SunEdison’s demise is casting a shadow over plans to roll out 1,000 vanadium flow batteries across India.A year ago, SunEdison partnered with Imergy Power Systems in a major rural electrification program. But with bankruptcy on the horizon, there are questions about whether the company can execute on its international and domestic storage plans.“The recent collapse of investor trust in [SunEdison’s] business model could well affect its tie-up with Advanced Microgrid Solutions in California, especially since this was connected to its YieldCo model, and its commitment to purchase 1,000 flow batteries from Imergy,” said Logan Goldie-Scot, head of energy storage analysis at Bloomberg New Energy Finance.
All of SunEdison’s storage-related initiatives are in doubt, he said. Last October, the company laid off hundreds of employees — including many working on storage in the U.S. SunEdison made no announcements about its plans with Imergy. But executives did say in October that they are tightening international operations.It is unclear how many flow batteries have been installed as part of SunEdison’s program in India. The solar company announced the deal with Imergy as part of a project to bring power to 20 million people by 2020.Last September, Imergy confirmed it had only installed two SunEdison microgrids and had just two more “due to go live soon.”
The microgrids rely on Imergy’s 30-kilowatt, 120 kilowatt-hour ESP 30 products. SunEdison was ultimately hoping to install 5,000 microgrids over five years, working with the New Delhi-based Omnigrid Micropower Company (OMC).OMC said its rural electrification program, which received a $4.5 million boost from the Rockefeller Foundation this March, is not in danger. At least 100 of the microgrids are due to be funded by the foundation.The money is destined for “construction and retrofitting of 100 solar power plants with minigrids in rural Uttar Pradesh,” according to a press release.“OMC is moving ahead full steam with our minigrid rollout, with the partnership and investment from the Rockefeller Foundation,” confirmed Pär Almqvist, OMC’s chief marketing officer.
He was unable to confirm whether SunEdison would still be able to act as a fulfillment partner for the solar and storage equipment, however.SunEdison shares are trading near $0.50 after the Wall Street Journal reported that the company is facing a Securities and Exchange Commission investigation into false liquidity assurances by the firm’s board. The Department of Justice has also launched its own investigation.At the same time, SunEdison’s YieldCo, TerraForm Global, warned its parent is at “substantial risk” of seeking bankruptcy protection. TerraForm Chief Financial Officer Rebecca Cranna specifically cited the Indian projects as being in jeopardy.In a recent research note, Bloomberg New Energy Finance’s head of solar analysis, Jenny Chase, wrote: “Presumably, [SunEdison] plans to continue cutting costs by stopping expansion, liquidating or writing down assets…and selling projects for what it can realize.”
If SunEdison is unable to deliver on its India commitments, then OMC could turn to an alternative supplier for solar equipment. First Solar or SunPower could snap up parts of SunEdison’s business, noted Chase.It’s uncertain whether Imergy would remain as a storage provider for the Indian microgrids.“Frankly, I haven’t heard much about the alliance between SunEdison and Imergy in India,” said Madhavan Nampoothiri, founder and director of analyst firm RESolve Energy Consultants in Chennai, Tamil Nadu.
“I really doubt off-grid storage will be a priority area” given SunEdison’s financial situation, he said.
Even before the current troubles, Nampoothiri noted, SunEdison had acquired a reputation for making grand claims in India. “Past experience shows that many of SunEdison’s press releases do not really translate into anything concrete,” he said.“For example, SunEdison announced it would enter into a joint venture with Adani Group for an integrated solar manufacturing plant in India, but it did not materialize. Similarly, SunEdison announced it was buying wind assets from Continuum Energy, but called off the deal,” said Nampoothiri.
Beyond the Indian storage deal, a SunEdison implosion could potentially have a wider impact on Imergy’s business.SunEdison is an equity investor in Imergy. Along with the Indian microgrid partnership, the two companies were collaborating on a 5-megawatt, 20-megawatt-hour flow battery storage system for Ontario’s Independent Electricity System Operator, announced last December.The project was due to kick off in the first half of 2017, with operations and maintenance through SunEdison Services.