Siemens and AES Corporation – both giants in the field already – have announced the launch of a new energy storage venture named Fluence.
Named apparently from the “‘confluence’ of forces redefining the energy landscape”, the company will be focused on the delivery and development of energy storage solutions and services.
Growing numbers of players, such as the new entry electric vehicle manufacturers, and the regular flow of mergers and acquisitions point to the already highly competitive nature of the energy storage industry. With the combined strengths of the two companies, this new venture raises the stakes further. And with storage prices trending downward, further economies of scale that may result will accelerate that.
In the case of Siemens, the primary strength is its global reach but it also brings experience in microgrids and across energy spectrum. AES brings over a decade of experience in energy storage and is a leader in terms of deployed capacity and its use for ancillary services and other applications.
Energy storage platforms
According to a statement Fluence will combine AES’s Advancion and Siemens’ Siestorage energy storage platforms to offer a wider variety of options for customers to meet the challenges of the rapidly transforming energy landscape.
The platforms are complementary in that Advancion is focussed on utility scale projects whereas Siestorage is aimed at smaller scale C&I initiatives. Both support a range of energy storage applications and these will be expanded.
Siemens and AES will have joint control of the company with each holding a 50% stake and it will operate independently of the parent companies. The headquarters will be located in the Washington, DC area with additional offices to be located in Erlangen, Germany and other select cities worldwide.
According to Navigant Research, quoted by the two companies, AES and Siemens are currently among the leading energy storage integrators worldwide. Together, the two companies have deployed or have been awarded 48 projects totalling 463MW of battery-based energy storage across 13 countries.
AES was the first company to install grid-scale lithium-ion batteries (at Indianapolis). Its technology is also utilised in the world’s largest lithium-ion-based system, a 30MW, 4h array at Escondido near San Diego, California, while a 100MW/4h system is currently under contract.
Explaining the background to the deal in a press briefing, Andrés Gluski, AES President and CEO, said: “With the global potential for energy storage, we wanted a technological and business partner who could help us realise the potential of our product in the market.”
Energy storage potential
That potential market is massive, worth as much as $45bn based on IHS Markit figures, which project that grid-connected energy storage will increase from 3GW in 2016 to 28GW in 2022 and 50GW in 2025.
“We are excited about the future of energy storage and the role it will play in enabling the electricity grid of the future,” said Kevin Yates, President Siemens Energy Management North America, in the briefing. “We see Fluence as the platform that will help deliver technology leadership to the distributed energy market.”
Subject to regulatory approvals Fluence is expected to open its doors by the 2017 year end.