Swell Energy has raised $120 million to further its virtual power plant (VPP) programs. The round was led by SoftBank Vision Fund 2 and Greenbacker Development Opportunities Fund I LP with participation from Ares Infrastructure Opportunities fund and Ontario Power Generation Pension Fund.
The funding will support Swell’s development of 600 MWh of VPPs through the deployment and integration of 26,000 energy storage systems located in homes and businesses across the United States. Swell VPPs provide a variety of grid service capabilities through projects in utility territories throughout Hawaii, California and New York.
Swell creates VPPs by linking utilities, customers and third-party service providers, and by aggregating and co-optimizing distributed energy resources through on Swell’s GridAmp software platform. In particular, working with utilities, Swell provides value to its network of customers through bill savings, GridRevenue and energy security, creating a cohesive network of solar-powered batteries that support overall grid reliability and stability, while possibly reducing grid operating costs.
“By coordinating distributed energy resources across the grid to intelligently meet changing demand, Swell’s AI- and machine learning-driven platform helps solve a a major challenge in the energy transition, while also lowering customers’ bills,” said Ben Parton, director of SoftBank Group. “We are excited to support Swell’s team as they accelerate clean energy adoption.”
“Swell’s business model is an innovative application of existing technology that directly addresses two major issues plaguing grid and renewable energy adoption: transmission and load shifting,” said Ben Baker, managing director and principal of the Greenbacker Development Opportunities Fund. “We could not be more pleased to partner with Swell, its impressive management team, and existing investor base. The company’s three vertical businesses – Grid Services, Finance, Development – are mutually beneficial, and together to rapidly expand the proliferation of renewable energy, providing value to customers and utilities.
In addition to project finance opportunities with existing utility partnerships, Swell also continues to grow in underserved markets where critical grid services need to be strengthened. and the infrastructure will be renewed. In regions where local grids need to change to accommodate more renewable energy and electric vehicle adoption, Swell’s VPP programs can provide increased grid flexibility while reducing the significant investment in the new generation of fossil fuels.
For these utilities, Swell increases the stock of dispatchable behind-the-meter assets, aggregates these assets for participation in grid services, and dispatches the distributed energy resources to generate continuous value for the grid, all while creating an improved experience for the customer. Swell analyzes and identifies unique utility needs and grid stress in each region, then delivers appropriate grid services through flexible energy storage solutions, load management assistance, balancing of renewable energy and ancillary grid services.
“Swell is leading the way in realizing the promise of virtual power plants, which we believe will be one of the most important and necessary advances in smart grid service technologies available,” commented Keith Derman, partner and co-head of Ares Infrastructure Strategy opportunities. “Ares has been working with Swell since raising its Series A in 2019, and we are excited to continue building on that relationship with this series of investments.”
“Utilities and investors have understood the importance of virtual power plants for some time now; this fund further signals that the capital markets see great value in this new asset class,” added Suleman Khan, CEO of Swell Energy. “Virtual power plants are the key to a cleaner energy future at scale. Using our GridAmp software, we are dedicated to accelerating a rapid transition to a carbon-neutral future that aligned with the needs of the utilities and the communities they serve.
This latest round of financing brings Swell’s total equity capitalization to date to $152 million, including previous investments made by a fund in Ares Infrastructure Opportunities, Aligned Climate Capital, Third Sphere and others. Citi is the sole placement agent for this transaction.
