Stem, one of the leading providers of commercial energy-storage systems, just added $100 million in new financing from energy infrastructure investor Starwood Energy Group. Stem's project financing resources now top $350 million.
It's going to take many billions in project financing to move the energy storage market from nascent to material -- and Stem now leads in the ability to direct capital to commercial behind-the-meter storage projects. The deployments aim to combine big data, analytics and energy storage to benefit the ratepayer as well as the grid operator.
The company claims to have surpassed 75 megawatt-hours of systems operating and under contract at more than 450 facilities in California and Hawaii, with more than 2 million hours of runtime. Stem's customers include Wells Fargo, Safeway, Whole Foods, and Reliance Steel, and the projects use batteries from Samsung, Panasonic and Tesla Energy.
“Distributed energy resources such as those provided by Stem will be part of the foundation of the future electric grid,” said Madison Grose, vice chairman at Starwood Energy. Stem’s other project financing comes from Generate Capital, Clean Feet Investors and affiliates of B Asset Manager.
This funding news comes days after Stem won an auction for demand-response services with Consolidated Edison,
Stem’s utility partners include Southern California Edison, San Diego Gas & Electric and the Hawaiian Electric Company. The company claims to lead the market in successful bidding into the California Independent System Operator's real-time and day-ahead energy markets.
Earlier this year, Stem announced a $15 million add-on from Mithril Capital Management, bringing its Series C total to $68 million and its total venture funding to more than $110 million since its founding as Powergetics in 2010. Peter Thiel is Mithril's co-founder. Other investors in the firm include Angeleno Group, Iberdrola, GE Ventures, Constellation New Energy, Total Energy Ventures, Mitsui & Co., Ltd., and RWE Supply & Trading.
Last month, mainstream infrastructure investor Macquarie Group declared its aim to put $200 million into a fleet of battery projects from Advanced Microgrid Solutions. The systems will be used for "utility grid services including flexible and reserve capacity, solar integration and voltage management, in addition to retail energy services such as demand management, backup generation and enhanced power quality."
France’s Engie (the former GDF Suez) recently acquired an 80 percent stake in Calif.-based Green Charge Networks, a behind-the-meter battery firm like Stem, and plans to apply Green Charge's energy storage at the facilities of its commercial, industrial and public energy services customers. Green Charge raised $56 million from K Road DG in 2014 and has about 48 megawatt-hours of storage deployed or under construction. Exergonix acquired "substantially all of the assets of Coda Energy," a twice-bankrupt California manufacturer of behind-the-meter energy storage systems. Total, a French oil and gas giant with a $120 billion market cap, offered to acquire French battery specialist Saft for $1.1 billion. That represents a 38 percent premium over Saft's recent closing stock price.
The U.S. market for behind-the-meter energy storage grew more than 400 percent in 2015. According to GTM Research's most recent Energy Storage Monitor, Q1 2016 produced $79 million in corporate investments in energy storage, more than double the corporate investments over the same period in 2015.