The new joint venture will develop technology to move gas users towards electricity.
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Domestic solar provider Sunrun and power and gas supplier SK E&S have agreed to start a home electrification joint venture worth $150m.
The companies will contribute the money toward the unnamed new company equally. This will go towards forming the new company and its research and development plans. The joint venture will focus on accelerating electrification of homes, adopting renewables, and the transition to a distributed energy system.
South Korean company SK E&S has joined with its associated companies and will contribute $75m in cash. US-based Sunrun will match this by investing $65m in cash while providing the equivalent of $10m of consultation fees.
Separately, Sunrun said SK E&S will but $75m of its stock at a previously agreed price. Currently this would be the equivalent of more than 2 million shares.
While some countries have legislated to stop use of natural gas in homes, the US has not legislated against it as a nation. Some cities have implemented bans, such as Berkeley and several other across California. On the other hand, at least five southern states have legislated against cities or buildings banning gas use.
According to Guidehouse, one-tenth of all US emissions come from gas use across 70 million homes. Meanwhile the home country of SK E&S, South Korea, buys the third largest amount of liquefied natural gas (LNG) of any country. The country’s public gas company KOGAS feeds the country’s whole gas network, importing up to 40 million tonnes of LNG per year.
Sunrun CEO and co-founder Lynn Jurich said: “We need to quickly move away from using unreliable, expensive, and polluting energy sources to power our homes and transportation system. Our partnership with SK Group will help pave the way for a future where energy consumers have a completely electrified home that is powered by more reliable, local, affordable, and clean energy from Sunrun’s rechargeable solar battery systems.”
SK E&S senior vice president Daejin Choi said: “Given the trend towards the 3 Ds (decarbonization, decentralization, digitalization), we have been and will continue to be an active player in the energy solutions field. We believe our partnership with Sunrun can help provide a cleaner, smarter, brighter energy solution service to end-users.”
The companies also said they “anticipate achieving a return of multiples more than the invested capital as the venture commercializes solutions that enable a smart energy system of the future”.