The Great Stash and Industrial Stash are much worse than HOME-ESS. It is like starting in hell mode. HOME-ESS at least had some days of easy earnings.
Lately, the name of the company Fluence has frequently appeared in the media. They are clients of CATL and Farasis, and foreign customers also mention them from time to time. However, there haven’t been any in-depth articles about them in China. I feel like if we don’t quickly learn more about them, we won’t have any quality topics for discussion.
In this issue, I’ll take you to have a look at the excellent energy storage company Fluence Energy, Inc. (FLNC).
Basic Information about Fluence
In 2018, Siemens (OTCPK:SIEGY) and AES Energy (AES) established the joint venture company Fluence.
Fluence is headquartered in Arlington, Virginia, USA. It aims to develop large-scale modular energy storage hardware and related software for grid-connected and off-grid energy storage.
It is estimated that as of mid-2023, Fluence holds a 20% market share in utility-scale deployments (excluding China).
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In December 2020, the Qatar Investment Authority (QIA) invested $125 million in Fluence at an estimated valuation of approximately $1 billion (at a per-share price of about $6.76).
Starting from June 21, 2021, Fluence was listed on Nasdaq with an IPO valuation of approximately $4.8 billion (at a per-share price of $28), raising approximately $1 billion.
Financial Situation of Fluence
Fluence’s revenue has continued to grow, experiencing explosive growth of over 500% in 2020 and doubling from 2021 to 2023.
Fluence has been incurring continuous losses since its establishment in 2018. However, in 2023, despite significant growth, the losses have noticeably narrowed, indicating healthy and strategic losses.
Industry Favorable Factors for Fluence
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On one hand, thanks to the U.S. “Inflation Reduction Act,” energy storage systems can now benefit from a 30% investment tax credit provision.
The 2022 Inflation Reduction Act includes $369 billion allocated for addressing climate change and emissions reduction. This will significantly boost Fluence’s business in the short term.
It is projected that by 2030, the capacity of the U.S. energy storage market will increase by 20% (adding 14.3 GW), reaching 86.1 GW.
Furthermore, Fluence is building a manufacturing facility in the state of Utah, USA, with an expected start of production in 2024.
The reason for this is a significant policy advantage.
On the other hand, Fluence is expanding into the energy storage system market in Germany and the Nordic countries. The European Union’s goal is to achieve net-zero emissions by 2050.
Therefore, Fluence is expected to secure a significant number of orders in the European market.
Business Model of Fluence
Fluence Energy is actually engaged in two businesses:
1 The design and sale of battery energy storage hardware
In terms of hardware, Fluence’s products revolve around the Fluence Cube.
The Fluence Cube modular system is designed for scalability, allowing the combination of multiple cubes based on the client’s energy storage requirements.
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Product offerings include:
- Gridstack: Grid-scale energy storage product, ranging from 2 to 500+ MW, featuring flexible peak shaving capabilities, frequency regulation, and integration with renewable energy sources, with discharge durations of 1-6 hours.
- Ultrastack: Transmission network energy storage.
- Sunstack: Photovoltaic optimization and DC-coupled energy storage designed to enhance and expand solar power generation.
- Edgestack: Commercial and industrial energy storage products suitable for applications of 500+ kW, with minimal footprint and rapid deployment.
2 Energy storage and grid management software.
Fluence OS is a fully integrated control software used for managing and scheduling storage systems.
Fluence IQ is Fluence’s artificial intelligence platform that uses AI-driven automation to assist customers in increasing revenue and reducing risk through automated bidding.
The two flagship software products are Mosaic and Nispera.
- Mosaicis primarily used for intelligent bidding, optimizing revenue by feeding stored electricity into the grid at the most opportune times.
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- Nispera is used for asset management, including energy storage and energy production.
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Key Personnel at Fluence
· Herman Bulls
Chairman of the Board, Independent Director.
He holds a Master of Business Administration from Harvard Business School and a Bachelor of Science in Engineering from the United States Military Academy at West Point.
He completed nearly 12 years of active duty service in the U.S. Army. In 2008, he retired as a Colonel in the U.S. Army Reserve and received the Legion of Merit for his leadership and strategic thinking.
He has worked for over 30 years at Cushman & Wakefield.
· Julian Nebreda
President, Chief Executive Officer, and Director.
· Manavendra Sial
Chief Financial Officer, Senior Vice President.
· Rebecca Boll
Senior Vice President, Chief Product Officer.
Responsible for developing energy storage products and services, forecasting customer demands, and ensuring Fluence’s leadership in the energy storage industry.
Before joining Fluence, she served as the Chief Technology Officer of Schneider Electric’s Digital Buildings Business.
She worked at General Electric for 13 years, serving as the Chief Technology Officer for Licensing and Technology Risk. Prior to that, she held various leadership positions at General Electric Aviation, General Electric Global Research, and General Electric Power.
Ms. Boll’s career began in the U.S. Air Force, where she served as an electronic warfare officer on a reconnaissance aircraft called AWACS (Airborne Warning and Control System) for six years.
She earned a Bachelor’s degree in Applied Mathematics from Boston University and a Master’s degree in Human Relations from the University of Oklahoma.
· Carol Couch
Senior Vice President, Chief Supply Chain and Manufacturing Officer.
· Krishna Vanka
Senior Vice President and Chief Digital Officer.
Peers of Fluence
- Tesla（TSLA）
- Wartsila（OTCPK:WRTBF）（OTCPK:WRTBY）
- RES
- Powin Energy（OTCPK:PWON）
- Nidec ASI
Customers of Fluence
Customers include large utilities, financial enterprises, as well as industrial and commercial businesses.
Key Selling Points of Fluence
Fluence Energy’s key selling points include performance, safety, financeability, and supply chain resilience.
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From forward-looking energy storage initiatives in 2018 and the partnership between Siemens and AES Energy Capital, to going public with losses, and acquiring a software platform.
Indeed, their top-level design showcases a combination of forward-looking strategic vision, industry partnerships, and leveraging capital to create differentiation and competitive selling points.
