Excelsior Energy Capital Enters Multiyear, 2.2 GWh Agreement with Fluence to Utilize Domestically Manufactured Battery Cells in US Energy Storage Projects

Rhea-AI Summary

Excelsior Energy Capital has entered a multiyear agreement with Fluence Energy Inc. (NASDAQ: FLNC) to develop 2.2 GWh of battery energy storage system (BESS) infrastructure across the United States, starting in 2025. The agreement focuses on utilizing domestically manufactured battery cells from Tennessee and Fluence battery modules from Utah, supporting American grid stability, manufacturing capacity, and supply chain strength.

This partnership aims to reduce battery supply risks, enhance local economies, and accelerate U.S. renewable energy infrastructure. The agreement follows Excelsior's recent announcements, including the sale of a 38-project portfolio to BlackRock, the launch of Lydian Energy, and a 2 GW agreement with Heliene Inc. for domestically produced photovoltaic modules.

Positive

• Secures 2.2 GWh of battery energy storage system infrastructure development
• Utilizes domestically manufactured battery cells and modules, supporting U.S. jobs and production capacity
• Reduces battery supply risks for Excelsior's projects
• Strengthens domestic supply chain for critical clean tech

Negative

• None.

Energy Storage Analyst

The agreement between Excelsior Energy Capital and Fluence for 2.2 GWh of battery energy storage systems (BESS) is a significant development in the U.S. energy storage market. This collaboration, set to commence in 2025, underscores the growing importance of energy storage in supporting grid resilience and the transition to renewable energy.

Key points to consider:

• The 2.2 GWh scale of the agreement is substantial, indicating a major commitment to energy storage deployment.
• The focus on domestic manufacturing in Tennessee and Utah aligns with efforts to strengthen the U.S. supply chain for critical clean tech components.
• This deal supports job creation and enhances local economies, potentially leading to positive economic ripple effects.

From an investor's perspective, this agreement signals Excelsior's strong position in the renewable energy infrastructure sector. The emphasis on domestic manufacturing could provide a competitive advantage by reducing supply chain risks and potentially benefiting from government incentives promoting U.S.-made clean energy technologies.

However, investors should also consider potential challenges, such as the evolving regulatory landscape for energy storage and the need for significant capital investment to bring these projects to fruition. The success of this venture will depend on factors like project execution, market demand for energy storage and the overall growth of renewable energy adoption in the U.S.

Supply Chain Expert

The agreement between Excelsior Energy Capital and Fluence represents a strategic move to localize the supply chain for critical energy storage components. This decision is particularly noteworthy given the recent global supply chain disruptions that have affected various industries, including the renewable energy sector.

Key supply chain implications:

• Risk mitigation: By sourcing battery cells and modules domestically, Excelsior is reducing its exposure to international supply chain risks, including geopolitical tensions, trade barriers and logistical challenges.
• Improved logistics: Proximity of manufacturing to project sites can lead to reduced transportation costs and shorter lead times, potentially accelerating project timelines.
• Quality control: Closer oversight of manufacturing processes may result in better quality control and easier resolution of any issues that arise.
• Sustainability: Localized production can reduce the carbon footprint associated with transportation, aligning with broader sustainability goals.

For investors, this approach to supply chain management demonstrates Excelsior's proactive risk management strategy. It may lead to more predictable project timelines and costs, which could translate to more stable returns. However, it's important to note that domestic manufacturing may come with higher labor costs compared to some international alternatives, which could impact overall project economics.

The success of this localized supply chain strategy will be a key factor to watch, as it could set a precedent for other players in the renewable energy sector and potentially influence future policy decisions regarding domestic manufacturing incentives for clean energy technologies.

Renewable Energy Market Analyst

Excelsior Energy Capital's series of strategic moves in 2024, culminating in this 2.2 GWh agreement with Fluence, paints a picture of a company aggressively positioning itself in the rapidly evolving renewable energy and energy storage markets. Let's break down the implications:

• Portfolio diversification: The sale of 38 solar and solar-plus-storage projects from Fund I to BlackRock suggests a strategic rebalancing of assets, potentially freeing up capital for new ventures.
• Vertical integration: The launch of Lydian Energy for developing solar and battery storage projects indicates a move towards greater control over the project pipeline.
• Supply chain security: Agreements with both Heliene Inc. for PV modules and now Fluence for battery storage demonstrate a concerted effort to secure critical components from domestic sources.

This multifaceted approach positions Excelsior as a vertically integrated player in the renewable energy space, with control over project development, component sourcing and potentially operation. For investors, this strategy could lead to several benefits:

• Reduced dependency on external suppliers and potential for improved margins
• Greater ability to capitalize on government incentives for domestic manufacturing
• Enhanced capacity to scale operations in response to market demand

However, this integrated approach also comes with risks, including increased capital requirements and exposure to potential market fluctuations across multiple segments of the renewable energy value chain. Investors should closely monitor Excelsior's execution of this strategy, particularly its ability to manage costs and deliver projects on time in a rapidly changing regulatory and technological landscape.

Overall, Excelsior's moves suggest a bullish outlook on the U.S. renewable energy and storage markets, backed by significant commitments to domestic manufacturing and project development. This positions the company to potentially benefit from the ongoing energy transition, but success will depend on effective execution and favorable policy environments supporting clean energy deployment.

Commencing in 2025, the agreement will support domestic grid resilience, manufacturing capacity, and supply chain strength.

EXCELSIOR, Minn.--(BUSINESS WIRE)-- Excelsior Energy Capital (“Excelsior” or “the firm”), a leading renewable energy infrastructure investor, today announced it has entered into a multiyear agreement with Fluence Energy Inc. (NASDAQ: FLNC), a global provider of energy storage systems, to develop 2.2 GWh of battery energy storage system (BESS) infrastructure in strategic markets across the United States. These projects, which will commence in 2025, will promote American grid stability and sustainable energy development while supporting domestic manufacturing.

Under the agreement, Excelsior will utilize battery cells primarily manufactured in Tennessee along with Fluence battery modules manufactured in Utah – fostering a more robust domestic supply chain for critical clean tech while directly supporting American jobs and battery storage production capacity.

“The U.S. grid needs energy storage at scale to support a reliable and clean future, and Excelsior’s commitment to Fluence and domestic manufacturing of batteries is a tangible expression of its efforts to participate in this future,” said Anne Marie Denman, Co-Founder and Partner of Excelsior Energy Capital. “The agreement also demonstrates our focused efforts to bring our supply chain for clean critical infrastructure closer to home, both derisking our investments and enhancing local economies.”

“Fluence is proud to support Excelsior on the deployment of 2.2 GWh of critical energy storage solutions that will accelerate meaningful U.S. renewable energy infrastructure and strengthen domestic battery storage manufacturing,” said John Zahurancik, Fluence President, Americas. “Sourcing battery cells and supply chains in proximity to power demand will improve logistics, reduce project risk, and enhance the sustainability of these investments.”

Supply chain disruptions from ongoing global conflicts, trade barriers, and other geopolitical uncertainties have impacted many industries, including the renewables sector. Energy storage is one of the key enabling technologies for ensuring a reliable power grid, so access to safe, high-quality, and low-risk energy supplies and products is critical.

“This agreement with Fluence will reduce battery supply risks for our projects, enabling us to fully realize the potential of our BESS investments and support the energy needs of local communities,” added Chris Frantz, Partner of Excelsior Energy Capital. “Together, we aim to leverage our combined expertise to drive sustainable growth and innovation in the energy sector.”

This agreement marks the latest announcement of Excelsior’s progress in 2024. In March, the firm announced the sale of a portfolio of 38 solar energy and solar plus storage projects from its Fund I portfolio to BlackRock’s Evergreen Infrastructure Partners Fund. In April, Excelsior announced the launch of Lydian Energy, a portfolio company developing a pipeline of solar and battery storage projects across North America. Later that month, Excelsior announced a 2 GW agreement with Heliene Inc. to use domestically produced photovoltaic modules for its solar energy infrastructure projects, furthering its commitment to U.S.-manufactured clean energy technology.

About Excelsior Energy Capital

Excelsior Energy Capital is a renewable energy infrastructure fund focused on middle-market investments in wind, solar and battery storage plants, and businesses across North America. The highly specialized team brings over 100 years of combined experience and a comprehensive set of strategic, financial, legal and operational expertise; making Excelsior Energy Capital a valuable partner for developers and operators, and a trusted manager for investors. Based in Minneapolis, Minnesota, the firm was founded in 2017 with two active funds totaling over $1 billion of equity capital. For more information, visit http://www.excelsiorcapital.com.

About Fluence

Fluence Energy, Inc. (Nasdaq: FLNC) is a global market leader in energy storage solutions and services, and optimization software for renewables and storage. With a presence in 47 markets globally, Fluence provides an ecosystem of offerings to drive the clean energy transition, including modular, scalable energy storage products, comprehensive service offerings, and AI-enabled optimization software for managing and optimizing renewables and storage from any provider. The Company is transforming the way we power our world by helping customers create more resilient and sustainable electric grids.

Disclosure: This material does not constitute an offer to sell or the solicitation of an offer to buy any securities. Securities managed by Excelsior Energy Capital (the “Firm”) are offered to select investors only by means of a complete offering memorandum and related subscription materials which contain significant additional information about the terms of an investment in the Fund (such documents, the “Offering Documents”). Any reproduction or other distribution of this material in whole or in part without the prior written consent of the Firm is prohibited. Opinions, estimates, and projections in this announcement constitute the current judgment of the Firm and are subject to change without notice.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730358384/en/

For media inquiries, please contact:

For Excelsior Energy Capital: Excelsior@backbaycommunications.com

For Fluence Energy: media.na@fluenceenergy.com

Source: Excelsior Energy Capital

FAQ

What is the size of the agreement between Excelsior Energy Capital and Fluence Energy Inc. (FLNC)?

Excelsior Energy Capital and Fluence Energy Inc. (FLNC) have entered into a multiyear agreement to develop 2.2 GWh of battery energy storage system (BESS) infrastructure across the United States.

When will the projects under the Excelsior-Fluence (FLNC) agreement commence?

The projects under the agreement between Excelsior Energy Capital and Fluence Energy Inc. (FLNC) will commence in 2025.

Where will the battery cells and modules be manufactured for the Excelsior-Fluence (FLNC) agreement?

The battery cells will be primarily manufactured in Tennessee, while Fluence (FLNC) battery modules will be manufactured in Utah.

What other recent announcements has Excelsior Energy Capital made in 2024?

In 2024, Excelsior announced the sale of a 38-project portfolio to BlackRock, launched Lydian Energy, and entered a 2 GW agreement with Heliene Inc. for domestically produced photovoltaic modules.