German battery storage manufacturer Sonnen expects to see a rapid expansion of its market reach, and battery storage production in its new Adelaide factory, following its purchase by oil giant Royal Dutch Shell.
In a visit to Australia this week, coinciding with a visit by the head of Shell's New Energies division, Maarten Wetselaar, Sonnen CEO Christoph Ostermann says the company is looking at a dramatic lift in production in coming years.
“We expect that we will reach within 18 to 24 months an inflexion point, where we will see significant growth in batteries torage markets that we are currently in,” Ostermann told RenewEconomy in an interview.
“We will see new markets coming up on the global schale … so we will look to scale up production five to 10 fold in the next 24 months.”
That would include a doubling in capacity at the new plant installed at the old Holden factory in Adelaide, to help it access the state government's home battery scheme, and give it the production muscle to match the likes of LG and Tesla.
Ostermann said the interest in Shell in Sonnen, and other “new energy technologies such as electric vehicle charging companies in the US and Europe, and the shift by other oil majors to these technologies proved that the energy transition is happening, and very quickly.
“This is the proof point that renewable energy and cleantech is commoditising. The big guys are entering the game and that is what we have been fighting for … the main players of the old energy world are doing that. It is a great achievement.
Asked if he feared that Shell, and others, would put such acquisitions into the bottom draw, and seek to protect their incumbent fossil fuel interests, Ostermann said:
“It's too late – renewable energy is already competitive today. Anyone who has an IQ larger than 30 knows that this is not stoppable any more. They can either join or be disrupted. I'd prefer them to join.”
Osterman says that Sonnen would act as an independent but wholly owned subsidiary of Shell, but the financial muscle from its parent would give it the money to expand into lucrative markets such as Japan and elsewhere in Asia.
“Now we have the resources to manage growth without losing market share.”
Sonnen expects its products to be part of the suite of technologies that Shell expects to offer consumers, as it shifts its retail focus from petrol stations to electricity. It has stated its intention to be the biggest electricity power player in the world.
In the UK, Shell already owns First Utility, a power retailer with nearly a million customers and where it is testing its delivery of distributed energy options such as rooftop solar, batteries and electric vehicle charging. It has bought Europe-based New Motion and US-based Greenlots, both in the EV charging space.
“We have found a big overlap between EV drivers and Sonnen battery customers,” Ostermann says. “Maybe these customers are first users and early adopters. They like both, but they are asking our installer partners if the can install solar and EV charging at same time.
“EV charging fits perfectly into virtual power plant technology, this is heavy load that can and needs to be managed. It also offers flexibility and we can offer that service to grid operators.
Ostermann says that in Germany, where the uptake of EVs is growing rapidly, Sonnen has developed an an alogrithm that “cascades the charging of EVs so they do not charge at the same time, and so they can be managed to support the grid.
Nathan Dunne, the new head of Sonnen in Australia, said the company expects to double its sales to date of Sonnen batteries (around 3,000 so far) within the next 12 months. “We will easily double that number,” he said.
However, Dunne said most customers were buying the battery and not engaging with the “Sonnen Flat” product, which promises no bills apart from a basic fee, and the company will be rethinking its marketing strategy.
“We need to do more to sell the value of Sonnen Flat. We need to help customers understand why Sonnen Flat is a good proposition.”
Giles Parkinson is founder and editor of Renew Economy
, and is also the founder of One Step Off The Grid
and founder/editor of The Driven
. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.