Strong partnerships and a highly talented team: CEO Stephen Coughlin shares the keys to success for Fluence.
Fluence Energy was launched by two industry giants and pioneers in energy storage, Siemens and the AES Corporation, in January 2018, with the goal of forming a new company dedicated to innovating modern electric infrastructure. In the words of CEO Steve Coughlin, Fluence is driving change by opening new markets to battery-based energy storage around the globe and has the largest fleet of storage projects, either deployed or awarded, of any company in the world.
“We are at a time in the energy sector when there’s a major transformation underway, and energy storage plays a role in every area of that transformation,” Coughlin told CEO Magazine in an exclusive interview. “It’s such a useful and versatile resource. It provides flexibility and reliability, increases the resilience of the grid, enables the smooth integration of renewables, and sup- ports the transition to a modern, cleaner electric infrastructure (…) “Secondly, it has a critical social and environmental impact on the world,” he added. “One of our objectives as a company is to have an impact on communities, to help decarbonize the electric infrastructure. Those two things really attracted me to take on this challenge. Furthermore, as a direct result of that opportunity, we’re able to find incredibly talented and passionate people to join our team.”
Coughlin also notes that the business case for both renewables and storage is shifting dramatically. “CEOs around the world are committing their companies to procuring 100% of their power from renewables, and to do that, storage has to be part of the solution,” he said.
A tradition of excellence
Although Fluence has been around for only two years, the company already operates in 21 countries and territories around the world and is considered the global leader in its space. Coughlin believes that at the heart of this success is the way Siemens and AES came together to combine their knowledge, experience, and energy storage technology, going back over a decade. AES installed its first test systems in 2008 and launched its first commercial projects a year later.
“By virtue of combining a utility and independent power producer like AES, along with a major energy industrial company like Siemens, we have the best understanding of the grid of any player out there,” Coughlin stressed. “It takes a lot of experience and insight to get this technology right and really understand customers’ needs. Also, by virtue of having these key partners in our business, we have significant backing from them in terms of credit support and infrastructure, which enables us to be as cost efficient as possible in our operation.”
“One really important differentiator for Fluence is that we’ve collected a huge operational data set, which our digital intelligence team is using to reduce operating costs, extend the life of the batteries, and to improve the response time and the reliability of the systems,” he elaborated.
The keys to growth
Fluence has more than doubled its size since the company was founded, and Coughlin views expansion as key to extending its global leadership position. The company’s forward strategy includes evolving its technology platform to make it both more repeatable and scalable in the future, while keeping a close eye on potential improvements in the way Fluence operates.
“We have a backlog of systems of more than 1.1 gigawatts, and when you include what we had already deployed, our total storage system portfolio is over 1.5 gigawatts,” he highlighted. “At heart, we’re a technology company. What we want out there in the world is an end to smokestacks being built; we want these storage technology stacks that are much more intelligent, much less carbon intensive, and can be easily expanded and adapted to changing market conditions. This technology plays such a critical role in both modernizing the grid in developed markets, as well as bringing developing markets online with a much cleaner, modern infrastructure. The road before us is long and wide.”
“We look at and measure the quality of our performance with all our teams every month, holding engaged dialogue with all our leaders executing around the world, and we discuss how we can improve if we are falling short. That’s a level of accountability and transparency that you have to drive internally. Secondly, we actively listen to our customers and collect customer feedback regularly, so that we’re clear from the customer perspective how we’re serving their needs. We also have a very intensive focus on a safety and quality culture based around how our people manage the delivery of and interaction with our systems, as well as intensive reviews with internal and outside experts on our safety engineering designs.”
Given Fluence’s global presence, Coughlin insists that the company looks to employ standardized tools and processes around the world, ensuring a uniformly high-quality Fluence experience for all customers. He believes strongly in the company’s ability to learn lessons from past projects and to share those lessons across the company through a project management manual which is constantly revised and updated.
“Where we continue to improve is in defining handoffs across different phases of a project, from sales to delivery and buildout, and onto service and maintenance, ensuring everything is done smoothly and the customer experience is seamless,” he explained. “We have dedicated teams internally that are designing tools that we can use to expand standardization and automation in our company and in the way we internally process our work. Those two areas are the main areas of opportunity for us.”
Fluence does not develop or manufacture its own batteries as it believes horizontal-integration across the supply chain and long-term partnership agreements with top-tier suppliers provide its customers with the best value in a rapidly changing commercial environment. Furthermore, building and maintaining these relationships ensures Fluence can move quickly and efficiently as project opportunities arise.
According to Coughlin, the procurement of power conversion equipment, another key element of Fluence’s business, works along the same lines, with partnerships based on mutual collaboration and the development of components. As in many aspects of the company’s work, he cites the long, established reputations of Siemens and AES as crucial in establishing such agreements.
“I think that with this backing of very long-established, credible players, both financially as well as operationally, you can be sure that wherever we are in the world, we have a team that’s already on the ground. They know the local market, the grid and utilities, and the regulations and compliance codes in order to get things functioning efficiently,” Coughlin insisted. “That ecosystem of partners is very important to the value that we provide to our customers. Problems can occur in many ways and with many components, but through these long-term relationships, we can resolve them quickly by knowing who to call and mobilizing the right people.”
A world class team ethic
Ultimately, Coughlin cites the talented team at Fluence, which he boasts is what truly sets the company apart. Key in this process was uniting the two teams from Siemens and AES that formed the backbone of the new company and subsequently merging them into one global team. He believes that in almost every area of the company, from innovation and ideas to the creation of new partnerships, this team culture has been essential to Fluence’s success.
“Given that we’ve doubled in size since 2018, we’ve added a tremendous amount of talent just in the past two years,” he said. “It’s not only about attracting the right skillsets, but the right people who fit with our culture and values. Culturally, we’re focused on responsibility in the way that we work; agility in terms of the speed with which we can make decisions and support our customers; and leadership in terms of driving the future of this industry. And finally, we believe in having fun together. That makes Fluence a very attractive place for our team to work and build their careers, both for the business opportunity it represents, and for the critically important mission to change the way the world is powered.”