Engie is taking a further step in the deployment of its activities across the Atlantic. The energy company announces the acquisition of Broad Reach Power, a young company specializing in battery storage. Engie takes over 100% of the capital of the company, previously held by two American investment funds, Apollo and EnCap, for an enterprise value of 1.6 billion dollars. “The flexibility provided by batteries is essential to the development of renewable energies. Flexibility is the ability to store electricity when it is produced to reinject it into the network when consumers need it. It is also a price optimization tool for producers,” explains Sébastien Arbola, Deputy Managing Director in charge of Fex Gen and retail activities at Engie.
Broad Reach Power is a young company, created in 2019, which employs around fifty people, including specialists in market operations. Essential skills to optimize the use of batteries according to changes in market prices and “market nodes”. However, the electricity market is not unified. Even within a state like Texas (a little larger than France) there can be different prices at a given time. An operator therefore has every interest in marketing its electricity where it is the most expensive. What Broad Reach Power will allow Engie to do on a larger scale, by optimizing the production and sale of electricity from its own American wind and solar farms. The two companies are indeed both present in the same geographies: in Texas and to a lesser extent in California. Broad Reach Power has 350 MW already in operation in Texas and California and 880 MW is under construction and will be in operation by the end of next year. Finally, 1700 MW are in “advanced development” for commissioning in 2025/2026. For its part, Engie already has 6,200 MW of solar and photovoltaic energy production capacity in the United States, in operation or under construction.
“This is a very important purchase for the years to come. Batteries make it possible to transform market disruptions linked to climate change or problems with competitors into an asset,” summarizes Sébastien Arbola. During periods of strong sunlight, solar electricity prices can be negative. This was the case in the Netherlands in June, with prices that fell to -200 euros per megawatt hour. Such a scenario would therefore allow operators with batteries to be paid to charge them! Both heat waves and extreme cold spells make storage necessary in areas where renewable energies are already well established. This is the case of California, Texas and also Australia, Italy or the United Kingdom. The French case is somewhat different. With its nuclear power plants, but also gas, and its hydraulic dams, the country has much more flexibility in the production of its electricity, making the development of large battery storage units less relevant.
