Year in Review: Fluence on data centres, domestic manufacturing and another ‘record-breaking year’ ahead

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Our Year in Review Q&A series continues as we speak with Andrew Gilligan, senior director for commercial strategy at Fluence.

The story of Fluence, established in 2017 as a joint venture between European engineering giants Siemens and North American power generation and infrastructure big-hitter AES Corporation, in some ways mirrors the growth and progress of the battery storage industry over that time.

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From bringing on board outside investment from the Qatar Investment Authority sovereign wealth fund in 2021 that gave the company a ‘unicorn’ valuation at over a billion dollars and a much-talked-about IPO later that year to the launch of modular, higher energy density and lower footprint enclosures alongside diversification to digital software service-based business models and most recently in-house manufacturing, it’s fair to say Fluence has been an interesting company to track over the years.

In its most recent financial results announcement in November, CEO Julian Nebreda said the company “met or exceeded our outlook in all key metrics” for its Financial Year 2024 (Premium access), which ended in September. Turning early market gains into profit has been difficult for even the biggest players in the industry, but Fluence generated net positive income for the year for the first time since its NASDAQ listing.

The company was ranked third globally among large-scale battery energy storage system (BESS) integrators by both S&P Global (Premium access) and Wood Mackenzie in their most recent reports on the sector. It was also the winner of System Integrator of the Year at the Energy Storage Awards 2024, winning the prize for the second year in a row, making it well-placed to offer views and perspectives on 2024 and the possible outlook for 2025.  

We hear from commercial strategy director Andrew Gilligan what 2025 will hold, and what last year meant in retrospect.

Stay tuned as our epic industry Year in Review Q&A series continues this week and next.

What did 2024 mean for the energy storage industry from your company’s perspective and the bigger picture? 

2024 was a landmark year for the energy storage industry, solidifying its role as a critical pillar of the global energy transition and fundamentally transforming how we power the world.

From a growth perspective, the numbers speak volumes—global installations surged to 169GWh, a 76% increase from 2023, according to BloombergNEF (BNEF). This growth firmly places energy storage in the ‘hockey stick’ phase of an S-curve for technology adoption. But beyond the impressive deployment figures, energy storage is proving its value in ensuring grid reliability in key markets like California, Texas, the UK, and Australia.

Equally significant, 2024 saw the largest price drop for turnkey storage since 2017, with costs falling over 40%. This milestone has opened up new markets and made longer-duration storage solutions economically viable far sooner than analysts anticipated. While these advancements are not yet reflected in deployment data—since many new projects are still in the pipeline—they lay the groundwork for an even more transformative future.

For Fluence, 2024 was a banner year as well—our biggest and best yet. The industry’s rapid growth and innovation have set the stage for continued success, and we’re proud to be leading the charge in this global energy transformation.

What do you think 2025 will hold, firstly in terms of things to look forward to, but also in terms of challenges ahead? 

It is set to be another record-breaking year for energy storage, with even greater deployment volumes and growing market diversity.

We expect system durations to increase across the industry, reflecting the demand for more versatile and robust solutions. Much of this growth will be fueled by continued innovation, including next-generation battery cells and system-level advancements that drive efficiency and performance.

Of course, with this growth comes expected challenges. As energy storage becomes a cornerstone of energy security and grid reliability in a decarbonising world, the industry must prioritise safety, cybersecurity, and ethical supply chains.

Storage is no longer a niche solution; it’s now a critical component of grid operators’ strategies and must be designed, built, and operated to the highest standards.

Additionally, global trade dynamics, including the potential for new tariffs, could impact pricing and supply chains in the near term, posing another challenge the industry must navigate.

“Storage is no longer viewed merely as a replacement for retiring fossil fuel plants or a complement to solar projects. Instead, it has become one of the few viable solutions for quickly adding significant capacity near high-demand hubs like data centres.”

Andrew Gilligan, Fluence

The last year has seen incredible growth in energy storage deployments in key markets worldwide, but what are some things that people may not be aware of when considering the development of mature and emerging markets?

The incredible growth in energy storage deployments highlights the immense potential of this sector, but developing mature and emerging markets requires a nuanced approach. Successful markets hinge on both regulatory and economic viability.

It’s easy to celebrate when one of these factors aligns, but achieving both often takes significant effort and time upfront. However, once they are in place, market growth can accelerate exponentially, far outpacing expectations. This growth rarely follows a linear trajectory and instead tends to occur in leaps once key conditions are met.

Fluence began manufacturing its own battery modules (pictured) in Utah, US, this year, and signed a supply deal for domestically-made cells from AESC. Image; Fluence.

Another crucial and still underestimated factor is the impact of AI and data centre demand on the energy sector. Over the past year, in data centre-heavy markets like the US, we’ve seen a seismic shift.

Storage is no longer viewed merely as a replacement for retiring fossil fuel plants or a complement to solar projects. Instead, it has become one of the few viable solutions for quickly adding significant capacity near high-demand hubs like data centres. This paradigm shift is fundamentally changing how utilities and major energy users approach procurement, driving not just greater demand for storage, but also reshaping its role in meeting evolving electricity needs.

Are there any major market trends that our readers should watch, perhaps related to technology, financing, or other aspects of the industry? 

We expect that lithium-ion (Li-ion) will remain dominant, with longer durations and higher-performing cells emerging.

The US is expected to expand its domestic storage supply chain while other markets navigate similar strategies. On financing, investors will favour storage projects with contracted revenue over purely merchant models.

Finally, we expect cybersecurity will take centre stage for key customers and regulators in 2025.

What should the industry’s priorities be in 2025 and beyond? 

Looking back, 2024 may mark the year storage truly took centre stage globally.

Now, the industry must rise to the challenge of delivering grid reliability and maturing through better technical standards, safety, and supply chains.

Renewables paired with storage can drive electricity decarbonisation, but this requires thousands of developed and responsibly delivered projects and strong collaboration with energy stakeholders.

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