SunEdison's commercial and industrial solar development team has been reincarnated as ForeFront Power.
Earlier this month, the Japanese industrial and energy giant Mitsui & Co. acquired the remainder of SunEdison's commercial business for $15 million. The acquisition included 50 employees — down from 300 at SunEdison's peak — focused on building and financing projects. The projects include a backlog built up under SunEdison.
Throughout the last decade, the now-bankrupt solar developer completed 800 megawatts of C&I projects globally. Since late 2015, when SunEdison started crumbling, all its commercial-scale projects have been off.
ForeFront will be taking a “hybrid” approach to developing new projects, said CEO Rafael Dobrzynski, who was formerly the senior vice president of SunEdison's C&I unit.
SunEdison's operations, maintenance and construction teams were slashed during the restructuring. So ForeFront won't retain all of its projects. It will partner with other EPCs and sell off projects on a case-by-case basis to generate cash for future development.
As part of Mitsui, the team will also broaden its scope to include storage and C&I energy management.
According to the Japanese developer, ForeFront will “pursue additional value creation by offering energy management services that combine solar generation, storage, demand response, and more. In recent years, Mitsui has been stepping up its activities in new and innovative power businesses, and Mitsui envisions Forefront Power serving as a platform for providing a range of services to meet the diverse needs of C&I customers.”
Mitsui's independent power arm owns 11 gigawatts of energy projects worldwide. It has invested millions into up-and-coming distributed energy companies over the last few years.
In 2015, Mitsui led a $12 million investment round in commercial behind-the-meter storage developer Stem. In 2014, it participated in a $12 million investment round for cloud-based energy analytics startup SCIEnergy (now called Flywheel). Most recently, in February of last year, the company invested $10 million into residential behind-the-meter storage developer Sunverge.
The team at ForeFront includes some SunEdison employees who were working on commercial storage deals, said Dobrzynski.
“It’s not only linked to solar. We definitely want to be seen as an energy provider that is able to help customers improve their energy,” he said. “It’s any other services we can bring to the table.”
With a mandate to expand its renewables and energy services businesses, Mitsui has long been looking for a “platform” company. It found that company in SunEdison — or what was left of the developer's commercial team.
“Mitsui has had its eye on the C&I space for some time, but only now has it gotten into the business of directly providing C&I energy services (starting with solar),” said Andrew Mulherkar, a senior analyst with GTM Research's grid edge practice, who's been tracking the shifting landscape in C&I energy management.
“On the solar side, you need to have people who know what they're doing,” said Dobrzynski. “The second element is the relationships you have with C&I customers. Mitsui brings a wealth of relationships to the table. And they're committed to bringing capital from their own balance sheet.”
Last year was a busy one for acquisitions and partnerships in the C&I sector. And activity has been brisk in the first two months of 2017.
“We've already seen five deals in the C&I energy management market, continuing a growing trend of global conglomerates and energy service providers targeting the space,” said Mulherkar.
Source: GTM Research
In early January, geothermal developer Ormat acquired the virtual power plant integrator Viridity Energy.
A week later, the mega-utility Enel bought behind-the-meter storage developer Demand Energy.
A week after that, Con Edison's energy services arm acquired the assets of the Northeastern solar developer Ross Solar Group.
And at the end of January, Schneider Electric scooped up Renewable Choice Energy to help it expand renewable energy offerings to commercial customers.
Mitsui's acquisition of SunEdison's C&I team marks the fifth acquisition this year.