The German startup Voltfang, which manufactures stationary battery storage systems from requalified electric vehicle batteries, has partnered with Palladio Partners. The private equity house wants to invest 250 million euros in large-scale storages. Voltfang will operate those facilities for Palladio Partners.
Founded in 2021, the startup Voltfang is a manufacturer of stationary battery storage systems and has already acquired Aldi Nord, McDonald’s, Schaltbau and, most recently, the Jet petrol station chain as customers. With the commissioning of its new battery storage factory in Aachen, Voltfang’s production capacity have now increased significantly, and it is clearly time to scale its business.
Voltfang is therefore entering into a binding partnership with Palladio Partners, an investment boutique founded in 2012 that specialises in infrastructure. The aim of the partnership is to develop, finance, implement and operate large-scale battery storage projects that serve the energy system. This means that Voltfang will not only manufacture but operate large battery storage systems for Palladio Partners.
‘Implementing projects of this magnitude requires two things: scalable battery expertise and solid financing. Palladio has excellent access to capital and a deep understanding of the energy markets; Voltfang complements the partnership with technological expertise that is unrivalled in the German market. Together, we are making a measurable contribution to the energy transition,’ explains Voltfang founder David Oudsandji.
€250 million investment target
By 2029, Palladio aims to invest €250 million in large-scale battery storage systems with several hundred megawatts of storage capacity throughout Germany. The capital for this will come from a fund managed by Palladio Partners for institutional investors that focuses on the transformation of infrastructure in Germany. The first concrete projects from the partnership are expected to reach construction readiness this year.
“With the growing demand for electricity storage and the continued decline in technology costs, this is a particularly attractive time to be investing in the expansion of battery storage,” said Oliver Sauer, partner at Palladio Partners, explaining the interest of institutional investors. “Voltfang offers a sustainable range of solutions that align very well with our transformation fund and therefore with what our investors are seeking. We’re excited about this collaboration!”
Voltfang to operate storage facilities for Palladio
Voltfang will take care of the battery storage systems and all operational matters such as planning, construction, operation and maintenance. Palladio Partners will ensure the commercialisation and financing of the projects. The grid-connected battery storage systems are used when the grid needs to be relieved due to a large amount of solar power being fed in, and can absorb excess electricity from the grid accordingly.
If the supply of electricity falls and demand rises, the electricity can be fed back into the grid. The operator of such an electricity storage facility can earn money from the price difference between the electricity stored at a low price and the electricity sold back at a higher price. It is therefore an arbitrage-based business. The electricity storage facilities are suitable for participation in both the balancing energy and wholesale energy markets.
Reuse of EV batteries
The core of the Voltfang brand is built around the second life concept, which focuses on giving used electric car batteries a new lease of life in a new format. However, Voltfang now also works with ‘new-life’ batteries, “which come from the mobility industry but were never used due to overproduction and insufficient demand from the EV transition,” such as in a storage system for Stuttgart Airport.
In summary, Voltfang also refers to requalified electric vehicle batteries from the European automotive industry that are used in stationary storage systems. However, the phrase ‘among other things’ in the current press release leaves open the possibility that Voltfang does not have to use exclusively electric car batteries.
BESS market is a large growth area
Voltfang and Palladio Partners see stationary storage as an absolute growth market: given the rapidly growing share of volatile renewable energies in electricity generation in Europe and the dismantling of fossil fuel power plants, battery energy storage systems (BESS) are making an essential contribution to the energy transition.
According to calculations by the Fraunhofer Institute for Solar Energy Systems (ISE), around 100 gigawatt hours (GWh) of electrical storage capacity will be needed nationwide by 2030 and around 180 GWh by 2045. Currently, large storage batteries in Germany have a total capacity of only 3 GWh.
