Macquarie Capital in $200m US energy storage debut

The commitment gives it exclusive rights to the first 200MWh of projects that Advanced Microgrid Solutions will build.

Macquarie Capital has committed $200 million to energy storage company Advanced Microgrid Solutions (AMS) to build a portfolio of projects in California.

The Australian group made its first major US investment in energy storage off its balance sheet, sources said, and now has exclusive rights to the first 200MWh of projects that San Francisco-based AMS will build for commercial, industrial and government sites in California.

After they are built, Macquarie will own the projects, which will be used for utility grid services, including installing reserve capacity, solar integration, voltage management and backup generation. The projects will provide 300 MW/hours of capacity and demand management.

Some of the AMS projects backed by Macquarie Capital include a 50MW system for utility company Southern California Edison, to provide battery storage in the western Los Angeles Basin area. Irvine Company, a California real estate firm, will receive an energy storage deployment for its 24 offices. These projects will combine Tesla batteries with AMS’ software products.

Other projects in the pipeline include Opus One Solutions, Skyscraper One Maritime Plaza, California State University, Shell Energy North America and the Inland Empire Utilities Agency.

“AMS’s focus on contracted, grid-scale energy storage projects stands out amongst developers forging a path in the energy storage space,” added Rob Kupchak, head of US power, utilities and renewables at Macquarie Capital. “We see energy storage rapidly emerging as a growth market in the next generation of energy infrastructure.”

Sources close to Macquarie said energy storage is a sector the firm has identified as an opportunity for future investments. Ratings agency Standard & Poor’s (S&P) noted that 150GW of battery storage is needed to double to renewable energy capacity by 2030.

As the sector matures, companies are figuring out the best way to finance these types of ventures. According to Michael Wilkins, S&P’s head of infrastructure research, there are multiple revenue streams for energy storage investments, which create “increased flexibility”, but also poses the risk that projects will not fully realise their revenue potential.