NGP Bets $200M on Battery Storage as AI Drives Power Crunch

Private equity firm NGP Energy Capital Management has committed $200 million to back Liminal Energy, a newly formed battery storage developer, as artificial intelligence workloads and data center expansion strain America's aging power infrastructure. The investment marks NGP's first dedicated platform in utility-scale battery storage after a three-year search for the right management team.

Liminal Energy, founded in late 2025 by former UBS Asset Management executives Ken-Ichi Hino and Mark Saunders, plans to develop stand-alone battery energy storage systems (BESS) of varying sizes across the United States. The company will also explore hybrid projects combining storage with renewable and gas-fired generation, according to Bloomberg.

The deal underscores how private equity is positioning itself at the intersection of AI infrastructure and power markets, betting that battery storage will become essential to managing unprecedented electricity demand growth.

The transaction provides Liminal with substantial growth capital to pursue utility-scale battery projects at a moment when grid reliability has emerged as a critical bottleneck for economic expansion.

The capital will fund project development, equipment procurement, and construction of battery storage facilities designed to stabilize grids, manage peak demand, and accelerate interconnection timelines for large industrial loads.

NGP's investment reflects a calculated bet on structural tailwinds driving battery storage demand.

"We spent three years searching for the right team to back in energy storage," said Sam Stoutner, co-head of energy transition at NGP, in comments to industry publications. The firm, historically focused on oil and gas, has been systematically increasing exposure to power and energy transition sectors.

For Liminal's founders, the timing capitalizes on their deep operational experience. Hino and Saunders collectively oversaw development of more than 3.5 GWh of energy storage during tenures at UBS, National Grid Renewables, and Goldman Sachs. Their team includes Jay Peterson, who managed over 6 GW of energy assets, and Roger Johanson, who brings 30 years of structured finance expertise.

"Demand growth driven by data centers represents real tailwinds," Hino told Bloomberg. Battery storage assets can reduce grid volatility, provide ancillary services, and enable faster connections for power-hungry facilities—addressing pain points that have delayed data center deployments across multiple markets.

The strategic logic extends beyond data centers. Extreme weather events, aging transmission infrastructure, and the intermittency of renewable generation have created persistent reliability challenges. Batteries store excess power during low-demand periods and discharge during system stress, effectively functioning as shock absorbers for increasingly strained grids.

Liminal Energy was purpose-built to address execution gaps in the energy storage sector.

The company operates a "lean, partner-amplified model" that spans supply chain, offtake agreements, construction, and asset operations. Rather than building large internal teams, Liminal leverages strategic partnerships to accelerate timelines and maintain pricing visibility while preserving control over critical decisions.

The founding team's background spans the full lifecycle of energy storage projects. Mark Saunders, CEO, holds a master's in electro-mechanical engineering from the University of British Columbia and an MBA from UCLA. His 25 years in alternative energy includes leadership roles at UBS, Goldman Sachs, and AeroVironment, where he oversaw more than 2 GWh of storage development.

Ken-Ichi Hino, president, brings nearly 20 years of experience across storage, solar, biomass, and natural gas generation. He holds an MBA from the University of Chicago and a BA from the University of Pennsylvania. His previous roles at UBS, National Grid Renewables, and Enovation Partners involved developing over 1.5 GWh of storage capacity.

Liminal's approach emphasizes aligned incentives. The company takes active roles and maintains long-term stakes in every project, ensuring outcomes benefit all stakeholders. This contrasts with pure-play developers who exit projects post-construction, often leaving operational risks with buyers.

The battery storage market is experiencing explosive growth driven by converging forces.

Data center electricity demand is projected to grow at unprecedented rates as artificial intelligence training and inference workloads proliferate. Utilities and grid operators face mounting pressure to secure capacity, but traditional generation and transmission infrastructure cannot scale quickly enough to meet demand.

Battery storage offers a faster path. Projects can achieve commercial operation in 18-24 months versus 5-10 years for new transmission lines or conventional power plants. This speed advantage has made storage increasingly attractive to utilities, independent power producers, and large industrial customers.

NGP's portfolio already includes Form Energy, which is developing long-duration iron-air battery technology, and Segue Sustainable Infrastructure, a renewable energy and storage developer. The Liminal investment complements these holdings by focusing on near-term deployable lithium-ion systems that address immediate grid needs.

Private equity's interest in battery storage has intensified as returns from traditional energy infrastructure face headwinds. Storage assets generate revenue through multiple streams—capacity payments, energy arbitrage, frequency regulation, and ancillary services—creating diversified cash flows that appeal to institutional investors.

The regulatory environment has also improved. Federal tax credits under the Inflation Reduction Act provide substantial support for stand-alone storage projects, enhancing project economics and reducing development risk.

NGP Energy Capital Management is a Dallas-based private equity firm with over $20 billion in cumulative equity commitments since its founding in 1988.

Originally focused exclusively on oil and gas, NGP has executed a deliberate pivot toward energy transition investments. Since 2005, the firm has deployed over $1 billion in the energy transition, backing companies like TPI Composites (NASDAQ: TPIC), Renewable Energy Group (sold to Chevron), and Community Energy (sold to AES Corp).

In 2020, NGP accelerated this shift, committing and investing over $600 million across more than 20 energy transition portfolio companies. The firm closed its fourth dedicated energy transition fund, NGP Energy Transition IV, at $700 million in June 2023.

NGP's energy transition portfolio spans multiple sectors:

The firm's investment thesis centers on the belief that the energy transition will require more than $100 trillion in investment over the next three decades to reshape the global energy system. NGP positions itself as a differentiated player with 34 years of energy-focused investing experience, providing operational expertise and strategic guidance to portfolio companies navigating complex, capital-intensive markets.

Chris Carter, NGP's managing partner, stated in 2023: "Energy transition is key to the future of NGP, and our investment activity in the space is accelerating. We believe NGP is a preeminent energy investor across the energy value chain."

The Liminal investment signals growing confidence that battery storage has moved from niche technology to essential infrastructure.

Several factors support this view. First, the AI-driven surge in data center construction shows no signs of abating. Major technology companies have announced tens of billions in capital expenditures for new facilities, all requiring reliable, low-latency power connections. Battery storage can bridge gaps while utilities upgrade transmission capacity.

Second, renewable energy penetration continues to climb. Wind and solar now represent 97% of net power capacity additions in developed markets, according to NGP. As intermittent generation displaces baseload fossil fuel plants, storage becomes critical to maintaining grid stability.

Third, extreme weather events are increasing in frequency and severity, exposing vulnerabilities in aging infrastructure. Texas's 2021 winter storm, California's rolling blackouts, and summer heat waves across the Southwest have demonstrated the consequences of inadequate grid resilience. Policymakers and utilities are prioritizing investments that enhance reliability—a category where battery storage excels.

Risks remain. Supply chain constraints for lithium-ion batteries could pressure project economics. Permitting and interconnection queues continue to delay projects in some markets. And technological competition from alternative storage solutions—including long-duration systems like Form Energy's iron-air batteries—could disrupt market dynamics.

But for NGP and Liminal, the opportunity outweighs the risks. The firm's three-year search for a storage platform reflects disciplined capital allocation, waiting for the right team and market conditions to align. With experienced operators, substantial backing, and favorable market tailwinds, Liminal enters a sector poised for sustained growth.

The deal also reflects a broader shift in private equity's approach to energy. Rather than viewing energy transition as a separate asset class, firms like NGP are integrating it into core strategies, leveraging decades of sector expertise to identify opportunities others might miss.

As utilities, corporations, and policymakers grapple with the dual challenges of decarbonization and reliability, battery storage is emerging as a rare solution that addresses both. NGP's $200 million bet on Liminal positions the firm to capture value from this convergence—and signals that the race to build America's next-generation power infrastructure is accelerating.