The world’s five largest BESS integrators have been revealed – now the battle for market share will intensify, with supply chain challenges, perceptions of fire risk, and records on safety all set to influence future success.
Wärtsilä has shown resilience amid challenging market conditions and looks well-placed to consolidate
New data published by S&P Global has revealed the five largest battery energy storage system (BESS) integrators in the world. Together, the top five have installed more than a quarter of the energy storage currently in operation globally. The top five in terms of installed projects (that is, projects completed as of July 2023) are, in descending order: Sungrow, Fluence, Tesla, Wärtsilä and Hyperstrong. However, there are indications that Fluence will take over as the global leader, while Wärtsilä will also significantly increase its market share, largely at the expense of Tesla. When measured in terms of global pipeline (that is, installed and contracted projects), the top five integrators, according to S&P, are (in descending order): Fluence, Sungrow, Wärtsilä, Tesla and Hyperstrong.
In a nutshell, the key role of a BESS integrator is to maximise profits, while ensuring reliable and safe delivery and operation. The leading integrators are characterised by having strong supply chain networks and effective strategies for implementing clients’ immediate and future plans for their assets. They also have the financial clout to provide support for their clients over the long-term, according to the Energy Storage World Forum.
The emergence of Sungrow and Hyperstrong are seen as evidence of the rise to prominence of Chinese system integrators. The mainland China battery market grew by 400 per cent in 2022, and is exclusively supplied by local players, but now Chinese players are turning their attentions to overseas expansion and the indications are that this push will be successful given the competitively priced products they offer.
So, what’s next for the ‘Big Five’?
With regard to the outlook for the big five integrators, Fluence is expected to establish itself as the clear market leader, in large part due to its safety record and reputation for deploying storage assets quickly. Meanwhile, Wärtsilä is viewed as having weathered the storm of supply chain challenges better than many competitors and is therefore well positioned to grow market share. There is, however, a view that Tesla may lose ground to its main rivals, with storage-related revenues having contracted in recent times. Here, Tamarindo’s Energy Storage Report looks at the short term outlook for the big five integrators:
Fluence has a track record of being the integrator of choice for ground-breaking energy storage projects. Last month, it was revealed that the US-headquartered integrator had been selected by Tilt Renewables to deliver the 100 MW / 200 MWh Latrobe Valley battery energy storage system (BESS) located south of Morwell in Victoria. It was a clear indication of Fluence’s strong position in the market given that it was selected by Tilt for what will be the first “privately funded storage project in Australia to be incorporated into an exclusively renewable generation fleet”. Indeed, the Tilt project is pioneering in many ways, being Tilt’s first energy storage system in Australia and the first of Fluence’s assets to use the “full Fluence product ecosystem,” which includes the ‘Gridstack’ grid-scale energy storage product, the ‘Mosaic’ AI-powered bidding software, and the asset performance management software, ‘Nispera’, a company statement said. Also last month, Fluence was chosen by Statkraft to deliver Statkraft’s first battery-based energy storage project connected directly to the transmission network in Renfrewshire Scotland. Fluence is set to consolidate its position as a market leader having gained a hard-won reputation for its safety standards, market experience and speed of its deployments. With regard to the issue of safety, last month Fluence received a TM-2 Certificate of Approval in New York City for its 6th generation energy storage product, becoming one of the few storage system providers to meet strict safety requirements set by the Fire Department of New York. This is no mean feat considering the close attention the New York authorities are paying to energy storage fire safety – in August this year, New York state governor Kathy Hochul announced the creation of an ‘Inter-Agency Fire Safety Working Group’, which will aim to ensure the safety and security of energy storage systems across the state, following fire incidents at facilities in Jefferson, Orange, and Suffolk Counties this summer. Fluence anticipates rapid global expansion and with this in mind, the company recently announced the opening of a new global operations centre in Bangalore. The Fluence India Innovation Centre will serve as a “centre of excellence to support Fluence’s rapid projected growth”, the company said. The outlook is bright and the company recently increased its fiscal year 2023 total revenue guidance range to $2.0 billion-$2.1 billion.
In August this year, Sungrow signed a deal with EDF Renewables Israel to deliver liquid-cooling storage systems for six energy storage projects with a capacity of 127 MWh. In the same month, Sungrow entered into a partnership with Australian energy trader Clean Energy Transfer Fund to become the key tolling partner for Hive battery developments, the first of which will span ten sites in New South Wales, which will combine to deliver up to 49.9MW/200MWh of distributed energy storage. Sungrow has developed a reputation as an integrator that provides clients with significant support during the project development process. In July this year, it was announced that Sungrow would supply its liquid cooled energy storage system to Penso Power and BW ESS for the fully 100 MW / 260 MWh project in Bramley, Hampshire in the UK. The company’s liquid-cooled storage system is considered to be one of the most innovative technologies of its kind. Sungrow’s revenue for the 2022 fiscal year was $5.98 billion, a 66.8% increase from the previous year. With regard to the outlook for the coming years, the company has said it anticipates continued growth in the renewable energy market, “driven by global efforts to reduce carbon emissions and transition to clean energy sources”. The company believes it is “well-positioned to capitalise on these trends and deliver innovative solutions to customers worldwide”.
Last month, Wärtsilä signed a “large multi-year” supply agreement with battery cell supplier EVE Energy. The agreement will support Wärtsilä’s “strong pipeline of energy storage & optimisation orders across key markets”, a company statement said. Wärtsilä currently has more than 3.5GW / 7GWh of energy storage capacity awarded, contracted, or in deployment across six continents. Key to the company’s success has been its ability to successfully navigate the supply chain obstacles that are affecting the entire energy storage industry. Wärtsilä claims it has maintained a “successful on-time delivery record across complex geographical locations”. In April this year, the company was selected by Origin Energy as the preferred contractor to deliver the 460MW / 920MWh first phase of what it said would be “one of Australia’s largest energy storage projects”, which will be located at Origin’s Eraring Power Station. The €300 million deal also represented Wärtsilä’s “largest single energy storage deal to-date”. In 2022, the company’s order intake increased by 6 per cent to €6 billion, while net sales increased by 22 per cent to €5.8 billion. The fact that the company was able to post an increase in orders and sales – despite what the company’s CEO Håkan Agnevall described as “challenging market conditions” – shows Wärtsilä is well-placed to consolidate its position as one of the market leaders.
As the S&P data suggests, there are indications that Tesla could lose market share (to Wärtsilä in particular) in the coming months and years, that is if it’s not already doing so. On the plus side for the company, it emerged in April this year that it would be opening a factory in Shanghai that will be capable of producing 10,000 of its Megapack products per year, which is equal to around 40GWh of energy storage. The company will begin construction of the factory in the third quarter of this year and start production in the second quarter of 2024. Meanwhile, other positive news included the announcement in July that renewable energy producer Neoen would be expanding its Western Downs Battery in Queensland, Australia to 270 MW / 540 MWh, with the extension being delivered by Tesla and construction contractor UGL. However, the recent news about a fire breaking out at the 50MW/100MWh Tesla Bouldercombe Battery Project near Rockhampton, Queensland, Australia will sow seeds of doubt in the minds of potential customers. The company’s 2022 annual report said that its 2022 energy generation and storage segment revenue stood at $3.9 billion, an increase of 40 per cent on the previous year. However, in what could be an indication of more recent market uncertainty, while the company’s Q2 2023 automotive revenues stood at $21.2 billion, up from $19.9 billion the previous quarter, its energy generation and storage segment revenues actually fell slightly to $1.509 billion, down from $1.529 billion the previous quarter.
In June this year, Beijing-based Hyperstrong began setting up its first overseas operation in Munich, Germany. Hyperstrong’s CEO Jianhui Zhang (pictured) a former chief technology officer at Siemens has stated that Europe and the US are two markets that offer growth opportunities for his company. The company has deployed more than 5GWh of energy storage spanning more than 300 projects, ranging from utility-scale to commercial & industrial and residential assets. In a series A funding round in 2015, Hyperstrong raised RMB130 million ($18 million), with funding from IDG Capital and Qiming Venture Partners. A series B funding round in 2016 raised RMB445 million ($61 million). HyperStrong – which has obtained multiple IEC, VDE, UN and UL certifications for its storage products – has proved popular with customers due to its production quality standards, project delivery capabilities, and big data processing expertise. Last month, it was reported that NaaS Technology Inc., the first US-listed electric vehicle charging service company in China – had joined forces with HyperStrong and Yongtai Energy, another energy storage equipment integrator, to supply around 380 charging stations with energy storage equipment. The total order value is RMB204 million ($28 million), with implementation taking place in the coming months.
Investment expertise. High-quality events. Exclusive content. Lead generation.
Talk to the Tamarindo team today to find out how membership would benefit your business.
The World Bank has predicted that conflict in the Middle East could lead to a dramatic spike in oil prices, which is linked to increases in food prices – however it’s argued that the forecasts do not take into account the ability of energy storage to meet demand