Gridmatic, an AI-enabled power marketer, today announces the launch of its first Energy Storage Fund, a US$50 million fund Gridmatic will use to oversee the management of up to 500 MW of battery capacity in the ERCOT and CAISO markets.
The fund is divided into two tranches, with the initial one successfully completed through a US$24.95 million investment from a leading energy investor. Using the fund, Gridmatic will establish multi-year offtake contracts with asset owners to operate energy storage using its AI algorithms. Gridmatic has already begun operating a 50MW / 100MWh battery storage system in Texas using the fund.
Gridmatic ensures secured revenue streams for developers' projects through offtake agreements, enabling them to obtain necessary financing. This, in turn, empowers storage developers to recycle their capital into the development of additional storage systems. Gridmatic is then able to maximise the returns of the contracted storage systems via its AI-enabled optimisation. The results are highlighted in Gridmatic’s storage report, showcasing a 46% increase in revenues when back-tested against actual results for storage systems in the ERCOT market in 2022. By decoupling project development and active management of the batteries, this structure de-risks the operational phase of a project for storage owners and supports the growth of the energy storage industry.
“Through offering a new kind of investment opportunity, this fund represents an advance in the energy storage finance sector,” said David Miller, Vice President of Business Development for Gridmatic. “The growth of renewables, as well as extreme weather, have led to increasing energy market volatility. Battery energy storage has emerged as a critical technology to provide stabilising services to the grid. By participating in our fund, investors can capitalise on this volatility without the responsibility of managing an entire battery project or development platform.”
Gridmatic's fund opens up a new asset class for investors, providing an opportunity to actively invest in the thriving energy storage market. The sector's growth is expected to be further accelerated by the introduction of the Inflation Reduction Act (IRA).
