Equinor Moves into US Power Market with Acquisition

Norway’s Equinor is entering the U.S. power market after inking a deal to acquire a 100% stake in Virginia-headquartered battery storage developer East Point Energy LLC.

The global energy company—which develops fossil fuel, renewable and low-carbon resources—said July 12 that East Point will become a subsidiary of Equinor. Terms of the transaction, which is expected to close in the third quarter, weren’t disclosed.

“The acquisition of East Point Energy represents Equinor’s entry into the US power market through flexible assets.”—Olav Kolbeinstveit, Senior Vice President, Power and Markets within Renewables, Equinor ASA

The acquisition comes as Equinor broadens its reach into renewables amid the transition to a lower-carbon economy. With the share of renewables in the energy mix increasing, battery storage is seen as a critical piece of the power puzzle given intermittency concerns.

“It will enable Equinor to further unlock the potential we see in the renewables space in the U.S., capturing value from volatility in the power markets and providing reliable services to the grid,” Olav Kolbeinstveit, senior vice president for power and markets within renewables at Equinor, said in a statement.

The U.S. has witnessed significant growth in battery storage capacity in recent years. The Energy Information Administration (EIA) reported in 2021 that large-scale battery storage capacity jumped 25% in 2020, mostly driven by systems at or near solar projects.

“Electric power markets in the United States are undergoing significant structural change that we believe, based on planning data we collect, will result in the installation of the ability of large-scale battery storage to contribute 10,000 megawatts to the grid between 2021 and 2023—10 times the capacity in 2019,” the EIA said.

“When we set out to find a capital partner, first and foremost, we were looking for a strategic and cultural fit. The Equinor team understands our business and the critical importance of energy storage.”—Andrew Foukal, CEO, East Point Energy

Founded in 2018, East Point Energy specializes in developing stand-alone, grid-scale energy storage projects. East Point said it is currently developing more than 4 GW of energy storage systems. The acquisition will enable the company to accelerate its growth as it matures projects across the U.S.

“When we set out to find a capital partner, first and foremost, we were looking for a strategic and cultural fit,” said East Point CEO Andrew Foukal. “The Equinor team understands our business and the critical importance of energy storage. They have established a significant presence in the U.S. and are dedicated to long-term growth. This is a great opportunity for both teams, as well as our project partners going forward.”

Equinor said the East Point team will continue to develop its business as well as own and operate additional energy storage projects.

East Point’s developments, all located in Virginia, include the Dry Bridge Energy Center Battery Storage, which was sold to Dominion Energy; and the Yadkins Energy Center Battery Storage Project, sold to Aypa Power and set to begin commercial operations in 2025. The company also developed the Brokenburg Battery Energy Storage System, now owned by the Rappahannock Electric Cooperative.

Equinor sees profit potential in the space with its latest acquisition and a boost from its wholly-owned energy trading house Danske Commodities.

“The acquisition will provide us with attractive investment opportunities, and the projects will contribute to lifting the return on our renewable portfolio while at the same time lowering the portfolio risk,” Equinor said in a release.

The company acquired a 45% stake in Noriker Power Ltd., a U.K. battery storage developer, in 2021 with an option to acquire the full company at a later date.

Global installed storage capacity is expected to grow by 35-fold by 2030, reaching 585 GW, according to the International Energy Agency’s (IEA) Net Zero by 2050 Scenario. The IEA forecasts global battery storage capacity will grow at an average annual rate of 38%, with more than 120 GW added in 2030. That’s up from 5 GW in 2020.