Cummins invests in Exergy Energy
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Columbus-based Cummins Inc. (NYSE:CMI) has taken a minority stake in California-based software and asset management firm Exergy Energy LLC. Cummins says the partnership will allow for its backup power systems, which include generators and energy storage systems, to power an entire operation during grid outages or times of peak usage.
Exergy’s software monitors the grid and can automatically shift power loads to backup power systems, before an outage or peak demand charges occur. Through the partnership, Exergy will be able to install Cummins’ power systems equipment to power 100% of a facilities’ load during outages and peak usage.
“Exergy makes the process simple by removing the cost barriers of installing and operating a backup generator,” said Wissam Balshe, business director of Cummins Energy Management Solutions business. “Their platform is a breakthrough solution that provides the lowest cost way to achieve resiliency and sustainability in a single package.”
According to Cummins, Exergy’s software can offer its power systems with no upfront CAPEX investment by the customer. As owner of the asset, Exergy manages participation in grid programs, which earns “substantial ancillary revenues” through grid-sponsored programs, such as demand response and synchronous reserves. Exergy then shares a portion of the cash flows from the programs with its customers.
At the end of the contract, Cummins says ownership of the backup power system is transferred to the customer.
“Cummins is committed to helping its customers meet their resiliency and sustainability goals,” said Balshe. “We recognize that the upfront capital expense of a generator set and power system components, coupled with the complexity of participating in grid services was causing organizations to avoid the difficult decision of finding a solution.”
Cummins did not disclose terms of the deal.