North American and European utilities invested about $2.9 billion in 130 individual distributed energy companies since 2010, according to the report “Utility Investments in Distributed Energy” released by US market research company GTM Research.
Investments in distributed solar, which were more conspicuous in North America, came in at about $297 million to date, a volume that represents 18% of total investments.
Investments in energy storage reached $328 million, while the utility RED integration segment totaled $264 million. Direct consumer energy management accounts for the largest share with around $989 million in investments.
Although five of the seven most active utilities are located in Europe, U.S. companies are investing more heavily in distributed solar, the report notes. In fact, 22% of investments in distributed energy in North American were devoted to solar, while this percentage reached 14% in Europe. Investments in solar picked in 2013.
European utilities, however, seem to be more keen about investing in distributed energy with a volume of about $1.78 million, although the investments of North American power providers, which reached an amount of $1.1 million, were also not negligible. Of the $2.9 billion invested worldwide to date, $1 billion came from transactions which were closed in 2016 alone.
GTM Research stressed that the reason why European utilities are more active in this sector depends on the fact that their business models have been threatened by renewable and distributed energy earlier, compared to those based in North America or elsewhere.
Overall, 37 distributed energy companies were acquired by utilities worldwide to date. The company with the largest number of acquisitions of this kind is France-based Engie with a portfolio of 15 companies, followed by German power provider Eon (14), US-based Exelon (13) and Germany’s RWE (12).
Engie invested $491 million in this segment so far, while Eon, Exelon and RWE made investments in the amount of $344 million, $257 million, and $206 million, respectively. According to GTM Research, however, the volume of these investments could be higher “because investment amounts and acquisition prices are sometimes kept private.”