Global investment firm EQT is making its first American move through its new Transition Infrastructure strategy by acquiring microgrid developer Scale Microgrids.
New Jersey-based Scale is one of the microgrid sector’s biggest project builders with close to 250 MW of microgrid and community solar projects either in operation or construction. Scale Microgrids also has about 2.5 GW of distributed and community energy projects within its near-term pipeline, the company said.
No financial details were released on the EQT acquisition of Scale.
Formed about five years ago with early funding from private equity group Warburg Pincus, Scale Microgrids has developed into a vertically integrated firm which finances, designs, builds, owns and operates microgrids and distributed energy resource assets across North America. Among its microgrid client sectors include indoor farming in Pennsylvania, powering cold storage almond growers in California and municipal projects in Connecticut.
One of Scale's more prominent recent projects was the microgrid for Gallaudet University (pictured above) in Washington D.C.
Last year, the company expanded its portfolio through a 500-MW deal for community solar development in the U.S.
See MGK's Full Coverage of Scale Microgrids
“We are thrilled that Scale Microgrids will become EQT Transition Infrastructure’s first investment in North America, underscoring our commitment to driving the energy transition globally and supporting a decarbonized and climate-resilient future while addressing the accelerated electricity demand in North America,” Jan Vesely, partner and head of EQT Transition Infrastructure, said in a statement. “We see enormous potential to accelerate Scale’s growth and establish it as one of the market’s leading vertically integrated energy companies.”
One month ago, Sweden-based EQT announced its first Transition Infrastructure strategic deal with the investment in German battery energy storage develop ju:niz Energy. Overall, EQT owns close to 246 billion Euros in global assets (US$253B).
“Today marks the start of an exciting new chapter for our company,” Scale Microgrids CEO Ryan Goodman said. “EQT brings a depth of experience, resources and capital that will enable us to continue pursuing our vision to power the world with distributed energy. I’m incredibly proud of what our team has built and believe this transaction will enable us to unlock even greater opportunities for the customers, employees, and communities we serve. We’re appreciative of our past shareholders, led by Warburg Pincus, for their support in helping us get to where we are today.”
In December 2019, Warburg Pincus led a $300 million line of equity commitment to Scale, also helping the new company accelerate its business plan which now includes nearly 3 GW in total projects either completed, under construction or in the planning pipeline.
“Scale has achieved incredible growth over the past five years, establishing a strong reputation as one of the leading providers of next generation power infrastructure,” said Ryan Dalton, managing director at Warburg Pincus. “The company has successfully grown to nearly 3 GW of operating, in-construction and near-term pipeline assets, closed multiple financings to fund future project development and maintains a strong customer base. We look forward to watching the Company’s next phase of growth with EQT, and continuing their mission to provide cleaner, cheaper and more reliable power.”
Finalizing the EQT acquisition is still subject to acquisitional conditions and approvals.
Last month, Truist Bank announced it was providing a $150 million tax equity investment in Scale Microgrids. The funding will help Scale finance the construction of microgrids for commercial and industrial customers, as well as support the company’s relatively new move into community solar and battery storage facilities.
The projects funded by Truist’s investment are planned to be built over 18 months across the country in states such as California, Connecticut, New York and Pennsylvania.
The global microgrid market is forecast to perhaps more than triple over the next decade from $11.2 billion to $37 billion by 2032, according to Fortune Business Insights and other research firms. The sudden energy demand crisis spurred by data center growth as well as commercial and industrial electrification could push customers to contract for more distributed energy and microgrid-type resources near their facilities.
Major investment firms such as the Carlyle Group have committed financially to growing microgrid development in recent years. Carlyle and Schneider Electric are partnering on the AlphaStruxure joint venture to build large-scale microgrids for mission critical infrastructure customers. Huck Capital and Blackstone’s ClearGen also have joined with Schneider Electric on the GreenStruxure joint venture focused on smaller, commercial microgrids.
Learn more about the future of the microgrid industry at this spring’s Microgrid Knowledge Conference in Texas. Microgrid Conference 2025 will be April 15-17 at the Sheraton Dallas.
