TheChek News Flow

GridBeyond’s software uses artificial intelligence to help owners of renewable-power assets manage their systems

Alantra Partners led a roughly $55.6 million growth investment in GridBeyond, a developer of artificial intelligence-powered systems that help businesses and grid operators balance electricity supply and demand.

Existing backer Energy Impact Partners, a clean energy-focused investment firm in New York, also participated in the €52.3 million deal that aims to help GridBeyond speed up its expansion in the U.S. as increasing use of intermittent renewable power creates hurdles for grid operators.

Baltimore-based power company Constellation Energy also joined Spanish investment firm Alantra in the deal, GridBeyond said. Other participants included European investors Mirova and Act Venture Capital, as well as electrification and automation companies ABB Group in Switzerland and Yokogawa Electric in Japan.

Dublin-based GridBeyond’s systems help businesses reduce their energy costs by better managing their consumption while taking advantage of the electricity sources they may own, such as storage batteries, rooftop-solar panels and electric-vehicle fleets, said Michael Phelan, GridBeyond’s chief executive and co-founder.

Such assets enable businesses that own them to also act as electricity generators by providing power to the grid during periods of high demand and get paid in return. GridBeyond’s software uses local grid data and weather forecasts to estimate future electricity prices, helping users to make decisions such as whether to discharge their batteries or store energy for later use.

“What’s the best thing to do if the customer has solar on the roof? Maybe they have some EV chargers. Maybe they have an air-conditioning system running that they need to optimize,” Phelan said. “They might also have some spare capacity in their system that they can make available.”

GridBeyond’s system helps clients determine where they can get the best price for their surplus power. The system also helps power companies manage various sources of renewable energy and match them with expected demand so that they can reduce the use of backup fossil fuel-fired plants, Phelan said.

“The artificial-intelligence system is making decisions every 15 minutes or every five minutes as to how best to use the assets you have to basically minimize your cost and make sure that you provide the services that you promised to the grid,” he said.

After decades of relatively stable power consumption in the U.S., electricity demand across the country is expected to surge in coming years as a growing number of data centers go online, according to industry analysts. The increased demand, combined with a rising share of weather-dependent solar and wind power sources feeding the grid, is amplifying the frequency and severity of electricity-price peaks in power markets such as Texas and California, according to a report research provider S&P Global released earlier this month.

Greater difficulty in balancing electricity supply and demand is creating opportunities for GridBeyond in states such as Arizona, Florida and New Mexico, Phelan said. The company also operates in countries such as the U.K., Australia and Japan.

“The grids are under pressure because they’re putting in more renewables and they want less fossil fuel,” Phelan said.

On the other hand, businesses have increased flexibility in how they consume power, he added. As an example, he cited air-conditioning systems that can be automatically adjusted to cool slightly more in morning hours, when solar power is abundant, and turn AC systems off completely during periods of peak demand.

“The problem with renewables is that they’re intermittent, but the good thing about the new demand is it’s also intermittent,” he said. “You can match one with the other and that’s the trick.”

Hang Seng Bank filed a petition with Hong Kong’s High Court

A Hong Kong subsidiary of HSBC Holdings HSBA -0.35%decrease; red down pointing triangle wants to liquidate debt-troubled Times China, in another instance of creditors seeking to recoup funds from developers amid China’s protracted property slump.

Hang Seng Bank 11 -2.26%decrease; red down pointing triangle filed a petition with Hong Kong’s High Court to wind up Times China due to its financial obligations of around US$267 million, the developer said Tuesday. It added that the court has set the first hearing for the petition on July 3.

Times China’s shares fell 36% to 15 Hong Kong cents (US$0.02) in early trade, bringing its year-to-date losses to 42%.

Times China, like other Chinese developers, has been hammered by the overall weakness in the Chinese economy, particularly in the real-estate sector. Property sales have dropped, leading to impairment charges and debt defaults for developers.

Another Chinese lender, China Construction Bank (Asia), last week filed a similar petition against Shimao Group, a Hong Kong-listed developer, relating to obligations of around US$200 million.

“The board is of the view that the petition does not represent the interests of other stakeholders of the company and may impair the value of the company,” Times China said. It added that it would oppose the petition.

Times China said it continues to communicate with offshore creditors to work on its restructuring plan. It aims to announce the terms of the plan as early as possible.

“Deteriorating profitability” remains a significant worry for major developers, given the sluggish process of reducing debt, UOB Kay Hian analysts wrote in a recent research note.

Most developers in China are likely to continue reporting falling sales this year, and more debt defaults could be possible, they add.

Rearmament and green transition prompt rethink of long-stalled integration of Europe’s financial markets

EU leaders are set to revive plans for eliminating national barriers between the bloc’s capital markets, as they race to find hundreds of billions to fund a rapid scale-up of the continent’s defence capabilities and its green transition.

A two-day EU summit starting Wednesday will commit to “advancing the Capital Markets Union,” according to draft conclusions seen by the Financial Times. The CMU, first proposed almost a decade ago, has stalled amid resistance in national capitals to handing more powers to Brussels.

But fears of the bloc falling behind the US and China, and strains placed on public coffers amid increasing spending needs have led to a rethink about finally bringing those plans into fruition.

“We need huge sums of money,” financial services commissioner Mairead McGuinness told the FT. “The public purse of the member states is not enough, so we need private capital to be mobilised.”

The CMU revival comes after German Chancellor Olaf Scholz and French President Emmanuel Macron at a summit in March demanded that the issue be elevated from finance ministers to leaders who are more aware of the strategic significance of this file, according to officials familiar with the discussions.

“It needs to be solved by our bosses,” said an EU diplomat, pointing out that there was “no willingness to compromise among ministers”.

“There is simply not enough public money to finance the green transition [and] defence,” they added. “Either [the leaders] move on CMU or they will have to make more difficult choices.”

The European Central Bank estimates the investment gap to reach the EU’s 2040 climate targets at €800bn per year. Another €75bn will be needed yearly for capitals to meet Nato’s military expenditure target of 2 per cent of GDP.  

“If we don’t provide a narrative [on how to finance it] we will lose political support for something that is existential . . . This is why it’s now so high on the agenda,” McGuiness added.

A similar warning to leaders about the risk of underfunded policies fuelling anti-EU sentiment ahead of June elections for the European parliament will be made in a report on the bloc’s single market drafted by former Italian Prime Minster Enrico Letta. 

By integrating Europe’s fragmented financial markets, its proponents say, capital would flow to or at least stay in the EU. The bloc currently sees a net financial outflow of €250bn per year to the rest of the world, mostly to the US, according to the European Central Bank. 

“This is one of our weaknesses: the fragmentation of our capital markets. For everything, not just defence,” Josep Borrell, the EU’s top diplomat, said last week. “If we want to push for better financing for the defence industry, then we certainly have to [complete] the capital markets [union].”

But countries disagree on the recipe needed for making that happen.

One of the most-disputed issues among ministers is financial markets supervision. Some countries, including France and the Netherlands, are pushing for the existing EU regulator, the Paris-based Esma, to be given direct oversight over financial institutions in Europe.

France is pushing for a more ambitious model that would place trading platforms, clearing houses and asset managers under Esma’s direct supervision — if they opt in voluntarily.

Berlin however opposes central supervision on the grounds that it would create additional costs for banks and other market actors. 

“I know this will be one of the areas where movement will be difficult but the direction of travel is clear. If we want to unleash investments, we need supervision that is not just member states-driven,” said McGuinness.

Karel Lannoo, head of the Centre for European Policy Studies, a Brussels-based think-tank, questioned whether leaders would be able to find a solution.

“The problem is who will be willing to break some eggs, that’s the issue. Everybody has an interest in maintaining the status quo. It will be costly to change it.”

Agreement is latest move by US tech group to extend its reach into fast-growing sector

Microsoft has agreed to invest $1.5bn in Abu Dhabi artificial intelligence group G42, its latest big bet on the technology that underscores deepening collaboration between the US and United Arab Emirates.

The agreement gives Microsoft a minority stake in G42, and its vice-chair and president Brad Smith will have a seat on its board. It comes after G42 severed its links to Chinese hardware suppliers, which had been the subject of scrutiny by US lawmakers.

The investment will strengthen Abu Dhabi’s position as an AI hub, and is a sign of the oil-rich emirate’s ambitions in the technology. It also shows how the Gulf, long seen by many in Silicon Valley as an easy source of funding, is increasingly regarded as a credible technology partner.

“Given the importance of the technology and given how important it is to the two countries and two governments, we’ve taken this first step in close collaboration with the governments of both the UAE and the United States,” Smith said. “We will take the next step and following steps in close collaboration with them as well.” 

Asked if the Microsoft deal was a prize for cutting ties with China, Peng Xiao, G42’s chief executive, said: “I would focus on our decision to form this partnership with Microsoft to really develop our capabilities on a global scale. Less focus on what we choose not to do.”

As part of the deal, G42 would use Microsoft’s cloud computing platform Azure “as the backbone for the development and deployment of AI services we provide to all of our customers”, said Xiao.

Smith said the companies planned to partner at a later stage on building out data centres in other countries. They will also support a $1bn fund for AI developers.

“Microsoft’s large investment is not something we do without a lot of thought,” Smith added. “And this decision reflects confidence by our company in the UAE as a country, in G42 as a company, and in Peng as its CEO.”

Chaired by the UAE’s powerful national security adviser Sheikh Tahnoon bin Zayed al-Nahyan, who oversees a sprawling business empire, G42 is central to Abu Dhabi’s AI ambitions and is backed by Abu Dhabi sovereign investor Mubadala.

G42’s companies range from data centres to healthcare, and it has produced an Arabic large language model called Jais.

AI leaders have been increasingly drawn to Abu Dhabi by its grand plans and deep pockets. It recently launched an investment company dedicated to AI deals, called MGX.

Sam Altman, OpenAI’s chief executive, has visited several times, including this month, and has held discussions with UAE investors including Sheikh Tahnoon for a scheme to boost chip production, likely to cost billions of dollars.

Seattle-headquartered Microsoft is OpenAI’s main partner, having invested $13bn in the start-up, much of it in the form of credits for Microsoft’s cloud.

Microsoft is positioning itself at the centre of an AI boom following the launch of OpenAI’s ChatGPT chatbot in November 2022. It says it sees the G42 investment as a launch pad to other regions. “By coming together, I think we can accelerate very substantially the arrival of AI services in the Global South,” said Smith.

Satya Nadella, Microsoft’s chief executive, regards AI dominance as critical to getting ahead of rivals, and a way to eat into arch-rival Google’s dominance in search.

Nadella has sought to corner the market by investing heavily. Last month, Microsoft struck a $650mn deal to hire the founders and dozens of researchers and engineers at AI start-up Inflection.

Microsoft has been the biggest spender during an investment frenzy over the past 18 months. According to private markets data provider PitchBook, investment into generative AI roughly quadrupled between 2022 and 2023.

The bulk of the $27bn raised by AI start-ups last year came from Big Tech companies. As well as Microsoft’s $10bn investment in OpenAI, Amazon and Google agreed multibillion-dollar deals with Anthropic, another San Francisco-headquartered AI company.

Hawkish

Belgium and Nato are leading a charge to better defend Europe’s critical energy infrastructure against malign interference, writes Alice Hancock.

Context: The explosion of the Nord Stream 2 gas pipeline in the Baltic Sea, sightings of Russian boats near wind farms off the Dutch coast and scares around oil rigs have heightened fears that Moscow or other unfriendly actors could sabotage EU energy infrastructure. 

Officials are concerned that any threats could leave a region already vulnerable to energy supply shocks more exposed, particularly as governments push to expand offshore wind farms in the North and Baltic seas.

Defending that infrastructure had become “a geopolitical, security and also an economic imperative”, said Tinne van der Straeten, the Belgian energy minister who chaired a closed-door lunch with her fellow EU ministers and Nato officials yesterday. “Close co-operation is absolutely needed.”

The plan is for developers of wind farms, subsea cables and gas pipelines to share more data — including video footage and information collected by sensors — with military agencies.

The key issues are establishing what the major threats to energy infrastructure are, what can be done about it and how sensitive data can be shared in real time.

A person familiar with the discussions said that meetings to establish data-sharing networks were under way, along with efforts to develop artificial intelligence technology that would evaluate satellite data as well as input from drones and electronic sensors — of which offshore wind turbines can have up to 300.

Belgium could become the first country to formalise this, based on proposals for the auctions of contracts for its new North Sea energy hub, an artificial island nicknamed Princess Elizabeth.

The plans come after Belgium, Germany, the UK, the Netherlands, Denmark and Norway last week signed a declaration to share more information about protecting critical assets.

Though developers are increasingly conscious of the risks, shielding the new infrastructure won’t be straightforward.

Wind turbines above the water are easier to protect than subsea pipelines and cables, but new technologies such as distributed acoustic sensing, which allows continuous monitoring along cables, can tell “if a vessel is dropping anchor on the seabed”, according to Giles Dickson, chief executive of the industry body WindEurope.

More off-kilter ways to protect power generators include sensors with small calibre guns to fire on malicious operators, putting up nets to catch drones — or even using hawks to disable them.