Stem
One of the biggest challenges preventing a sustainable switch to renewable energy is the lack of sufficient buffer capacity to enable matching energy production to consumption. One way of providing sufficient buffer is creating better battery hardware, but given the current state of technology, it seems unlikely that a breakthrough will be made leading to significantly increased battery capacity. Consequently, the focus to enable the green energy transitions in the foreseeable future will be on providing better software and smarter algorithms to streamline production and consumption.
👽 What?
This is exactly what Stem does, building software that is designed to harmonize energy supply and demand. Athena, their cloud-based management system, makes energy management decisions based on real-time analytics and historical data using artificial intelligence. This means electricity will be used more efficiently: battery storage can be used when energy from the grid is priced highest and be recharged when it’s cheapest, resulting in considerable cost savings in regions with variable-based electricity rates.
Imagery courtesy Stem
The solution is vendor-neutral, so it can be implemented regardless of battery supplier. Even though Stem provides complete installations, Athena is also offered to third parties like PV-installers who want to add a storage solution to their offering.
In many cases, Stem offers zero upfront cost project financing, where the energy savings get funnelled into repaying the solution.
🤷 Who?
Originally, Stem started in 2009 under the name Powergetics, launching their first operational projects in 2012. As pioneers in smart energy storage, their focus was on deploying and maintaining complete energy storage solutions for their customers.
More than ten years later, Stem can count 30 Fortune 500 companies among its customers, including Facebook, Amazon, and Walmart.
As the marketplace matured, the business model shifted more towards software and leveraging the Athena platform as an additional value driver for the company.
Perhaps inspired by the higher margins generally generated by software companies, Stem went public via a SPAC merger with Star Peak Energy in April 2021.
🕵️♀️ Who else?
Even though Stem is one of the biggest smart energy storage providers in the world, boasting 1GWH over 950 sites, there are a myriad of other players active in the field. Strikingly, a lot of the bigger players in the market have a connection to or were acquired by established players in the energy sector.
AMS got acquired by Fluence a subsidiary of Siemens, Geli got acquired by Q-Cells, Italian energy conglomerate Eni acquired Green Charge Networks and Saft became a wholly-owned affiliate of French energy giant Total. Younicos got bought by Aggreko.
👍 Why
The benefits are clear, both energy suppliers and consumers benefit from a solution balancing the energy usage. It is a building block that will enable us to develop an electrical grid in line with the needs of renewable energy production. This type of technology will without a doubt prove valuable in the future.
👎 Why not?
We could warn about possible privacy or security issues using cloud software for this type of software. We could also mention the issues with adding even more reliance on battery systems, and the environmental and social issues that accompany the mining of the metals needed for their production.
But more specifically for Stem we have one more interesting question: Is it a feature or a business? The trend of industry giants buying competitors could and presumably integrating them into their offerings could potentially lead to a commodification of the technology where it will be increasingly difficult to demonstrate enough additional value compared to the defaults. Ironically, the marginal cost of software approaching zero can be both an advantage and a disadvantage.
📚 Further reading?
✨ Giphty
This was it, my battery is low, off to recharge for another week!
