EDF Renewable Energy, a leading developer of large-scale wind and solar projects in the U.S., has entered the distributed energy arena with the launch of a new business unit named Distributed Electricity and Storage.
The new division is focused on deploying solar and energy storage projects up to 30 megawatts, and leveraging the experience of French-owned parent company EDF Group to provide a suite of products and services to commercial, industrial and utility customers.
Distributed Electricity and Storage (DES) was officially announced this week, but the unit has been in the works since last April, when EDF RE announced the acquisition of groSolar -- a developer and EPC provider with a successful track record of deploying C&I and municipal solar projects. Over the past 18 years, groSolar has built more than 2,000 projects with over 250 megawatts installed. The acquisition of groSolar served as a springboard for the new business, which is headed by industry veterans Tom Leyden, former CEO of Solar Grid Storage, and Felix Aguayo, former managing director at SunEdison.
“Felix and I bring to the group a long history of pioneering large commercial solar projects and see opportunity to benefit customers with the multiple use cases you have with storage,” said Leyden, in an interview. C&I and utility customers are currently missing out on the opportunity to improve their reliability and reduce costs by not taking a more holistic approach to their energy procurement and asset utilization, he said.
EDF RE is hardly the only company looking to develop a comprehensive DER strategy aimed at serving C&I customers in the U.S., though. Edison International recently rebranded its energy services arm Edison Energy. Duke has been active in the commercial space through REC Solar and a partnership with energy storage startup Green Charge Networks. Last spring, Green Charge was acquired by the European utility Engie, which has made several recent investments in distributed energy startups. GE has attempted to expand and streamline its DER business through Current. And then there's Tesla/SolarCity, which has been steadily moving into the commercial space.
EDF RE’s advantage in this competitive landscape is that the company has a broad spectrum of capabilities, “and if you integrate them well, there’s a lot more value to the end customer,” said Leyden.
“There are very few companies that can do it all -- solar in front of the meter and behind the meter, wind, energy storage, sophisticated controls, load management -- and…[still serve as] an electricity commodity supplier,” he said. “When you integrate these all together, the business model is much more powerful than any of these things separately.”
According to Leyden, the value play goes something like this: Solar reduces a customer’s overall energy demand, while storage is used to shape the customer’s load, reducing peak demand and costs associated with load volatility. EDF can then use its analytic capability to look at the customer’s newly shaped load profile and offer an attractive retail electricity price. Combine all of that with EDF’s sophisticated controls, and the customer’s load can also be used as an asset that’s bid into markets, like demand response.
These capabilities put EDF RE in a prime position to help companies looking to go 100 percent renewable -- of which there are a growing number -- achieve that goal in just a year or two, Leyden said.
DES has yet to complete a project that incorporates the full suite of services, but Leyden said that all components of the new business unit have been successfully executed by EDF and groSolar in some form. In partnership with EDF's North American affiliates, the company offers a complete array of services, including energy supply, hedging and risk management, as well as demand response, load management, and on- and offsite renewable generation. EDF RE has developed 9 gigawatts of wind, solar, bioenergy and storage projects in North America to date. And parent company EDF Group has deployed more than 300 megawatts (824 megawatt-hours) of storage projects worldwide.
Most of those energy storage projects are in Europe, but a few are in the U.S., such as the McHenry Storage Project in Illinois, which adds 40 megawatts of flexible capacity (20 megawatts nameplate) to the PJM Regional Transmission Organization and is currently participating in both the regulation and capacity markets.
EDF has very little distributed energy storage experience so far, however. There are also persistent financing challenges for C&I renewable energy projects, which have made it difficult for the sector to take off. As a result, there have been very few C&I solar-plus-storage deals to date, according to GTM Research’s Ravi Manghani. Given this market reality, it will be interesting to see how the DES group differentiates itself in the space.
One of EDF’s defining characteristics is that it’s patient, said Leyden. As a large international company with a strong balance sheet, EDF can afford to take some time to get the business model right -- at a time when the distributed energy sector is still very much in flux.
“I think there’s creative chaos going on in the energy storage and solar sectors,” Leyden said. “But I think in the next couple of years that will shake out, and it will be a really exciting time in the industry to position ourselves to play a much greater role in overall energy use.”