Utilities, Oil & Gas Companies Continue to Invest in Renewables
French electric utility Engie continued its investments in renewable energy with the October acquisition of Fenix International, a U.S.-based start-up that focuses on off-grid residential solar in Africa. In 2015, Fenix closed a $12.6 billion Series B funding round, raising money from Engie, Schneider Electric, and Orange France Telecom. Engie’s other recent acquisitions have included behind-the-meter smart energy storage firm Green Charge Networks and electric vehicle charging company EV-Box.
Engie North America and Holyoke Gas & Electric will build an energy storage system next to a 5.76MW solar farm in Massachusetts. The system will store electricity created at the Mt. Tom Solar plant, which started generating power in January. Engie subsidiary Green Charge Networks will operate the 3MW storage system. It’s said to be the largest utility-scale energy storage installation in Massachusetts.
German utility E.ON is taking a stake in smart metering software start-up Cuculus. The start-up’s IoT platform automates and coordinates solar PV systems, battery storage systems and electric vehicles.
E.ON has also acquired a stake in b.ventus, a start-up that installs and operates wind turbines for businesses that want to generate their own electricity. E.ON made the investment through its Agile unit, an incubator and accelerator that supports energy-related start-ups.
The venture capital fund of oil giant Royal Dutch Shell has opened its first office in China and will hire three local investment staffers as it makes more non-fossil fuel investments. Shell’s VC fund is looking to invest in start-ups focusing on areas like battery storage, smart mobility and solar generation for microgrids. That’s a sharp turnaround from the VC fund’s traditional focus on oil-related investments.
The Oil and Gas Climate Initiative, a group whose members include BP, Saudi Aramco, Shell and Total, has invested in Achates Power, a company that says it has a “radically improved” internal combustion engine that’s more fuel-efficient and also reduces greenhouse gas emissions, all at a lower cost. The OGCI’s $1 billion investment fund generally invests in areas like carbon-capture-and-store technologies, reducing methane gas leakages, and improved fuel efficiency.
Institutional Investor Demand for Sustainable Infrastructure Drives New Fundraising
Clean energy and resource innovation financing firm Generate Capital has completed a $200M fundraising round that will let the company expand its investments in battery storage and other distributed energy projects. The funding round was led by the $53B Alaska Permanent Fund, which was joined by other institutional investors and previous Generate backers. The company was cofounded in 2014 by Jigar Shah, who earlier founded SunEdison. (See CleanTechIQ’s sustainable infrastructure finance and fund analysis.)
As institutional investors like pensions and insurance companies look to invest in sustainable infrastructure projects, the New York Green Bank is now seeking at least $1B worth of private investments to finance clean energy projects in New York. The bank will also work with other states and entities to establish local green banks outside of New York. Working with third-party capital providers, the Green Bank has driven almost $1.4 billion in investment into the state and is the largest public/private clean energy finance entity of its kind in the nation, Gov. Andrew Cuomo says.
Venture capital investors Braemar Energy Ventures and Centrica Innovations have invested in LO3 Energy, a Brooklyn-based start-up that specializes in using blockchain for energy transactions. LO3’s platform is intended to make it easier for people to buy and sell solar power; founder and CEO Lawrence Orsini says blockchain is the “key to unlocking the real potential of distributed generation.” Braemar makes early- to mid-stage investments in energy technology, while Centrica Innovations is a unit of British utility Centrica. (See CleanTechIQ’s analysis of microgrid project financing and business models.)
Separately, Centrica announced in early November that it’s buying Antwerp-based REstore, whose software works to control the energy demand of its 150 commercial and industrial customers across the UK, Germany, France and Belgium.
The Dubai Green Fund raised about $650M to invest in sustainability projects. The fund, a unit of the Dubai Electricity and Water Authority, intends to raise about $26B overall. It was created in 2016 and makes low-interest loans to clean energy companies, and also makes direct investments in cleantech and related projects. The fund’s main investors are the Investment Corporation of Dubai and a program run by Dubai’s sovereign wealth fund, though officials say they’re seeing interest from investors in Europe and Asia, including a state-owned bank in China.
The UN Environment Program and Rabobank have formed a $1B fund that will offer loans and grants to companies that invest in sustainable agriculture. The program, called Kickstart Food, will start with projects in Indonesia and Brazil. In Indonesia, it will focus on forest and biodiversity protection, while in Brazil it will promote and finance integrated crop, livestock and forestry farming practices on some 17 million hectares of farmland.
Traditional infrastructure players and institutional investors are starting to move into renewable energy investments. One example is Global Infrastructure Partners, the lead investor in a $3.7B deal to buy Equis Energy, Asia’s largest independent renewable energy firm. Other investors include the China Investment Corp. and Canada’s’ Public Sector Pension Investment Board. Equis, based in Singapore, is the largest renewable energy producer in the Asia-Pacific region, with more than 180 solar, wind and hydro projects.
Private equity firm TPG raised $2B for its new impact investing fund, well above its $1.5B target. That makes the Rise Fund the largest impact investment fund. Institutional investors in Rise include the New York State Common Retirement Fund, the Washington State Investment Board and Swedish pension fund Andra AP-fonden. Bank of America also invested, and UBS raised money for the fund through its high-net-worth advisors.
(Please contact us at info@cleantechiq if you are interested in accessing CleanTechIQ’s proprietary database of ESG and sustainable investment mandates by institutional investors, private wealth and other capital sources.)
Advances in Microgrids and Energy Storage
In Singapore, a new milestone has been reached in the development of test microgrids intended to help companies learn how best to bring electricity to isolated regions like island communities across Southeast Asia. Nanyang Technological University is overseeing the development of the Renewable Energy Integration Demonstrator (Reids), a series of microgrids on a small island just south of Singapore, working with private companies like Engie, Schneider Electric and General Electric Grid Solutions. So far the microgrids include PV panels, lithium-ion batteries, a hydrogen refueling station, and the latest addition, a 14-story-tall, 100 kilowatt wind turbine. The turbine was specially designed to be transported via standard shipping containers, and to be easy to install; it can even be temporarily taken down if a typhoon or other major windstorm is threatening. Future additions to the microgrids could include tidal energy generation and other storage solutions.
A new project that will combine hydroelectric power with an energy storage system will be installed in southwestern Virginia. Greensmith Energy, a Maryland-based provider of software and integration services for stationary energy storage systems, and American Electric Power will install the 4MW storage system that will be integrated with the Buck and Byllesby hydroelectric power plants; the project is said to be “the world’s first hybridized system of its kind to provide ancillary services.”Finnish technology manufacturer Wartsila acquired Greensmith Energy in July.
The damage caused by Hurricane Maria in Puerto Rico, particularly the widespread damage to the island’s electrical grid, has spurred private companies to step in and build microgrids to get the island powered again. Sonnen announced the Puerto Rico Energy Security Initiative, which includes deploying microgrids across the island. The German company is working with local solar power developer Pura Energia to target emergency shelters and emergency medical clinics that need to refrigerate medicine. Tesla, meanwhile, used its PV solar panels and Powerwall batteries to restore power to a children’s hospital in San Juan.
Governments, Corporates Make Additional Commitments to Fight Climate Change
An ever-expanding list of governments — national, state and local — and large corporations are committing to fight climate change through various means, including using 100% renewable energy or meeting the goals of the Paris climate accords regardless of the Trump administration’s stance. Here’s some of the recent activity on this front:
Companies operating in a wide range of sectors have joined together in EV100, agreeing to shift their transportation fleets away from gas- and diesel-powered engines and toward electric vehicles. More than half the cars on the road belong to corporations, the alliance says, which means these efforts could have a huge impact. Among the list of participating companies are Ikea, DHL, HP and Unilever.
Another group of corporations is RE100, which now boasts 110 companies pledging to use 100% renewable power by 2020. New joiners include Citibank, JPMorgan Chase, Kellogg Company, Estee Lauder and DBS Bank.
The U.S. Climate Alliance has grown and now includes 14 states plus Puerto Rico, each committing to reduce their greenhouse gas emissions; North Carolina is the latest to join. The group says it is on track “to meet and possibly exceed their portion of U.S. commitment under the Paris Agreement.” Co-chairs are Gov. Andrew Cuomo of New York, Gov. Jerry Brown of California, Gov. Jay Inslee of Washington, and former U.S. Secretary of State John Kerry.
Also growing is the Under2 Coalition, a group of governments from around the world that are committed to combating climate change. New signatories include Atlanta, Boulder, Pittsburgh, Orlando and the Marshal Islands, bringing membership to 188 jurisdictions, representing 39 countries across six continents.