Fluence buys bidding software firm AMS in high speed push to energy transition

Battery storage technology provider Fluence has acquired leading bidding software company AMS in a new push to introduce sophisticated and high speed bidding technology into more renewable energy and storage assets.

AMS, backed by actor and former California governor Arnold Schwarzenegger, has already made a mark in the world’s most advanced clean energy transition markets – Australia and California – and is delivering its AI-enabled automated bidding software package to more than 1.7GW of wind and solar projects in Australia, and says it has a pipeline of 2.4GW more, including battery storage.

AMS says its software has already delivered a 12 per cent increase in revenue for its clients, such as Tilt Renewables, and Fluence expects the automated bidding to reduce the pay-back on battery storage installations to between 2 and 3 years, by allowing batteries to maximise the potential from multiple energy and grid services markets.

Australia is a favoured destination because of the amount of wind and solar entering the grid, the volatility of the local markets, the absence of capacity and day ahead markets, and the introduction next year of 5-minute settlements. On top of this, the market rules are being re-written to favour new and fast-acting technologies.

“Our century-old power system is stressed. Renewable energy and energy storage are the solution,” said Brett Galura, chief technology officer at Fluence. “AMS has developed one of the most powerful AI- enabled software engines available in the industry.”

Fluence – a joint venture of global energy giant Siemens and US-based AES – has already installed several battery storage projects in Australia, including Ballarat (30MW/30MWh) and the yet-to-be-commissioned Lincoln Gap (10MW/10MWh), and is working on a number of other yet to be announced projects, and pushing for “virtual transmission” battery storage projects.

The two companies say the energy markets – with the growing uptake of wind and solar, the rapid response of inverter technologies and the growing complexity of “flexible” markets is making the case for more battery storage irrestisible.

Fluence says its latest generation “tech stack” is reducing balance of system costs for energy storage by up to 25 per cent, and AMS says AI-enabled software can increase revenue from battery energy storage by more than 100 percent, lifting internal rates of return to 30 to 40 per cent a year.

AMS says energy markets are becoming increasingly complex, and more so for battery storage installations which can be incredibly versatile. There are eight or nine energy and grid services (frequency control) markets and almost 18 products that need to be traded every five minutes.

“You don’t just want to be looking at the next five minutes, you want to be looking at your opportunity costs across the trading day,” AMS chief executive Seyed Madaeni told RenewEconomy in an interview.

“So that ends up to be millions of decisions that you to need to make every five minutes, and that requires advance AI machine leaning for predicting market prices and building a state of the art optimisation engine that makes decision.

The deal between Fluence and AMS has been more than a year in the making, and follows a period of working together when the benefits of a buyout, and a joint push into the wind, solar and battery storage markets became obvious.

The two companies also say the combination of the two companies’ technologies will help utilities, developers, and commercial and industrial customers optimize energy storage and flexible assets to deliver additional revenue, improve grid reliability and efficiency, and support the global transition to more sustainable and resilient power systems.

Financial details of the transaction were not released, and it is not clear whether the transaction was cash-based, or if AMS shareholders such as Schwarzenegger will emerge with stakes in the combined entity.