Case Study
Sector: Global Infrastructure
Region: North America
Lead Fund: Carlyle Global Infrastructure Opportunities
Acquisition Date: 9/20/2019

Reducing Carbon Emissions and Bolstering Grid Resilience in Montgomery County, Maryland

AlphaStruxure is a leading Energy as a Service (EaaS) provider that designs, builds, owns, operates, and maintains tailored energy infrastructure, including microgrids. AlphaStruxure aims to drive long-term outcomes on resilience, reliability, emissions reduction, and cost stability on behalf of its clients.

Based in Boston and operating across North America while leveraging global capabilities, AlphaStruxure is a joint venture combining Schneider Electric’s smart energy management and track record as a microgrid technology provider with Carlyle’s financial backing and comprehensive structuring capabilities. 

Global Head of Impact Megan Starr and AlphaStruxure’s CEO Juan Macias discuss how the company’s partnership has combined technical, financial, transactional, and structural expertise to develop an innovative, integrated energy and financial solution to enable Montgomery County, Maryland’s transit fleet to start to transition from diesel to electric, a critical step in the county’s goal to reach net zero carbon emissions by 2035.

Commercial and industrial businesses, as well as municipalities face rising energy costs, power reliability and resilience challenges, pressure to reduce carbon emissions, and government regulations. Meanwhile, global electricity demand is forecast to double by 2040, driven partly by increased electric vehicle use, electric conversion of heating and cooling, and digital infrastructure power demands.1  

The drive for sustainability has gained significant momentum across the U.S., with 75% of states establishing clean power generation goals. Technology for on-site power generation assets has improved, as solar and battery storage costs have both declined approximately 90% over the last decade.1 At the same time, energy security continues to become an increased focus driven by aging infrastructure, more constant natural disasters, and geopolitical concerns, such as the conflict in Ukraine. However, many organizations face capital constraints and lack the capabilities required to deploy their own comprehensive energy solutions on-site. 

In 2018, Carlyle estimated the U.S. commercial and industrial market opportunity for microgrid installations in the U.S. at approximately $380 billion of capital expenditures across 85 gigawatts of potential site capacity.1 Against this backdrop, the EaaS delivery model has emerged as a solution to help meet the growing demand for sustainable energy systems. Through Carlyle’s partnership, the Brookville Smart Energy Bus Depot project established AlphaStruxure’s foothold as an EaaS provider for public fleet owners. The project also establishes a competitive moat and positions AlphaStruxure to capitalize on strong market tailwinds with other potential customers. 

In 2021, AlphaStruxure began construction on an integrated microgrid and electric bus charging infrastructure project for Montgomery County. The project will enable 70 buses in Montgomery County’s transit fleet to transition from diesel to electric, and is projected to reduce lifetime emissions by more than 160,000 tons while delivering resilience to climate events and power outages. The Brookville Smart Energy Bus Depot is a first-of-its-kind integration of microgrid and EV charging infrastructure, delivering sustainability, reliability, and resilience for Montgomery County’s public transportation system. It represents an EaaS fleet electrification infrastructure project that integrates solar photovoltaic canopies, onsite generation, battery energy storage, microgrid controls, and electric bus chargers to ensure the fleet’s continuous operation through utility outages. With support from Carlyle’s Global Infrastructure platform and ESG and Impact team, AlphaStruxure developed an innovative solution to help Montgomery County meet its clean energy needs. 

The EaaS business model eliminates the upfront cost to the County for the project, including all microgrid and charging infrastructure, allowing the County to make this transition with no impact to the farebox or tax payers. The project provides long-term cost predictability for energy supply over a 25-year contract, and ensures that their bus fueling operations are not exposed to increasing utility tariffs. The electric buses are also nearly silent, which improves the quality of life for anyone who rides the bus, walks, bikes, or lives near the bus route. 

Electrifying Montgomery County’s bus fleets will bring the county one step closer to meeting their ambitious climate goals. Furthermore, the Brookville Smart Energy Bus Depot, set to come online in 2022, marks a major milestone for the industry and demonstrates a sustainable path for other counties and cities to follow in the energy transition.

Carlyle believes these selected case studies should be considered as a reflection of Carlyle’s investment process, and references to these particular portfolio companies should not be considered a recommendation of any particular security, investment, or portfolio company. The information provided about these portfolio companies is intended to be illustrative, and is not intended to be used as an indication of the current or future performance of Carlyle’s portfolio companies. The investments described in the selected case studies were not made by any single fund or other product and do not represent all of the investments purchased or sold by any fund or other product. The information provided in these case studies is for informational purposes only and may not be relied on in any manner as advice or as an offer to sell or a solicitation of an offer to buy interests in any fund or other product sponsored or managed by Carlyle or its affiliates. Any such offer or solicitation shall only be made pursuant to a final confidential private placement memorandum, which will be furnished to qualified investors on a confidential basis at their request.

1 BloombergNEF, McKinsey & Company, EIA, National Conference of State Legislatures, SE, U.S. Department of Energy, Wood Mackenzie, publicly available information.

Global Infrastructure