AES & Siemens seek to dominate ‘energy network of tomorrow’ with Fluence

Siemens and AES are coming together to create one of the world’s largest energy storage solutions companies. The two giants in the space have created a joint venture called Fluence Energy, which will operate as a fully independent company across both firms’ global footprints.

It’s a strong indicator that energy storage has emerged has a critical component of the future of energy infrastructure. IHS Market predicts grid-connected energy storage will grow eightfold over the next six years to reach 28 GW of global installed capacity.

“Large scale generation and large connected grids are evolving in front of us. Our consumers today are no longer just interested in reliable and affordable electricity generation, they’re also interested in sustainable energy generation,” said Kevin Yates, head of Siemens’ energy management division for US and Canada, at a press conference announcing the JV. “And as our consumers drive us to look for more sustainable ways to generate electricity, it’s starting to create a distributed energy network. That distributed energy network can only be optimized through storage.”

Competition between battery manufacturers has ramped up considerably in recent years, and the sector has been further galvanized by media darling Telsa Energy’s recent announcement that it’s building a 100 MW (129 MWh) storage facility in South Australia, which will become that largest lithium-ion battery facility installation in the world once finished. To date, AES’s installation in San Diego holds that title.

A little competition is never a bad thing. As gas and coal plants around the world are decommissioned, energy storage solutions will become crucial for navigating the daunting transition to renewable energy sources. The Fluence announcement is more proof that there’s real economic opportunity for battery storage in the renewable energy transition. AES CEO and president Andres Gluski said battery prices have dropped 80% over the last six years. “That opens up storage to more uses,” he said, speaking at the event. “This can really transform the whole energy system.”

Battery storage rivals, including Samsung SDI and LG Chem have doubled down on production of battery storage solutions in response to market demand.

AES is a leading utility-scale battery provider, with over 200 MW of storage installed globally, and will contribute its expertise in energy storage solutions to the new company. The Advancion platform, now in its fourth iteration, is fuel-agnostic, and “can serve a variety of roles on the grid, including and in addition to renewable integration applications,” a spokesperson for AES told Technigraph. “We have seen a lot of interest recently in deploying storage with solar – AES’ 28MW solar & 20MW/5-hour storage under PPA to Hawaii’s KIUC is a great example — and discuss opportunities to do so with AES’ different business units, third party utilities and developers.”

Advancion also offers flexible peaking capacity as a cost-effective alternative to gas peaker plants, ancillary services such as frequency regulation, and improving transmission and distribution reliability.

Siemens will bring its commercial and industrial energy expertise to the Fluence JV, ranging from microgrid controllers and electrical distribution equipment, along with access to its large global base of electrical distribution customers across 160 markets.

The JV is another step in Siemens’ recent push into energy storage, and follows an announcement from earlier this year that Siemens had partnered with Eos Energy Storage for MW-scale installations. Siemens is already active in the microgrid sector, and offers a modular Siestorage platform for commercial and industrial applications.

“Siemens’ Siestorage platform supports additional applications, including microgrid and islanding applications, renewable hybrid technology, black-start capability, and consumer peak shaving,” the spokesperson said.

And while AES has focused solely on lithium-ion batteries, Siemens has worked on a number of non-lithium battery solutions — including a proprietary zinc hybrid cathode battery for long-duration storage, in partnership with Eos.

Gluski said AES and Siemens offer “very complementary” products, spanning both large and small customers, which will spell success for Fluence. “With Fluence, we will be the number one integrator of energy storage solutions in the world,” he said. “This will accelerate the integration of renewables into the energy network of tomorrow.”

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