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NHOA claims battery storage business success ‘despite increasingly complex global scenario’


The CEO of energy storage and e-mobility solutions company New HOrizons Ahead (NHOA) has hailed its “unparalleled” performance in the first half of this year, despite industry headwinds.

NHOA, formerly known as ENGIE EPS, was acquired by Taiwan Cement Corporation (TCC) last year and its new owners have overseen the setting of ambitious performance targets for the technology group.

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NHOA is aiming to grow its business tenfold by 2025, with its activities including system integration and turnkey supply of stationary battery energy storage systems (BESS), electric vehicle (EV) charger infrastructure, fast EV chargers and related areas like microgrids.

The Italy-headquartered company last week released its unaudited financial results for H1 2022, which showed that it had almost equalled its €15.9 million (US$16.15 million) FY2021 sales figures from its energy storage Global Business Line (GBL) for the entire FY2021 within the first quarter of 2022 (€15.5 million).

FY2021 had represented a doubling of storage revenues from the year before, and during H1 2022 NHOA reported €73 million energy storage sales.

It has now surpassed the gigawatt-hour figure (1,043MWh) for storage projects under development including 292MWh with secured contracts and 751MWh of turnkey supply contract backlog. The company did modest business in that regard this year however, netting only one 30MWh new contract for a customer in Peru in Q1 and no large contracts in Q2.

It grew its pipeline of energy storage opportunities from €764 million in 2021 to €1,031 million. Meanwhile consolidated sales across all of its business lines leapt from €7.2 million in H1 2021 to €82.2 million for the same period this year.

While it presented an “unparalleled” performance for the company so far, energy storage represents the technological heritage and the backbone of the group ever since its founding nine years ago CEO Carlalberto Guglielminotti said in a conference call to discuss results.

Guglielminotti said that the 30x growth in energy storage revenues from H1 2021 (€2.3 million), was in line with expectations of the group given NHOA finished last year with a strong backlog, but “shows our ability to perform” and meet those expectations.

As has been experienced across many industries, supply chain issues are a challenge. Referring to NHOA’s e-mobility joint venture (JV) Free2Move solutions with automobile OEM Stellantis, the CEO said that lead times for delivery of some critical components have gone from 12 weeks to 15 months “overnight”.

“We had to cope with a detracted supply chain,” Guglielminotti said. The CEO took over the company back in 2014, then known as Electro Power Systems, as it restructured from a previous bankruptcy, before then being acquired for €108 million by European utility and power group ENGIE.

‘Daily challenge of managing supply chain disruption’

Shipping of equipment and components from China has been impacted this year by the country’s localised COVID-19 lockdowns, while other deliveries from countries in the Black Sea region are being directly affected by the war between Russia and Ukraine, NHOA’s head of energy storage Giuseppe Artizzu said.

NHOA has had to prove it can deliver equipment and provide services on time while managing costs and risk, Artizzu said, adding that its strong revenue recognition is testament to the company’s ability to do so. It was “managing daily the effect” of supply chain disruptions, Artizzu said and NHOA’s cost base remains consistent with its expectations and budget.

He said that the lack of big orders in the last three months was to be expected. Turbulence in commodity markets and battery pricing have made it difficult for NHOA’s clients to reach a final investment decision (FID).

Late last year, former parent company ENGIE cancelled a solar-plus-storage hybrid project in Hawaii to which NHOA was to supply a 240MWh BESS, citing supply chain conditions, as well as other factors like high costs of grid interconnection and solar PV import tariffs.

However, the company is modestly optimistic that clients will start to make FIDs again soon, with some “calming down” of commodity market turbulence observed in the past six to eight weeks.

Meanwhile, energy market dynamics mean that the fundamental value proposition of battery storage and therefore demand remains strong, even though it is undeniable the rising cost base for lithium-ion batteries and related equipment has presented a major challenge.

The industry is maturing though, and battery suppliers are coping better than before with commodity risk, while many suppliers of batteries – and other equipment – are accepting some long-term exposure to upstream risk in order to invest in new materials and reduce their exposure to spot market fluctuations in metals prices, according to the executive director for NHOA’s global strategy.

Giuseppe Artizzu said earlier this year at the Energy Storage Summit hosted by our publisher Solar Media that ultimately he believed energy storage supply chains would come out stronger from challenges, which in part have come about because demand for battery storage has grown faster than many anticipated.

Artizzu noted that some significant battery deliveries have been made in the past three months, including to NHOA’s 200MWh project with utility Synergy in Australia, while deliveries to a major 442MWh order for parent company TCC’s projects in Taiwan are expected to fall within Q4 this year.  

The company’s CEO did not rule out revising its revenue guidance upward in the coming weeks as NHOA issues its audited H2 financial results by the end of this month or the beginning of August. Carlalberto Guglielminotti said EBITDA projections will also be offered at that time, but said it is possible its two main business divisions, for energy storage and its Free2Move JV could break even in EBITDA terms before the end of this year.

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