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US$150m equity investment raised by energy storage system integrator FlexGen

Work underway at a FlexGen BESS project. Image: FlexGen.

Alternative asset management group Apollo Global Management has secured a US$150 million investment into US energy storage technology provider and system integrator FlexGen Power Systems.

North Carolina-headquartered FlexGen said today that funds managed by affiliates of Apollo, along with existing investors into the company, had made the equity commitment. FlexGen CEO Kelcy Pegler told that Apollo is a “perfect partner” for his company.

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“It’s great to be advantaged in the energy storage market,” Pegler said.

Apollo has made a number of investments into the clean energy space in the past year and a half. Offshore wind developer US Wind, electrified gas compression group TOPS and sustainable bioenergy producer AS Graanul Invest have been among its targets. The asset management group has also formed joint ventures with the likes of Johnson Controls on sustainability and energy efficiency and renewables royalties company Great Bay Renewables. 

“Energy storage assets play a crucial role in the transition to an economy powered by intermittent renewable energy sources,” said Olivia Wassenaar, senior partner at Apollo and its co-lead of Natural Resources.

“This transition to renewable power is happening at a time where reliability and resiliency are more important than ever for the grid in the face of increasing extreme weather events. FlexGen’s energy storage solutions bridge the gap of reliability for the grid and help accelerate the adoption of renewables by shifting renewable power consumption to times when it is needed most.” 

Storage providers and investors alike spot growth potential in energy transition

It’s the third US$100 million+ investment into a battery energy storage system (BESS) system integrator and tech provider has reported on this year: at the very beginning of 2021, Fluence got US$125 million investment from a Qatari sovereign wealth fund which valued the technology provider at over a billion dollars and Powin Energy announced an equity investment for an unspecified amount “in excess of US$100 million” from investment groups Trilantic North America and Energy Impact Partners in February. 

FlexGen began as a microgrid company over a decade ago, working with a multitude of technologies for projects around the world for customers that included the US Military. More recently it has become a prolific battery storage system integrator as well as software supplier to customers like utilities and independent power producers (IPP) in locations around the US. 

In an interview late last year, chief operating officer Alan Grosse spoke in some detail about the transition from a multiple technology microgrid provider to a company primarily focused on grid-connected battery storage. Similarly, chief financial officer Yann Brandt, who joined the company along with CEO Pegler earlier this year after a prior career in the solar industry, told in a recent interview that the opportunity presented by the US energy storage industry — which looks set to increase its deployments by 1,000% from 2019 to 2023 — was too good to miss.  

Battery storage supplied to a bottling company in Puerto Rico by FlexGen earlier this year. Image: FlexGen.

The company has worked on 1.2GWh of energy storage deployments in total across a number of segments. Recently announced big projects include two 110MW / 110MWh large-scale battery projects in Texas, using CATL lithium-ion batteries controlled and monitored with FlexGen’s HybridOS energy management system. It has also done a number of smaller projects for utility customers in territories that, unlike Texas, are not often thought of as hotspots for battery storage, like Indiana and Kansas. 

“FlexGen has been built for this moment in the energy transition over the past 10 years,” Yann Brandt told this morning. 

“With as fast as the market is growing and how rapidly our customer base is expanding, we saw the opportunity to partner with Apollo as the perfect moment to bolster FlexGen’s market position.”

Brandt said previously that he believes energy storage “will run the grid” in the coming years, particularly as technology costs fall and software becomes smarter. The complexity of the energy storage market, where unlike solar or wind, the business case is not generally based on long-term contracted revenues but instead on providing numerous different valuable services, often on a merchant basis, offers a deep opportunity for companies like FlexGen and their rivals.   

“Kelcy and I both identify with our customers and matching our services and software with the enhanced financial position makes it easy for energy storage investors to work with us. Our customers and their energy storage assets are our mission, both to get them built and to help them operate them with robust software that works at all times. As the energy transition continues, the entire team at FlexGen is focused on delivering reliable solutions to enable the intelligent grid we are looking for,” Brandt said in his comments to today. 

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