Schwarzenegger invests in battery storage, micro-grid startup

Greentech Media

Before last November, very few people had heard of Advanced Microgrid Solutions. But after winning a 50-megawatt contract to deliver storage services to Southern California Edison, the startup is pulling in some well-known backers and technology partners.

Three months after raising $8.8 million, Advanced Microgrid Solutions (AMS) has now closed its series A round with a total raise of $18 million.

AMS is planning to develop behind-the-meter storage systems in commercial and industrial buildings. But unlike most other distributed storage developers that are focused on customer control, AMS is offering utilities full control of the systems for grid services.

The first deployment, expected for 2016, will be a collection of batteries adding up to 10 megawatts of capacity. SCE will use the batteries to help shift load during peak times or to provide frequency regulation services. The system hosts will get compensated through reductions in demand charges in the middle of the day.

The round was led by DBL Investors, an in-demand venture capital firm that has made some of the most successful investments in cleantech and sustainability.

Nancy Pfund, the managing partner at DBL, recently joined forces with Ira Ehrenpreis, formerly a general partner with Technology Partners, to oversee a $400 million fund devoted to businesses making a social or environmental impact. Pfund and Ehrenpreis were both early backers of Tesla.

In an email to GTM, Pfund called the investment a “fitting sequel to our earlier investments such as Powerlight, Tesla and SolarCity.”

The company has no projects in operation. But it does have a strong and well-connected team — and a compelling story for utilities looking for more control over distributed energy systems.

Susan Kennedy, AMS’ chief executive, was a regulator at the California Public Utilities Commission in the early 2000s. She was also chief of staff to former California Governor Arnold Schwarzenegger.

Pfund called Kennedy “one of the most respected experts when it comes to the needs and capabilities of the next-generation grid.”

That clout helped bring Schwarzenegger on as an investor in the round, according to the Wall Street Journal.

With DBL Investors and Schwarzenegger as backers — along with a major supply agreement with Tesla — the company has emerged from stealth mode in a strong position.

Now that AMS has financial runway and a 50-megawatt contract, the company will need to prove it can perform the grid-balancing and peak-shaving services that utilities want. We won’t know whether AMS can live up to its vision until the first batch of battery stacks are operating for SCE in 2016.

If the executive team is any indication, AMS’ strength will be talking to utilities. Co-founder Jackalyne Pfannenstiel is the former chair of the California Energy Commission and a 20-year veteran of Pacific Gas & Electric. The other members of the development, strategy and analytics teams all have extensive experience in the utility space.

The series A round also included Engie SA, a large French electricity and gas provider.

“Tesla and a host of solar, software and other battery companies are poised to participate in this new collaboration — and AMS acts as an important, value-added integrator in this process,” Pfund wrote to GTM. “The investment from Engie, one of the world’s largest energy companies, attests to this shift.”

Listen to an interview with Nancy Pfund on The Energy Gang to hear how she thinks about investing in cleantech companies:

Source: Greentech Media. Reproduced with permission.