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Energy storage takes centre stage as Total and Engie buy in

Energy storage takes centre stage as Total and Engie buy in


There was momentum in the energy storage industry last week, with Total’s EUR 950m ($1.1bn) acquisition of French battery-maker Saft Groupe, and Engie’s endorsement of Green Charge Networks, through its purchase of an 80% stake in the California-based energy storage provider.

Engie’s signal of support for Green Charge Networks is the first time a large utility has taken a majority stake in an energy storage company, and is a sign of its decision “to refocus its business towards low-carbon generation, customer services and natural gas,” according to a BNEF Analyst Reaction . This will help the French utility expand its offering to commercial and industrial consumers – many of whom could benefit from Green Charge’s energy storage systems designed to reduce peak demand charges. For Green Charge Networks, the deal will provide the company with “much greater access to capital due to Engie’s EUR 8bn ($10bn) balance sheet and existing banking relationships,” the note says.

Another record-breaker last week, was Total’s acquisition of Saft Groupe, which stands as the largest-ever M&A deal for an energy storage provider. Enthusiasm for the stationary storage market was the principal motivation for the largest acquisition by Total in five years, according to analysis by Bloomberg New Energy Finance. “The acquisition gives Total expertise in a market that will double in size from 2015-16 in terms of MW deployed,” wrote BNEF energy storage analysts. Although Saft does make some batteries for transport applications, “Total is not seeking to disrupt its own oil business by promoting greater electrified transport,” but to assess opportunities for energy storage, including integration with SunPower’s utility-scale solar projects. Total acquired solar PV developer SunPower in 2011.

The potential benefits for increasing storage in the energy mix are attracting interest in markets from California to China. Energy storage could be the answer to the problem of China’s idled renewable energy capacity, says the China Energy Storage Alliance. The industry association estimates that the country could increase its storage capacity to as much as 14.5GW by 2020, as it becomes more adept at balancing the growing amounts of wind and solar power on its grid network.

In other acquisition news, Nissan Motor lent a helping hand to Mitsubishi Motors with an agreement to purchase a 34% stake in its Japanese rival. The $2.2bn deal coincides with Mitsubishi’s admission that it improperly handled fuel economy tests, and will result in a grouping of companies with a dominant share of the global electric vehicle market, according to BNEF analysis. In 2015, Nissan, Renault and Mitsubishi collectively accounted for around 25% of total electric vehicle sales and supplied five of the 50-plus EV models on offer globally, including the best-selling Nissan Leaf and Mitsubishi Outlander.

Strengthening the alliance could also benefit product development. “[Combining the] Nissan-Renault alliance’s battery-electric vehicle platform with Mitsubishi Motors’ plug-in hybrid platform would result in the ability to launch new EV models at lower capital outlays,” helping to better position the companies against the likes of Volkswagen and Tesla Motors, the note says.

Nissan also made headlines with its announcement that it would pilot vehicle-to-grid technology alongside Italian utility Enel. The partnership will see drivers of the Nissan Leaf and e-NV200 electric vans able to sell excess energy stored in their vehicle batteries back onto the grid at times of peak load – earning consumers money and helping to balance demand spikes on grid networks. The software will first be trailed through 100 drivers in the UK before being rolled out on a commercial basis, said Ernesto Ciorra, head of innovation and sustainability for Enel.

Europe’s offshore wind sector is attracting foreign buyers, with Enbridge’s recent purchase of stakes in three offshore wind farms off the French coast for $218m from Dong Energy. The Canadian pipeline operator will acquire a 50% stake in Eolien Maritime France –the developer of the wind farms – from the Danish energy company, and the deal is expected to close at some point this year. Attractively priced long-term contracts with government backing are a principal reason for Enbridge’s enthusiasm for Europe’s offshore wind market, the company was quoted saying last month. In 2015, Enbridge paid CAD 750m ($582m) for a 25% stake in a 400MW offshore wind farm in the UK developed by EON.

Also in France, it was announced that Ségolène Royal, the country’s energy and environment minister, will soon launch tenders for floating wind farms and commercial tidal-stream parks, while in the UK Statoil was granted a lease to build the world’s first floating offshore wind farm. The Norwegian energy company will build its 30MW Hywind project off Scotland’s east coast, positioning floating turbines fixed to steel tubes that are fastened to the seabed.

Meanwhile, Germany’s ‘Energiewende’ policy has received a boost of confidence, as renewable energy supplied almost all of the country’s power demand for the first time on Sunday. Solar and wind power supplied as much as 45.5GW while demand was 45.8GW and power pricing turning negative at several points during the day. The country’s strong export capability enabled renewables to meet demand even while thermal generation maintained a constant back-up supply, said a BNEF analyst.

Anand Gupta Editor - EQ Int'l Media Network


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