Investment firm Carlyle has been busy on the road to renewables. It all started in 2017, when it became the first big company in the private equity space to commit to carbon neutrality; by 2019, it had also launched a team focused on renewable investment. Putting money into sustainable energy companies has now become Carlyle’s bread and butter, with $1.2 billion invested in the past two years and more than $100 million in “complementary growth” investments over the past several months alone – in addition to announcing a 2050 net-zero target for its portfolio companies. As Chief Investment Officer for the firm’s Infrastructure Group, Pooja Goyal, reflected in the January press release for the two newest investments, “[t]here is a large and growing investment opportunity in building the renewable energy capacity required to power a lower-carbon grid.”
NineDot Energy, one of these recent recipients headquartered in New York City, creates community-scale clean energy technologies. One area where it is poised to make a huge splash is in battery storage: the company purchases tiny spaces in boroughs like the Bronx, Long Island, Staten Island, and Queens, where it gets batteries up, running, and connected to the grid, with power that is then available for purchase locally. Staten Island’s two fuel cell generation host sites generate 7,500 kilowatts of power for 25,000 residents. NineDot is also at the forefront of clean energy innovation, launching new partnerships and teaming up with existing businesses to test cutting-edge ideas in other fields, like combined heat and power, distributed wind, micro-hydro, and vehicle-to-grid. Perhaps this is no surprise, given that it took its name from “the NineDot problem,” which requires participants to think outside the box.
While it may be surprising that Carlyle invested so much money in a company that was only founded in 2015, it is clear why the company has so much faith in NineDot. New York is actively encouraging such projects on its quest to reach 100 percent clean energy by 2040 – including 6 GW of energy storage and 10 GW of distributed solar projects by 2030 – which means that a company like NineDot is even more valuable. And NineDot has lofty goals for itself, including the goal to build 1,600 MW hours of clean energy systems over the next four years. It will use the investment dollars provided by Carlyle to build twelve electric battery sites across the city, each about the size of a basketball court, as well as to “further advance its leadership position in providing community clean energy solutions in New York and beyond,” according to CEO David Arfin.
Carlyle’s other investment, Fermata Energy, offers bidirectional charging technology for electric vehicles through a Vehicle-to-Everything, or V2X, platform. EV owners can use the electricity from their car batteries for alternative purposes when they are not driving – to help power a home, building or make some money by selling it to a utility company for use in the grid. Like NineDot’s technology, Fermata’s will contribute to energy infrastructure that will be more renewable and resilient. As CEO David Slutzky reminisces, “[w]hen I set out to create a company that accelerated the adoption of EVs by making them more affordable, while at the same time fortifying the electric grid, I did not imagine how quickly this technology would take off, and how important our technology would prove to be.” Interestingly enough, Fermata Energy and NineDot are also directly collaborating on a vehicle-to-grid project for ride-share company Revel, helping it to transfer the energy stored in its all-electric fleet into the grid using Fermata’s chargers and technology; Revel’s first Superhub in Brooklyn is expected to be one of many across the city.
Fermata is a bit more established than NineDot, founded five years before, with the added benefit of already having connections across the auto industry via collaborations with Ford and Nissan. Its products, however, will still certainly benefit from Carlyle’s support for expansion. Carlyle is not the only firm to see value here: Verizon Ventures is another new investor that participated in Fermata’s recent $40 million fundraise. Fermata will use these funds to make sure their chargers and software can easily transfer power and thus “make EVs more affordable, help fortify the electric grid, and create positive climate action,” according to Slutzky. And that is certainly a goal worth pursuing.