August 7, 2020 Read More →

AES: Battery storage revenue at Fluence joint venture will top $3 billion annually by 2025

Platts:

AES Corp. expects Fluence Energy LLC, its energy storage partnership with Siemens AG, to generate $500 million in revenue this year and $3 billion per year by 2025 as decarbonization efforts expand worldwide.

In June, Fluence launched a sixth-generation “standardized technology stack” that AES said is easy to “rapidly and cost-effectively deploy.” It said the modular design enables scale from 1-MW to 1-GW systems and said in its second-quarter earnings presentation Aug. 6 that it has 800 MW of orders already lined up. Fluence had a 1.6-GW backlog of energy storage projects as of the end of the second quarter.

AES President and CEO Andres Gluski said AES and Siemens are looking for a financial investor to take a roughly 10% stake in Fluence. “We would like to have a marker from a transaction” to help determine Fluence’s value ahead of a potential IPO in two to three years, Gluski said.

Meanwhile, the coronavirus pandemic and its impact on second-quarter results did not turn out to be as “severe” as AES had initially feared, leaving the company room to pursue the decarbonization of its global assets.

Gluski told analysts that AES is pursuing decarbonization of its asset base while it is anticipating using $550 million in asset sales as part of its 2020 parent capital allocation plan. Gluski noted that at the end of 2019, AES saw 45% of its megawatt-hours of generation come from coal-fired facilities, but that dropped to 34% by August 2020. It is expecting a further drop to 30% by the end of 2020 and a decline to 10% by year-end 2030.

The company said it has a 6.2-GW backlog of renewables, 59% of which is secured under contracts. AES told analysts that 40% of the backlog is wind projects, 38% is solar, 13% is storage and 9% is hydroelectric.

[Jeffrey Ryser]

More: AES sees revenues from Fluence storage venture soaring

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