Green Charge Networks, one of the country’s pioneers in behind-the-meter batteries, has just been taken over by France’s Engie. The energy giant, formerly known as GDF Suez, announced Tuesday that it has acquired an 80 percent stake in the Santa Clara, Calif.-based startup, and plans to put its building energy storage and battery-solar expertise to work for its commercial, industrial and public energy services customers.
Terms of the deal weren’t disclosed. Green Charge has previously raised $56 million from K Road DG in 2014, and an undisclosed amount from angel investors including ChargePoint founder Richard Lowenthal in its early days in New York City.
Green Charge CEO Vic Shao wouldn’t say how much Engie spent to take Green Charge under its wing, but insisted that “investors definitely made money” on the deal. The company got its start deploying its battery and control systems in 7-Eleven stores and rental car lots in New York City under an $18 million Department of Energy grant, which helped it reach scale without too much capital, he noted.
Green Charge has also lined up $50 million in non-recourse debt financing from Ares for new projects, which will remain intact under Engie’s ownership, he said. But with the deep pockets of a multinational energy services company behind it, he’s expecting a lot more growth.
“Engie does a little bit of everything -- or a lot of everything,” he said. “They have 150,000 employees worldwide, and I think they’re in fact the world’s largest provider of energy efficiency services. They have a footprint in every state in the U.S. and in most countries around the world.”
The companies were introduced through Engie subsidiaries Ecova and OpTerra Energy Services, which do work with the same kind of commercial and industrial clients that Green Charge does, he said. “Those entities provide different services than Green Charge Networks does,” largely focused on reducing waste and optimizing energy use, in terms of the kilowatt-hours of energy consumed.
Energy storage, by contrast, focuses on reducing the demand side of the energy equation, by injecting stored power to avoid spikes in grid power consumption at any one period in time. That can help reduce demand charges, a portion of the utility bill that’s invisible to residential customers, but can add up to nearly half of a commercial or industrial customer's costs in high-priced states like California and New York.
“On that kilowatt-hours side of the business, most of the low-hanging fruit is gone,” Shao said. “The next frontier is on the kilowatt side, on the power side -- and offering energy storage.”
As for how Engie plans to put Green Charge’s technology to use, Frank Demaille, CEO of the company’s North American business, said it will be deploying it in standalone storage and storage-plus-solar configurations for clients in the United States.
But the “acquisition will also reinforce Engie’s strengths and skills in the activities of decentralized energy management, off-grid solutions, and power reliability, which are identified as areas for growth for the company around the world,” he said.
As Shao said, “A lot of what Engie is acquiring here is the very sophisticated software and analytics [and] operational capabilities of our energy storage system.” Green Charge has about 48 megawatt-hours of storage deployed or under construction, and has “real-time communications and monitoring, and analytics for charge-discharge activity being done every couple of seconds.” While opportunities to put aggregated behind-the-meter capacity to use for grid or utility needs are still rare, Green Charge has aggregated a portion of its portfolio in California to serve the state’s new demand response auction mechanism (DRAM) program, and it is looking at more opportunities, he said.
This is one of the first big acquisitions in the behind-the-meter battery space, at least in the United States. Green Charge competes against rival California startup Stem, which has raised about $75 million from investors including Angeleno Group, Iberdrola (Inversiones Financieras Perseo), GE Ventures, Constellation New Energy, and Total Energy Ventures, and has some $135 million in non-recourse debt project financing.
It also competes against SolarCity and Tesla, which have deployed dozens of megawatts of behind-the-meter storage projects in California, and which also have plans to deploy a lot more this year. Newer entrants include as Gexpro, the electrical equipment distributor that is selling a C&I storage system using software from startup Geli, batteries from LG Chem and inverters from Ideal Power. Another rival in the field, Coda Energy, closed its doors in December.