Schneider and Carlyle Form New Venture to Pursue Fast-Growing Energy Infrastructure and Microgrid Market

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The Carlyle Group and Schneider Electric today announced a new joint venture, AlphaStruxure, to pursue what they see as a $1 trillion underinvestment in US infrastructure and a fast-growing market for microgrids.

The venture is launching with a crown-jewel project: New York Gov. Andrew Cuomo’s $13 billion JFK Airport modernization, which incorporates multiple microgrids to move the facility toward 100% renewable energy within the next decade.

AlphaStruxure

AlphaStruxure will bring multiple microgrids to JFK Airport. By PitK/Shutterstock.com

AlphaStruxure also is working on the Lone Star Ports Harbor Island Crude Export Terminal, a project under development in Corpus Christi, Texas, which also will use microgrid technology.

“This market is much larger and much faster moving than any of us had anticipated” — Andrew Marino, The Carlyle Group

The Carlyle Group, a private equity giant, brings financing know-how to AlphaStruxure, while Schneider offers its energy and automation expertise. The venture builds on an existing alliance formed in 2017 between Schneider, The Carlyle Group, and Dynamic Energy Networks around energy-as-a-service (EaaS), a platform that allows customers to own and operate microgrids without capital outlay.

Emerging trend in microgrids

“One of the things we all realized is that this market is much larger and much faster moving than any of us had anticipated,” said Andrew Marino, managing director and co-head of Carlyle’s global infrastructure team. “So we’re putting all hands to the tiller to lean into this as much as we can.”

Formation of AlphaStruxure marks an emerging trend in the industry toward incorporating microgrids in the context of larger infrastructure investments.

Marino said that infrastructure redevelopment and energy improvement are becoming intertwined.

“I think it’s a natural progression of the broader mega trend around clean power,” he said “The sophisticated consumers are requiring an entire management system for their energy so that they can balance different sources of energy with maximum renewables, but in a way that is efficient economically.”

The JFK project, a modernization of the terminal still in its early stages, offers an example, he said.

energy-as-a-service

The Carlyle Group’s Andrew Marino and DEN’s Karen Morgan at Microgrid 2018 in Chicago. Morgan will moderate a panel on microgrid financing at Microgrid 2019

“What does the state of New York want? They want a resilient power solution — they don’t want an Atlanta-Hartsfield interruption,” he said. “Two, it’s no secret that New York likes pure renewable energy. So we have to have a very high percentage of renewable power at JFK.”

To make both happen efficiently, the airport needs an integrated system that manages power load in a smart way — microgrids. The JFK microgrids will be part of broader energy solution that integrates systems for baggage handling, people movement, retail, lighting, heating and cooling and power generation, he added.

The venture also is working on the Lone Star Ports in Texas, which is being designed as the deepest water, crude oil export facility in the country. AlphaStruxure came into the project as as result of a joint development deal between Carlyle and the Port of Corpus Christi. Carlyle will operate the facility under a 50-year lease. AlphaStruxure brings automation, power, renewable energy and a microgrid to the port.

Incorporates Schneider’s EAAS

In addition to working on development and execution of infrastructure projects, the company will focus on stand-alone EAAS microgrids, said Juan Macias, CEO of AlphaStruxure. Macias was previously senior vice president of energy automation and digital energy solutions at Schneider.

Schneider also will continue to develop microgrids outside of the venture. “We do microgrids as capital projects on a regular basis for customers all across the world, and we will continue to do them. Sometimes they will be large infrastructure projects that we do with the Carlyle group,” Macias said.

AlphaStruxure is being jointly managed and controlled by Carlyle and Schneider, which brings Schneider’s intellectual property to investments Carlyle makes in infrastructure.

“We are going to work with this joint venture on all of our investments in infrastructure,” Marino said. “The AlphaStruxure team will be alongside of us in designing and opining on the structure of all of our deals.”

The new venture is tapping into what’s seen as delayed investment and rising maintenance costs at US airports, seaports, water treatment facilities and other infrastructure. McKinsey, a global management consulting firm, has found that the US needs to invest $150 billion per year between 2017 and 2030 to upgrade its infrastructure.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. Team:
    I have an idea that holds a huge potentials for all. It’s a Cooperatively owned power.

    This is how it could be delivered. I have identified a captive market. We share the venture with the market by giving them, say 10 – 20% of the venture in exchange for among other negotiated items like land space, regulatory compliance acquisition, tariffs, etc. in addition to the locked down market.

    What Is need now is an investor that recognizes that electricity is a utility, and as such, is a long term business.. Not a quick or short payback period business.

    Who would team up with us?

    • DERRICK LANDERS says:

      It makes sense, but most investors can’t or won’t tie up their funds for such a concept…that’s the problem.

  2. DERRICK LANDERS says:

    The Carlyle Group is smart in that they are going the IPP route (with sophisticated and knowledgeable partners) instead of trying to convince politicans and other public servants of the saviness of these infrastrucutre concepts [as they relate to energy, islanding, distributed energy and microgrids].

Trackbacks

  1. […] California. In addition, Schneider’s recently announced joint venture with The Carlyle Group, AlphaStruxure, is developing multiple microgrids as part of the modernization of JFK Airport in New […]

  2. […] an interview with Juan Macias, CEO of AlphaStruxure, and Mark Feasal, vice president, smart grid, Schneider Electric, we learn about the microgrid and […]

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