Finnish technology group Wärtsilä has signed to buy Greensmith Energy Management Systems, a US-based provider of energy storage technology and solutions.
The acquisition of Greensmith falls in line with Wärtsilä’s goal to expand its operations to the energy storage market.
The company’s plan is to develop full in-house capabilities specialising in solutions that offer the combination and optimisation of different forms of power generation, energy storage and demand side management.
Ownership of the company will be transferred to Wärtsilä after closing of the transaction which is expected to occur no later than July 2017.
The purchase price has yet to be disclosed and the settlement is subject to US regulatory approvals.
Creating a global energy systems integrator
Javier Cavada, President at Wärtsilä Energy Solutions, says that the acquisition will see Wärtsilä become a global energy systems integrator as Greensmith provides “unparalleled software and energy storage knowledge” and Greensmith provides “a global footprint, EPC expertise and large sales network. A perfect match."
Greensmith has deployed approximately 33% of the US’s energy storage total capacity in 2016 and states it has delivered over 180MW to some of the largest power companies globally.
Large utilities like AEP and E.ON as well as venture capital companies like Cota Capital and TDF Ventures have pumped over $27m in investment into the company.
Greensmith has incorporated 14 different types of batteries, including multiple lithium-ion chemistries, as well as ViZn Energy’s zinc redox flow batteries, into its software suite.
As of 2017, acquirer Wartsila has 63GW of installed power plant capacity in 176 countries.
Energy storage acquisition trend
This acquisition is part of a growing trend where large companies are acquiring small, developing energy storage companies.
According to Mercom Capital Group, there were 11 merger and acquisition (M&A) transactions in battery/storage, of which four transactions were disclosed, totaling $2.4bon compared to 18 M&A transactions (six disclosed) in 2014 for $232m.
The most prominent transaction was the $2.2bn acquisition of Polypore International's energy storage business by Asahi Kasei.
Other than commercial companies, large utilities are also recognising the opportunities that exist in these acquisitions.
Italian utility Enel acquired a 100% stake in US company Demand Energy, a developer and operator of energy storage systems and software, at the beginning of this year.
French utility Engie bought an 80% stake in California-based C&I storage specialist Green Charge Networks in May 2016.
Last September, a subsidiary of French utility EDF acquired Groom Energy Solutions, an energy services company.
Energy storage has a major role to play in facilitating the integration of renewable energy. With the increase in renewable generation, the complementary deployment of energy storage is a trend which is bound to continue into 2017 and beyond.