a broader grid edge player, appears to be hitting its stride after years of restructuring, according to analysts covering its second-quarter earnings report this week. The company reported revenues of $503 million and non-GAAP earnings per share of 71 cents, beating Wall Street expectations on both counts.
So far this year, Itron appears to be showing that its “momentum is sustainable, its operations are becoming leaner and more efficient, and that it has been turning itself into a high-credibility execution story,” Sean Hannan, smart grid analyst with Needham & Company, wrote in a research note.
Itron’s electricity sector led the quarter’s growth, including its OpenWay Riva platform, which puts modern distributed computing capabilities into its meters and a variety of grid edge endpoints. Jeffrey Osborne, senior alternative energy analyst at Cowen, noted that 18 customers of Itron are now using the next-gen platform, with 10 more customers to receive shipments in the second half of this year.
“As metering companies increasingly branch out into sensor and software, we see Riva becoming a greater focus over time,” he wrote in a research note.
The second-quarter figures also showed the effects of Itron’s acquisition of demand response company Comverge for $100 million, which contributed $5 million of distributed energy management revenue for Itron’s electricity segment and a net loss of $2 million, including acquisition and integration-related expenses.
Also this week, microinverter maker SolarEdge reported a record second quarter, with revenues of $136.1 million and non-GAAP earnings per share of 55 cents. These results exceeded Wall Street estimates of $125 million and 38 cents, respectively. The results were largely driven by growth in sales outside its core U.S. market, particularly in Europe, while the Israel-based company's standardization on its core HD-wave residential product.
SolarEdge also unveiled its next-generation power optimizer, a large capacity commercial inverter and a first-of-a-kind PV inverter-integrated EV electric-vehicle charger in the quarter.
SolarEdge’s competitive posture is enhanced by the relative “distress” of its chief rival Enphase, Cowen’s Osborne noted. Enphase’s struggles have been well documented by Greentech Media’s recently departed editor Eric Wesoff. And while the company has unveiled some interesting new products lately, it’s also running low on cash. Stay tuned for more Enphase info next week during its second-quarter earnings call.
Also reporting this week was battery maker Electrovaya, with third-quarter revenues of $4.4 million, up 70 percent from the same period last year, as well as a loss of $6.3 million. Over that time, it bled $1 million in cash for a total of $1.7 million as of June 30, while inventory shrank from $16.7 million to $13.7 million -- not a good sign.
On a slightly related topic, Aclara continued its acquisition of General Electric’s metering business this week, assuming a majority equity position in GE Philippines Meter & Instrument, its joint venture with Manila Electric Company, the largest electric distribution company in the Philippines. GE is still working elsewhere in the Philippines, as evidenced by this week’s announcement of a 500-kilovolt transmission line and substation project with the country’s grid provider.
Feel the Illinoise: Ameren’s microgrid moves ahead, Whisker Labs lands ComEd/Nicor pilot
Schneider Electric announced a new microgrid customer this week -- Illinois utility Ameren. Ameren will use Schneider's EcoStruxure Microgrid Advisor software to manage a 1.5-megawatt mix of natural-gas generators, solar panels, wind turbines and and batteries at its $5 million microgrid in Champaign.
The project, featuring switchgear, controls and grid-ready battery systems from S&C Electric, is one of the only U.S. utility-scale microgrids that can serve paying customers on a utility distribution feeder at utility-scale voltages, between 4 kilovolts and 34.5 kilovolts, as distinct from lower voltages from behind-the-meter DERs.
Ameren also claims it as the “only known microgrid in the nation capable of seamlessly transitioning the power source for an entire distribution circuit from exclusively distributed generation sources to the traditional power grid.” (Note to readers: While Duke Energy’s McAlpine Substation pilot project does connect and island a single fire station and solar-battery array at the distribution level, it’s to a substation directly next to the property, which doesn’t really count as an “entire distribution circuit.”)
Schneider has been offering a microgrid-as-a-service business for the past few years, with Duke Energy as its first partner at a proof-of-concept Boston campus microgrid and, more recently, a public safety complex in Montgomery County, Maryland.
Illinois' other big utilities also announced a new partner -- Whisker Labs, the home energy monitoring startup bought by Earth Networks last year. Under the residential demand response pilot project announced this week, Whisker will enroll 3,000 customers of ComEd and Nicor Gas who already have a Honeywell Wi-Fi thermostat installed in their home.
Whisker is one of several startups promising to collect “hyper-local” weather, building, demographic and energy usage data to build thermodynamic models of individual homes, and run it through algorithms that can fine-tune thermostats to shave energy during hours of peak grid demand without affecting customer comfort. ComEd has a broader program offering rebates on products from Nest, ecobee and other smart thermostat vendors.
New York’s Con Edison gets the green light for low-income solar plan
Community solar is a general term with a lot of different meanings, depending on which state you’re looking at. In New York, utility Con Edison won state regulator approval this week for the initial stage of its own take on the concept -- 3 megawatts of solar PV installed on utility-owned rooftops, generating power for up to 1,600 customers that could reduce their energy bills by $60 a year.
Con Edison’s shared solar plan has faced opposition from independent power generators claiming that its 3-megawatt solar project equates to unfair competition, and community groups, claiming the utility hasn’t been transparent enough in terms of community participation and expected rates of return on the project.
But the New York Public Service Commission allowed the pilot to proceed as part of the state’s broader Reforming the Energy Vision initiative. Con Edison’s five-year plan could increase its shared solar to 11 megawatts serving up to 6,000 residential customers.
California seeks better green energy procurement
California is the epicenter of grid edge policy developments and technology combinations -- and it’s not done looking for new ways to prime the pump. This week, the California Energy Commission started accepting applications for a new $33 million grant funding opportunity “focused on the derisking of clean energy procurement processes” for a diverse set of customers including schools, hospitals, data centers, ports, military bases and state and local governments.
The new program is divided into four areas: a voucher program for clean energy entrepreneurs to use test bed facilities to bridge the gap from lab to pilot; a new California Energy Product Evaluation Hub to be that test bed; a group to provide “key services, assistance, and resources” for the parties involved; and “software programs, online platforms, and business model innovations that can streamline the procurement process, aggregate purchases across multiple customers, help develop equipment specifications that can be used by agencies to procure bids for emerging clean energy technologies.”
Reports and forecasts
In utility M&A, it’s all about the mega-deals. So shows PwC’s second-quarter 2017 North American power and utilities deal insight report, which tallied $6.5 billion in deal volume -- a big drop from the first three months of 2017 and the second quarter of last year. That’s largely because of a dearth of billion-dollar-plus deals. Compared with four in the same quarter last year and two in the first quarter of this year, the second quarter only had one -- Eversource’s purchase of Aquarion from Macquarie Utilities for $1.7 billion.
AWEA’s new U.S. Wind Industry Second Quarter 2017 Market Report shows 29 wind projects, representing a combined 3,841 megawatts, started in the past three months, bringing the country’s under-construction total to nearly 26,000 megawatts, or up 40 percent from the same quarter last year. Other highlights included six major commercial and industrial customers buying U.S. wind power for the first time, including Apple and General Mills, and two offshore wind projects that were awarded Maryland offshore renewable energy credits.
And Navigant Research cast a large net for its global turnkey energy-as-a-service solutions market forecast and came up with a big number -- $221 billion by 2026. This is based on examining the potential for “large Fortune 500 equivalent C&I customers” to leverage new energy technology and utility business model disruption to take much more of their energy destiny into their own hands.
