The energy storage market is slated to grow 10 folds between 2016 to 2022, in the U.S. alone.
German engineering conglomerate along with American energy firm AES Corp, have formed a joint venture to service the rapidly expanding energy storage market.
Demand for large-scale energy storage is growing rapidly and the price of advanced batteries are tumbling with countries across the globe turning to renewable energy sources, including solar and wind energy.
Pairing big batteries and other storage systems with renewable energy is likely to improve reliability while minimizing climate related emissions.
The 50-50 joint venture, called Fluence, will sell the lithium-ion battery technologies currently sold by AES and Siemens respectively.
“Right now this is a very fragmented market. You’re bringing together two of the leaders,” said Andres Gluski, AES’ Chief Executive.
While Siemens typically targets individual companies and enterprises, including hospitals and universities, AES’ targets government contracts that require large arrays that can be incorporated into a region’s electrical grid.
According to a report prepared this year by U.S. Energy Storage Monitor, the energy storage market in the U.S. alone is expected to surge at least 10 folds, between 2016 to 2022, to $3.2 billion.
As per Kevin Yates, president of Siemens’ energy management division, Siemens and AES currently account for around 17% of installed energy storage.
The joint venture will be headquartered in Washington, D.C., and will have offices in Germany and other international locations.
AES subsidiary AES Energy Storage and Siemens’ battery-based energy storage solutions group will be merged into Fluence, which will operate independently of its two owners.
Both companies expect the deal to close in the fourth quarter, subject to regulatory approval.