Shell, which has just participated in an investment round for sonnen, is one of the big players in the incumbent energy industry that “really acts” on clean energy, rather than just talking about it, sonnen’s CEO has said.
Royal Dutch Shell’s venture capital arm, Shell Ventures, led the €60 million (US$70.23 million) investment round which closed earlier this month. Shell VP for energy solutions Brian Davis told our sister site Current± that the move enabled Shell to combine its “power business activities with sonnen’s high quality, innovative products and business model to enhance our consumer energy offerings”.
Sonnen is known as a market leader in terms of systems sold in its home country of Germany, where the company has been selling residential and small commercial energy storage systems as well as accompanying services.
These include SonnenCommunity, which allows system owners and subscribers to access each other’s stored surplus PV energy via the grid and SonnenFlat, in which customers pay a flat rate for their electricity on a monthly basis while sonnen aggregates their storage systems into a network. Sonnen then provides services to the local grid such as frequency control, netting revenues for doing so, while the customer is guaranteed lower electricity bills than local utilities are offering.
Virtual power plants in focus once again
Sonnen CEO Christoph Ostermann told Energy-Storage.news that alongside overall expansion efforts in various international markets, the scaling up of these aggregated, so-called virtual power plant (VPP) networks will be a major focus for the invested cash. In all markets where the company is active, “sonnen wants to scale up its energy services that are based on its virtual power plant (VPP)”, Ostermann said. Services named by the CEO encompassed energy sharing, grid services and solar load shifting.
“Basically the investment will be used to continue scaling up our business,” Ostermann said.
“That includes regions like Australia, where we proposed the opening of a production site in February. Also the US is a market where we want to invest further, for example in more projects like the first sonnenCommunity in Arizona.”
The SonnenCommunity Arizona project Ostermann referred to provided an interesting case in point on some of the differences international energy storage and services providers face in migrating a business model from one market to another. At the time of that project’s inception, sonnen’s sales chief and managing director Philipp Schroeder, told Energy-Storage.news that while in Germany, SonnenCommunity could be rolled out on an individual basis to households and then aggregated into a network, regulatory differences meant that in the US, a more applicable strategy is to create a planned development or community deployment of storage and solar-plus-storage systems, in partnership with property developers and local utilities.
Big dirty energy players becoming big clean energy investors
As for the profile of a big legacy energy industry player like Shell not only getting involved in the funding round but actually leading it, Ostermann said “even the big players in the energy business are starting to diversify” into renewables, which he said is good news for the “clean energy future”.
Those big players now have to invest in clean energy technologies or be left behind, and with it the desire to pick out “innovative and successful businesses for renewable energies like sonnen”, the CEO said.
Shell, through its New Energies division is investing more than many of its rivals, Ostermann pointed out. Shell CEO Ben Van Buerden attracted headlines in 2015 for saying on a British radio programme that he saw solar-plus-storage, especially on rooftops, as the natural mainstream successor to fossil fuels in delivering baseload energy to the world’s electricity grids. However Van Beurden said that he thought this process would still take a number of decades, despite that trend already being in motion.
Attracting an investor of Shell’s scale – while not forgetting that the investment round had other participants – would benefit sonnen not only by allowing the German company to scale up its business but by creating “strategic cooperation” with Shell.
“That opens the door to new customers for our storage systems and for new applications run by our VPP,” Ostermann said.