Meg Cichon
The renewable energy market has been slowly strengthening ties with energy storage, and it now seems to be tying a secure knot. Wind and solar developer SunEdison (SUNE)announced today that it bought the energy storage team, projects and
100-MW pipeline of Pennsylvania-based Solar Grid Storage (SGS).
SunEdison is now able to offer integrated battery storage
solutions for its renewable energy project portfolio, and delve
into an energy storage market that is set to grow 250 percent in
2015, according to a new report from the Energy Storage
Association and GTM Research. The solar plus battery storage
market alone is set to reach 1 billion by 2018.
"Storage is a perfect complement to our business model and to our
wind and solar expertise," said General Manager of SunEdison
Advanced Solutions Tim Derrick in a statement. "Our strategy is to
increase the value of the solar and wind projects that we finance,
develop, own, and operate by improving their availability and
ability to interact with the grid. With this acquisition we have
added the capability to pair energy storage with solar and wind
projects, thereby creating more valuable projects and positioning
ourselves as a leader in the rapidly growing energy storage
market."
Solar Grid Storage saw market opportunity a few years ago when electric vehicle interest started improving battery technology and driving prices down, according to CEO Tom
Leyden. It was also a time when significant weather events like
Hurricane Sandy caused power outages, sparking greater interest in
renewables and emergency power.
"A lot of things have moved in our direction, and because of the
success in solar and wind, utilities are raising concerns about
grid stability," explained Leyden. "So there is a lot of interest
in storage on a regulatory basis to create grid resiliency, an
many companies and individuals want emergency backup."
Solar Grid Storage offers an integrated inverter plus lithium-ion
battery storage system that works best for commercial projects
ranging from 150 kilowatts to 10 megawatts, along with valuable
grid ancillary services. They are focused on the east coast, where
they have a contract with grid operator PJM to establish and
operate battery storage to help balance the grid. This contract
creates a revenue stream, and allows SGS to go into solar and
storage projects, according to Leyden. It currently has four
completed projects in its portfolio, with several more in the
pipeline.
While their focus has mostly been in the PJM territory,
SunEdison's wide U.S. and global reach will open new doors for the
storage technology. "To grow we needed additional capital, so
SunEdison decided to acquire us - they have a strong balance sheet
and attractive financing, which are all good things for us," said
Leyden.
SunEdison has been in expansion mode for the past year or so. In
February 2014, it established a yieldco called TerraForm Power
(TERP).
This yieldco model allows SunEdison to raise capital by selling
its projects to TerraForm and then using the proceeds to purchase
additional projects and pay investors. Since yieldcos have very
strict criteria, SGS won't be able to qualify just yet due to a
lack of contracted revenue, but it hopes to rectify that by the
end of the year, said Leyden.
Back in November, SunEdison and TerraForm announced the 2.4 billion acquisition of wind developer First Wind and its 1.3-GW portfolio, making
SunEdison the largest renewable energy developer in the world. It
also announced plans for a possible 2 billion polysilicon plant in China, a 30 million module plant in Brazil, and a 4 billion module plant in India to help along its more than 5 GW of potential projects in the
region.
For now, Leyden said that SGS will focus on ramping up in the PJM
market and moving into California, where there is storage procurement in place. Said Leyden,
"Those are our two initial focuses, but we do want to expand
beyond that - and we intend to - but it will take some time."
Meg Cichon is an Associate Editor at RenewableEnergyWorld.com,
where she coordinates and edits feature stories, contributed
articles, news stories, opinion pieces and blogs. She also
researches and writes content for RenewableEnergyWorld.com and REW
magazine, and manages REW.com social media. Formerly, she
was an Associate Editor of ideaLaunch in Boston, MA. She holds a
BA in English from the University of Massachusetts and a
certificate in Professional Communications: Writing from Emerson
College.
This article was first
published on RenewableEnergyWorld.com, and is republished
with permission.