Oil major Royal Dutch Shell has bought German battery storage maker Sonnen and will seek to challenge Tesla and LG Chem for market leadership, with Australia becoming one of the key markets where that battle is to be fought.
The interest of Shell in cementing ties with Sonnen was revealed by RenewEconomy last week, and the purchase of all the shares in the company – rather than just an increased shareholding – was announced by Shell and Sonnen late on Friday Australia time.
It is a highly significant move for Shell, offering opportunities in home storage, grid-level storage and also with electric vehicles, where the company has recently made some key purchases in fast-charging developers, such as the US-based Greenlots.
It comes as another major oil giant, BP, released its annual energy outlook where it conceded – as some many other studies had previously – that renewables will become the dominance energy supply within 10 years.
BP’s prediction that renewables will account for 30 per cent of total generation around the world by 2030 is not particularly radical, compared with other analyses, but it confirms that Big Oil recognises the continued rapid demise of coal and declines in both gas and nuclear.
The Sonnen purchase was made through Shell’s New Energies Division, which has at its explicit purpose to make electricity – rather than the transport fuels on which its wealth was based – a major part of its business.
“Sonnen is one of the global leaders in smart, distributed energy storage systems and has a track record of customer-focused innovation. Full ownership of sonnen will allow us to offer more choice to customers seeking reliable, affordable and cleaner energy,” Mark Gainsborough, the executive vice president of New Energies at Shell, said in a statement.
“Together, we can accelerate the building of a customer-focused energy system in support of Shell’s strategy to offer more and cleaner energy solutions to customers.”
Sonnen has already created a significant presence in Germany, and a major virtual power plant. But its recent expansion has been focused on Australia, where it has established a manufacturing plant in the old Holden factory in Adelaide to service the state’s Home Battery Scheme.
Sonnen intends to produce 30,000 units a year from that facility and will use it as a base for further expansion into Asia.
Christoph Ostermann, the CEO and co-founder of Sonnen, said Shell was the “perfect partner” to support growth in a rapidly expanding market.
“With this investment we’re excited to help more households to become energy independent and benefit from new opportunities in the energy market. Shell will help drive the growth of Sonnen to a new level and help speed up the transformation of the energy system.”
Shell first invested in Sonnen in May last year, putting in $A95 million in a fifth-round fund-raising that Shell said at the time was focused on Sonnen’s expansion in Australia, and its all-in-one battery units, its virtual power plant expertise, and how it could be applied to the grid, and with electric vehicles.
The Australian battery storage market is currently dominated by Tesla, through its Powerwall offering, and LG Chem. Sonnen has sold 3,000 units in Australia so far, the head of Shell Australia, Zoe Yujnovich, said last week.
Shell is not the only big oil company to go into battery storage in a big way. France’s Total, which already owns a majority share in SunPower, paid $US1.2 billion to buy Safe and BP has been busy snapping up EV charging company Chargemaster and StoreDot.