UK-based Connected Energy has raised £15 million (US$18.4 million) from five new investors to help scale up its second life-based battery energy storage system (BESS) solution.
Financing has been secured from Caterpillar Venture Capital Inc., the Hinduja Group, Mercuria, OurCrowd and Volvo Energy, part of manufacturing firm Volvo Group (not to be confused with Volvo Cars, the consumer vehicle division it sold to Ford in 1999).
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Volvo Energy is focused on electrification and sustainable energy solutions for Volvo Group’s commercial vehicles group including trucks and buses under Volvo and other name brands.
They join existing investors Engie New Ventures, Macquarie and the Low Carbon Innovation Fund. The new money will be used to enable Connected Energy to scale up in response to the growing energy storage market and increasing international availability of second life batteries.
“This investment round is about scaling up the business, not only to sell more systems but also to launch a utility-scale project to demonstrate our technology at scale and prove the business model. Our view is that you need to get to 2025, when the real volumes of batteries will come into play, with a bankable business model and a proven technology,” CEO Matthew Lumsden told Energy-Storage.news.
Connected Energy says there will be 6.7 million pure EVs operational worldwide by 2024/25 and 34.7 million by 2030, meaning ‘vast’ potential for battery reuse in energy storage.
Lumsden said that 25% degraded batteries, often considered unsuitable for use in an EV, still have a ten-year lifetime for stationary energy storage. He recently wrote a guest blog for Energy-Storage.news in which he argued that more attention should be paid to reusing batteries as well as recycling them.
As Lumsden alluded to, The new funding will also help Connected Energy develop its first large-scale solution, the M-STOR system, which is planned to be around 20MW/40MWh. Its deployments to date have been around 1MWh or less. Reporting on one of its biggest projects to date, a 1.2MW/720kWh system in Belgium for materials technology and recycling group Umicore, was among this site’s top 10 most-read news stories in 2020.
Connected Energy said it has already booked more projects in the first three months of 2022 than in any previous year, with this largely due to rising fuel prices, which it said have caused many organisations to consider the use of energy storage to reduce costs, increase self-consumption and generate new revenue as well as solve problems such as supply constraints.
The company’s business model is similar to German group Tricera Energy, which Energy-Storage.news recently interviewed. Tricera’s supply is slightly different, repurposing unused battery modules from the EV sector that automative players are willing to sell.
Just as Tricera’s COO Lars Fallant did, Lumsden highlighted battery control systems and rack design as major aspects of building second life-based BESS solutions. He said that battery module OEMs could make second life repurposing much simpler by incorporating simple yet highly effective changes into their design, like adding fixing holes and channelling into the external casing of the batteries.
Connected Energy has worked with several EV OEMs and there is a growing awareness in the automative industry of the opportunity to reuse and repurpose (as distinct from recycle) batteries from EVs.
Energy-Storage.news has reported on several moves this year including a Mercedes-Benz tie-up with Swedish startup BatteryLoop in April, Jaguar Land Rover launching an off-grid ESS unit and energy group Enel commissioning a 4MW BESS using Nissan EV batteries, both in March. Audi supplied used batteries from its e-tron EV to a 4.5MWh BESS project which launched in Herdecke, Germany, in January.
Additional reporting by Alice Grundy, reporter, Solar Media.