On Thursday, Verdant Microgrid, a Washington-based maker of modular, hyperlocal energy generation and storage systems, announced that it has received a $150 million financing agreement from ClearGen, an energy infrastructure credit investor owned by private equity giant Blackstone, to develop and scale microgrid technology across the U.S.
Verdant develops, designs, builds and operates distributed generation projects for leading global commercial and industrial customers. Its projects include solar, energy storage, combined heat and power systems, backup generators and other technologies.
The firm has become a fast-growing player in the emerging market for microgrids, a market that data from Navigant Research (provided by Verdant) has valued at nearly $31 billion by 2030–and possibly even higher, as prices of distributed energy sources drop and worries around severe weather and climate change, cyberattacks and other threats give rise to concern about grid safety and reliability. Navigant expects global microgrid capacity to reach 7.6 GW of energy by 2024, up from 1.4 GW in 2015, driven primarily by uptake in North America and Asia.
A Leap Forward for Microgrids
Under the terms of its partnership with ClearGen, new projects will be owned by ClearGen and operated and managed by Verdant. Energy produced by Verdant-made microgrids is sold to customers under a long-term Energy Service Agreements.
The collaboration will address the growing market for on-site, distributed generation using multiple clean energy technologies. Most customers, including, but not limited to, those in such industries as hospitals, hotels, data centers, warehouses, industrials, and agriculture realize significant energy cost reductions along with dramatically improved sustainability and reliability from the installation of microgrids.
“This new partnership with ClearGen will accelerate the growth of our business across the country,” said Verrdant Co-Founder Robert Babcock. “The key to bringing cost effective, on-site generation using renewable and other clean technologies to our target market is to integrate our designs with robust operators and financiers. This deal is a leap forward for the microgrid industry.”
Verdant says it currently has more than $500 million in projects in its business pipeline, with more than $50 million planning construction within the next nine months. ClearGen will work with Verdant to bring Blackstone and third-party capital to fund projects that meet the partnership’s investment criteria, within the $150 million framework.
“Our partnership with Verdant adds an important dimension to ClearGen’s capabilities. Verdant’s pipeline and ability to deliver results to customers, coupled with ClearGen’s access to capital, sets the groundwork for a highly productive relationship,” said ClearGen CEO Rob Howard.
The Verdant partnership marks ClearGen’s second major microgrid venture in recent weeks. In May, ClearGen said it would commit as much as $500 million to an Energy-as-a-Service (EaaS) joint venture of Schneider Electric and utility sector investment firm Huck Capital to build and operate on-site renewable energy microgrid systems for commercial and industrial clients.
