Headquartered in Denmark, Vestas is the largest manufacturer of wind turbines in the world. This week, it announced the formation of a partnership with young Swedish battery manufacturer Northvolt to improve the integration of grid-scale battery storage systems into wind energy systems. The two companies will share research and development duties and create products for the wind energy sector that utilize products from each.
According to Utility Dive, the partnership will be known as Northvolt Labs. The collaboration will help the Vestas “define, challenge, and improve battery storage offerings for customers that need hybrid and storage solutions,” says Anders Vedel, chief technology officer at Vestas. “There is a strong shared purpose and strategic fit with Northvolt.” Peter Carlsson, the CEO of Northvolt, formed the company in 2015 after working for many years at Tesla. Vestas will contribute nearly $12 million to the partnership over the next 7 years.
Part of mission of the partnership is to create advanced data management systems that will improve the ability of wind energy systems to meet the needs of utility companies by making renewable energy more predictable and reliable. “Northvolt, with the support of Vestas, is looking to better understand the needs of the renewable energy sector in order to develop batteries for solution providers and OEMs,” the companies said in a joint press release. “Northvolt is building a next generation battery factory with the aim to produce the world’s greenest batteries to enable and accelerate the transition to renewable energy.”
Despite the news, shares in Vestas fell more than 20% on Monday after it announced quarterly earnings well below analysts’ expectations. “The drop wiped out all of the company’s gain in stock price for 2017. An increasingly competitive environment and emerging trend of aggressive capacity auctions is resulting in price and margin pressure at Vestas,” wrote James Evans, a Bloomberg Intelligence analyst. While cleantech fans applaud ever lower auction prices, seeing them as signs the renewable energy revolution is moving forward, the companies doing the heavy lifting are operating on razor-thin margins that squeeze profitability — a condition that puts that revolution at risk.