South Korean industrial conglomerate Doosan has acquired Seattle-based 1Energy Systems for its distributed energy resource platform -- and to gain access to the North American market.
1Energy will be renamed Doosan GridTech and will be a subsidiary of Doosan Heavy Industries, which primarily builds energy and water generation projects. It is Doosan’s first acquisition squarely focused on the distribution system and part of a larger strategy by the 120-year-old company to move into distributed and renewable energy. 1Energy was a GTM Grid Edge awardee for 2016.
“Doosan’s global customers are confronting two critical, long-term trends: increased electrification of the world’s energy systems driven by public policies to reduce carbon emissions and the declining costs of technology, especially renewable energy and battery storage,” Ji Taik Chung, DHIC vice chairman and COO, said in a statement. “1Energy’s technologies directly address these trends and perfectly complement Doosan’s existing power generation solutions.”
1Energy’s technology began as an energy storage management software solution based on open standards to help utilities integrate grid-scale storage onto their systems. While storage is still the primary focus, 1Energy launched its own version of a distributed energy management system last fall, DERO. The DERO system integrates utility-scale storage with various behind-the-meter assets.
Snohomish County Public Utility District was first to test both its energy storage management software and DERO. 1Energy is also working with utilities such as Duke Energy and Austin Energy, and has about 30 megawatts of energy storage projects using its platform.
1Energy leads the Modular Energy Storage Architecture (MESA) Alliance, which brings together a growing roster of battery and inverter makers, grid vendors and utilities. The MESA Device specification, developed in partnership with the SunSpec Alliance, is meant to allow batteries, inverters and other energy storage components to interoperate smoothly.
Doosan bought 1Energy for that company's burgeoning list of U.S. utility clients, as well as the open-standards DERO platform. “We view 1Energy -- backed by its superior, actionable intelligence -- as a critical component of enabling the grid of the future and in alignment with Doosan’s global growth trajectory,” Daejin Choi, the new CEO of Doosan GridTech, said in a statement. Doosan GridTech will remain headquartered in Seattle.
For 1Energy, the acquisition was the right fit, as the startup could not scale up fast enough to meet growing customer demand. “We really believe we found a partner that shared our vision for a grid that’s more digital, more distributed and more dynamic,” said Rogers Weed, VP of product management for 1Energy Systems.
Weed said that as a small, employee-owned company of about 25 people, staying on top of the changes happening across the country had been challenging. And although they see applications worldwide, the focus will continue to be on the U.S. because that is where Doosan wants to expand.
Doosan GridTech will be able to tackle different market segments beyond just distribution utilities, said Weed, including independent power producers and maybe even commercial clients, though that is a lower priority given how many competitors already serve that slice of the market.
With Doosan, a conglomerate with around $17 billion in annual revenue, behind it, Doosan GridTech shifts from a startup competing with the likes of Greensmith and Geli to a major player that could scale to compete with legacy players such as GE, Schneider Electric, ABB and Siemens in offering DERMS technology, especially where the focus is on storage.
"As the storage market matures, software will become increasingly important on one hand as multiple use cases are stacked up, but on the flip side, software vendors won't have the luxury to treat each project as if it's one of a kind," said Ravi Manghani, director of energy storage for GTM Research. "This is why scaling at speed is becoming an important differentiator, and this acquisition fits in. Doosan gains from 1Energy's core software integration expertise, while 1Energy achieves immense bankability overnight."
“This puts us in an interesting in-between spot,” said Weed. “We now have the size and stability because we’re part of a big organization, but we don’t have the legacy businesses that slow down our ability to innovate.”
Doosan would not disclose what it paid for 1Energy. The acquisition closed on June 30.