Microgrids require a hefty combination of technologies to execute properly. They also require software that can turn those distributed, behind-the-meter resources into multiple revenue streams in order to make that technology worth the investment. 

On Tuesday, PowerSecure, the provider of a 1.5-gigawatt fleet of backup power systems at grocery stores, data centers and military bases across the country, announced a partnership with Advanced Microgrid Solutions, the California startup that’s building more than 100 megawatts of utility-facing behind-the-meter battery systems. 

The strategic alliance will combine each company’s particular strengths in search of opportunities with existing and potential customers, as well as developing a collaboration to jointly build new products and services, said Advanced Microgrid Solutions President Kelly Warner in an interview. 

In particular, it will examine how batteries, not a big part of PowerSecure’s fleet today, could “make these distributed energy resources real-time dispatchable,” to capture opportunities in fast-responding grid markets as well as peak shaving, load shifting and other services. “That’s one of the things you would probably see in one of our combined solutions," said Warner.

All of this will help Southern Company, which bought PowerSecure for $431 million last year, expand its market share in the growing field of distributed energy resources (DERs).

“PowerSecure was really a significant step for us to move into distributed energy resources behind the meter,” said Mark Lantrip, CEO of Southern Company Services, the subsidiary that operates power distribution services for the multi-state utility. “The combination of PowerSecure and AMS is even more powerful for us.” 

Like many other utilities, Southern Company has been expanding investment in markets outside of its regulated arm, whether in the form of providing retail energy services in deregulated energy markets, or providing energy services for building owners. These companies have also been responsible for a large share of the acquisitions in the DER space, as evidenced by Enel Green Power’s $250 million acquisition of EnerNOC last week. 

While Southern Company hasn’t announced any investments with the new partnership yet, “we see significant growth opportunities across the U.S.,” said Lantrip. “This partnership with AMS gives us the opportunity to invest in these types of projects as they come along.” 

Each company has strengths and deficits to bring to the table, Warner said. AMS has largely built its fleet of lithium-ion battery-based systems to serve utility needs, starting with a contract to deliver 50 megawatts of flexible capacity resource to Southern California Edison, as part of the utility’s 200-plus megawatt procurement of DERs for local capacity in 2014. 

It has since added a 40-megawatt contract for SCE’s Preferred Resources Pilot, as well as a 4-megawatt project with San Diego Gas & Electric. Out-of-state efforts include a multi-megawatt partnership in Maine, working with startup Opus One Solutions and utility National Grid. 

AMS has also been announcing big customers interested in hosting its batteries and reaping the rewards, including Walmart and the Irvine Ranch Water District. To keep customer costs to a minimum, AMS has turned to Macquarie Capital, which pledged $200 million for the San Francisco-based startup’s projects last year. 

But AMS doesn't provide technology to keep its sites islanded during grid outages, Warner said. “PowerSecure provides us with a level of technical expertise around DERs and microgrids that, frankly, we don’t have.” 

PowerSecure, in turn, has largely custom-engineered a fleet of backup generators and on-site energy controls, built to provide a majority of a site’s power needs and keep it running during times of grid disruption.

“We have 17 years of experience in integrating various distributed energy resources together at a customer location, where you can island that customer from the grid, or switch them back and forth to optimize” the value of the installation, said PowerSecure CFO Eric Dupont.

PowerSecure also looks to peak shaving, demand-charge management, and other revenue streams to help lower cost to customers, said Dupont.

“It’s been about cost-effectiveness for us. AMS and its Armada platform” -- the software it’s built to optimize battery charge and discharge in sync with a utility’s local and system-wide grid needs -- “just bolsters the case for us.” 

The two companies have “come across joint opportunities, but we haven’t jointly developed anything together,” Dupont added. Most of PowerSecure’s customers are east of the Mississippi River, and AMS could help open up West Coast markets, he said. 

“We’re evaluating these kind of opportunities right now,” Warner said. “There’s the opportunity to optimize existing assets in the ground, or augment them with other technologies. Certainly a lot of our customers are interested in resiliency, and the kinds of services that PowerSecure has.” 

Tuesday’s partnership is good example of the cross-pollination going on in the behind-the-meter distributed energy field -- whether it’s in the small and specialized world of fully functional microgrids, or in the potentially huge field of aggregating rooftop solar, energy storage, demand response and building energy controls to serve both customer and grid needs.

We’ll be covering the latest developments on this front at this week’s Grid Edge World Forum 2017 conference in San Jose, California. Drop by if you have a chance.