Green Charge Networks Plans Global Energy Storage Expansion After Engie Deal

French electric utility Engie has taken an 80 percent stake in behind-the-meter smart energy storage firm Green Charge Networks, the companies announced last week. The deal will help accelerate Green Charge’s global expansion plans, CEO Vic Shao tells CleanTechIQ.

And the acquisition gives Engie a “strong position in the growing battery storage market in the U.S. and further develops its offering of load management solutions at customer sites,” Frank Demaille, president and CEO of the North American business unit of Engie, says in a statement.

Green Charge’s systems combine lithium ion batteries with software to manage power usage. The company uses a shared savings model, called a Power Efficiency Agreement, in which it covers the upfront capital and installation costs of its system, and then shares in the resulting energy savings with its customers over the next 10 years. Green Charge, based in Santa Clara, Calif., has a portfolio of 48 MWh of battery storage projects either deployed or under construction across more than 150 sites.

Related Content

Shao says the Engie investment will accelerate the company’s growth strategy for deploying its distributed energy storage, because its PEA model is now “fully vetted by the largest IPP [independent power producer] in the world.”

According to Navigant Research, worldwide capacity of distributed energy storage will grow from 276 MW in 2015 to nearly 2,400 MW by 2018.

Now that it’s paired with Engie, Green Charge is developing a “much more expansive plan,” Shao says, adding that he anticipates deploying hundreds of megawatts of distributed energy storage over the next several years. And these projects are driving a “healthy appetite” for project finance from Engie and outside investors, he says.

Green Charge was founded in 2009 with $12 million in stimulus money from the U.S. Department of Energy. It has not taken institutional venture capital investments, though it did take angel funding in late 2013 from Richard Lowenthal, founder and CTO of car charging network ChargePoint, as CleanTechIQ reported. Green Charge’s software offers predictive analytics using utility and weather data to manage peak power use and store energy accordingly. The software analyzes a year’s worth of a potential host customer’s meter data in 15-minute intervals, in order to estimate its monthly savings.

Engie, formerly known as GDF Suez, is a multinational electric utility with operations in 70 countries and all 50 states in the U.S. Recent Engie investments include Tendril, Street Light Data and Advanced Microgrid Solutions; it also acquired OpTerra Energy Services in February

Engie’s scale, Shao says, provides Green Charge with plenty of opportunity to introduce energy storage into projects, both domestically and abroad. In fact, Green Charge signed its first deal in Asia deal last month, with details to be announced soon.

As part of its strategy, the company raises project finance capital from investors to fund the installation of its systems so it can offer no-money-down financing packages to corporate prospects. Green Charge’s corporate client list includes 7-Eleven, Walgreens, UPS and Kaiser Permanente.

The company is raising non-recourse debt project financing that provides “solar like” returns to its investors, Shao says. (Editor’s note: some project developers say they are generating annual returns of 10% to 12% for distributed solar Power Purchase Agreement projects with relatively low risk.) 

In fact, in January, Green Charge raised $20 million of non-recourse debt for planned projects, plus an additional $30 million awaiting new projects in 2016, from Ares Capital Corp. It also raised $56 million in equity project finance capital from K Road Capital and $10 million in debt financing from TIP Capital in 2014.

And with Green Charge’s proven financing model, which includes project performance guarantees, and now its recent “vetting” by Engie, Shao expects that it can direct some of the “trillions of dollars” of institutional investor capital into its projects that “do good for the world” as well as generate strong returns.

In anticipation of raising more project finance capital, the company hired a Chief Financial Officer last month, a new position at the firm.

Growth drivers of distributed storage include the pairing of solar with storage in projects, which is now gaining traction across the U.S. due to the extension of the Solar Investment Tax Credit (ITC), Shao says. Green Charge developed partnerships with Duke Energy and SunEdison last year to incorporate energy storage in solar projects, and they are actively partnering with other solar developers.

Also driving distributed storage adoption is the proliferation of EV charging infrastructure, an area Green Charge has been investing in since its early days. Shao says there is now a big push to improve EV charging infrastructure across the U.S. to meet strong customer demand. That creates a big opportunity to incorporate energy storage in these projects that will help drive down the cost of EV charging, he says.

One of Green Charge’s competitors in the smart distributed energy storage space is Stem Inc., which was founded in 2009 and closed on a $100 million project finance round in 2014 to finance its systems for commercial and industrial customers. Stem’s contracts with customers take the form of lease payments, similar to how rooftop solar panels are sold, rather than the shared savings model that Green Charge Networks employs. Stem has also seen a lot of interest by venture capitalists, having raised more than $67 million in venture capital funding to date, with its latest funding round, a $45 million Series C round led by Germany-based RWE Group, in August 2015.

To read more about adoption trends in distributed energy storage, see our briefing titled Emerging Opportunities in Distributed Energy Storage Systems.

Post Comment

Your email address will not be published. Required fields are marked *

Featured News Topics