AMS on growth plans, new investor

The rapid growth of Advanced Microgrid Solutions continues as it prepares to announce a new major global investor, after signing contracts for Tesla energy storage, and with Shell and Southern California Edison. Photo credit: Tesla Motors

Advanced Microgrid Solutions is set to announce a new major global investor, after signing contracts for Tesla energy storage, and with Shell and Southern California Edison. Photo credit: Tesla Motors

By Jason Deign

San Francisco, California-based start-up Advanced Microgrid Solutions (AMS) has confirmed it is set to announce “a very large global strategic” investor, probably later this month.

The investor, described as being active “both on the investment side and on the energy generation owner and service side” is set to join existing backer DBL Partners in an “over-subscribed” USD$10m new funding tranche.

Katherine Ryzhaya, chief commercial officer, also told Energy Storage Report that the company was looking to expand beyond its California homeland and was in talks with utilities in New York, Hawaii and other US states.

Furthermore, she said: “We think China is going to be good market for us.”

Entry into the Chinese market would be contingent on finding a suitable commercial partner, she noted.

Barely heard of before

Advanced Microgrid Solutions had barely been heard of before last November, when it announced a 50MW contract to develop so-called hybrid-electric buildings for Southern California Edison. It has since caught the eye of many industry watchers.

In January, for example, AMS was named one of 12 energy storage start-ups to watch in 2015.

Hype surrounding the company, which currently employs 13 people, climbed further last month when it signed a deal to buy 500MWh of battery storage off Tesla.

Two and a half weeks ago AMS also unveiled a memorandum of understanding with Shell Energy North America, to install up to 20MW of battery storage at Shell’s commercial, industrial and utility customer sites in California.

“Shell will be providing capacity payments to us,” explained Ryzhaya. “This is going to be an aggregation of systems at multiple sites. Those sites belong to Shell customers.

“We will together identify potential customers and locate storage systems at those sites.”

The California energy storage mandate

In California, Shell acts as a direct energy provider to large power users. The company is thus subject to the California energy storage mandate.

At the same time, though, Ryzhaya said Shell was probably keen to take advantage of energy arbitrage and to be seen to offer greater value to its customers.

“California customers understand the value of energy storage and are looking for those products from their energy providers,” she said. “It’s customer engagement, trading optimisation and storage mandate compliance.”

Ryzhaya said other commercial announcements were in the pipeline, but would not give details. “We are scaling very quickly but want to stay somewhat lean and not expand into areas where our partners can add value,” she commented.

“Our strength is in growing our business and developing a lot of the software in-house. Where we are outsourcing capability is in engineering and construction, network operation.”

Evaluating other technology providers

Advanced Microgrid Solutions is currently using Black & Veatch as an engineering, procurement and construction partner. It is also evaluating other energy storage technology providers besides Tesla, having recently issued a request for offers.

However, Ryzhaya could not say what technologies were involved or how they would be integrated into current systems.

“We’re technology agnostic,” she said. “In southern California we’re using Tesla technology because we need to get four hours out of it. For a frequency regulation market we would probably use a different technology.”

Whatever the market, Ryzhaya claims AMS has a unique value proposition by delivering energy storage projects that could benefit end users and grid operators at the same time.

“We are the first in the market that has an algorithm for dual-use projects,” she said. “Before you either had behind-the-meter projects or grid projects that were under exclusive rights of the utility. There are two revenue streams.”

A virtual power plant

In press materials, meanwhile, AMS says: “The combination of energy storage technology and intelligent software will allow customer loads to be used as a virtual power plant by utilities.”

Far from being unique, this sounds a lot like the ‘virtual power plant’ concept being touted by LichtBlick and other developers in Germany.

Nevertheless, even if AMS’s concept is not as novel as the company thinks, a report out this week suggests it may have plenty of growth potential without leaving North America.

The GTM Research study North American Microgrids 2015 forecasts cumulative US microgrid capacity will reach 2.8GW by 2020.

More than 900MW of that is along the West Coast and in the Southwest, although Ryzhaya indicated AMS was not overly picky about where it develops new business.

“We think the application for what we do is really everywhere,” she said.

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