AEP invests $5M in storage software company Greensmith
- American Electric Power has invested $5 million in Greensmith, a Maryland-based company that offers software to operate and manage energy storage systems, Greentech Media reports. Greensmith closed its latest funding round with $12.3 million, bringing its funding total to about $20 million.
- The move signals a strategy shift for AEP, which was one of the first utilities to test energy storage last decade, GTM analyst Ravi Manghani pointed out. Greensmith's software platform could allow the utility to monetize the various value streams that storage offers on the distribution system, he said.
- About two-thirds of Greensmith's customers are electric utilities, including Hawaiian Electric, San Diego Gas & Electric, and Sacramento Municipal Utility District. It has incorporated a dozen different types of batteries into its software, including multiple types of lithium ion chemistries, sodium ion, and zinc redox designs.
Since 2009, Greensmith has helped install 50 storage systems for more than 20 customers, Bloomberg reports. Its business model focuses on combining its proprietary control software with different types of batteries, creating turnkey storage solutions that can be easily integrated on a utility's grid.
"At our core, we are a software developer with design and integration capability," CEO John Jung told Greentech Media. "If you don't understand the technology involved or understand the grid interconnection — then you don't really understand how to build storage-system software."
The company already has some significant projects under its belt, including a number of storage facilities in production for San Diego Gas & Electric that will perform solar PV smoothing, load shifting, and voltage control, among other functions. In one of its earlier projects, Greensmith devised a storage solution to integrate a solar array and electric vehicle charging station for Hawaiian Electric.
Greentech points out that the company has also gotten in on the behind-the-meter storage market with 1 MW battery systems in Puerto Rico and Ohio — much larger than is usually used for behind-the-meter functions.
Whether and how AEP will utilize Greensmith's storage solutions remains to be seen. In the past, the utility was more focused on relatively small community energy storage pilots close to load centers in its Ohio territory, GTM's Manghani said. While those pilots were around the 100 kW scale, the utility could use Greensmith's expertise to move up to larger, megawatt-scale batteries.
Capturing all of the potential value streams associated with energy storage is a critical challenge for utilities. Their ability to do so will have a significant impact on the proliferation of storage on the grid.
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