Private Equity Firm NGP Makes $200 Million US Battery Bet as AI Stokes Power Demand
(Bloomberg) -- Private equity firm NGP Energy Capital Management is backing a new US energy-storage developer with $200 million as data centers spur record power demand growth.
Liminal Energy LLC, formed late last year by longtime storage developers, plans to use the funds from NGP to focus on building utility-scale batteries of various sizes and investment structures, Ken-Ichi Hino, co-founder and president, said in an interview.
NGP had searched extensively for three years to find the right storage team to back, Sam Stoutner, co-head of energy transition, said in a statement. The firm, which has extensive investments in oil and gas, has increasingly backed companies in the power sector.
Hino and Mark Saunders, who both led the energy storage group at UBS Asset Management, launched Liminal as a way to address reliability issues as America’s grids come under increasing stress. Aging infrastructure, extreme weather and the demand for electricity to run artificial intelligence are raising the risk of power price spikes and outages.
“We’re hearing about affordability related to electricity a lot more now. It was reliability maybe a year or two ago,” Hino said. “But they’re kind of the same thing in many ways.”
Batteries can help keep grids stable and limit price swings by soaking up excess power from wind, solar or nuclear to sell back to the grid when demand is high, or to ease bottlenecks. Liminal plans mainly to build free-standing batteries but will consider hybrid facilities, such as storage alongside renewables and natural gas generation.
Demand growth driven by data centers represent “real tailwinds,” including using storage to help curtail the facilities’ demand during times of grid stress or speed up their ability to connect to the system, Hino said.
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