Generac Holdings, known for its backup generators, is continuing its expansion into distributed energy markets by agreeing to buy Enbala Power Networks, a virtual power plant company that makes optimization and control software.
Utilities and energy retailers use Enbala’s software to create and manage virtual power plants — aggregations of distributed resources like rooftop solar — the companies said this week, in announcing the deal, which they expect to close early next month.
“Distributed generation is a critical next step for utility companies faced with meeting peak demand while also dealing with capacity constraints and regulatory restrictions,” said Aaron Jagdfeld, Generac CEO.
With thousands of megawatts of installed residential and industrial standby generators in the United States, Generac’s products can be used in virtual power plant and distributed energy resource management system markets, according to the company.
Enbala’s software platform allows DERs to participate in distributed energy aggregation and control programs, providing potential revenue streams for the assets’ owners, Generac said.
Aggregated resources can include residential and commercial and industrial rooftop solar, behind-the-meter battery storage systems and electric vehicles, according to Generac.
Enbala and Generac will be able to use solar-plus-storage systems as well as Generac’s generators to help limit the need for new, central power plants and maintain the flexibility of diversified power production, Jagdfeld said.
Generac eyes new markets beyond standby units
Generac, based in Waukesha, Wisconsin, has recently focused on selling natural gas-fired generators and moving into markets beyond standby power.
Last year, the company jumped into the energy storage and monitoring markets by buying Pika Energy and Neurio Technologies for $49.1 million and $59.1 million, respectively. Pika makes energy storage systems and Neurio is an energy monitoring and control technology company.
Generac started selling energy storage systems, sized up to 34 kWh, to residential customers late last year.
“We believe the electric power landscape will undergo significant changes in the decade ahead as a result of rising utility rates, grid instability and power utility quality issues, environmental concerns, and the continuing performance and cost improvements in renewable energy and batteries,” Generac said in a filing with the Securities and Exchange Commission.
Generac expects on-site power generation from solar, wind, geothermal and natural gas generators to grow, along with the need to manage, monitor and store the electricity.
The energy storage and monitoring markets are growing quickly, driven by a desire to lower energy costs, Generac officials said in an investor presentation last month.
Also, power quality concerns are increasing as more extreme weather is stressing an aging grid, the officials said.
The company sees California as a major growth market for backup generation, partly because of utility shutoffs aimed at reducing wildfire risks, according to the presentation.
Generac’s acquisition of Enabla is expected to close within 30 days.
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