🔋 #007 — Distributed Energy Resources

The modern grid is distributed. Powered by solar, battery storage, energy efficiency, and demand management.

December 14, 2022

Happy Wednesday!

The first episode of Climate Tech Brief was on Community Solar. There’s a broader, adjacent concept that might be more critical to the energy transition - Distributed Energy Resources (DER).

Every year, electric utilities spend more than $100B in capex just to maintain the existing grid infrastructure. DER is an evolution of the modern grid that is not only key to electrification, but also more resilient and sustainable in the face of increased frequency of major climate events.

This presents major opportunity for the solar, storage, energy efficiency, and demand management sectors, as well as the picks and shovels needed to drive the energy transition like construction and field tech.

📣 TLDR

Distributed Energy Resources (DERs) increase reliability and sustainability of power and are essential to adoption of electrification and decarbonization.

😬 Problem

The availability of renewable energy resources like solar and wind varies.

🎯 Solution

Distributed Energy Resources (DER) systems are connected to the grid or operate independently to increase reliability and sustainability.

Modular devices like solar panels, battery storage systems, electric water heaters, and heat pumps, as well as the software that powers them, provide small and medium scale power generation for everything from rooftop solar to large wind farms.

💪🏼 Innovators

DER startups providing solar, storage, energy efficiency, and demand management.

  • Voltus provides cash-generating energy products to commercial, institutional, and industrial customers.

  • BlocPower provides all-electric heating and cooling for a healthy, green, comfortable home, targeting low-income communities.

  • ChargePoint develops and manufactures residential electrical vehicle charging stations.

  • Form Energy develops and commercializes a low-cost battery system that can store wind and solar energy for a long duration.

  • Bloom Energy offers on-site power generation systems that can use a wide variety of inputs to generate electricity.

  • Arcadia is a climate software and data company that specializes in decarbonizing the electric grid, and enables community solar.

  • Elephant Energy provides a fast, simple, and affordable way to reduce your carbon footprint.

  • Reach builds long-range wireless power networks that deliver scalable and resilient energy infrastructure.

⚡️ Opportunities

  • Provide the picks and shovels to aid the Constructing the Energy Transition 

    • Billd is a construction finance company that offers material purchases at 120-day terms to the construction industry.

    • Fieldwire is a field management platform that offers a wide range of device-agnostic features for general and specialty contractors.

    • Sitetracker is a SaaS platform for deploying, operating, and servicing critical infrastructure and technology.

    • DroneBase is an aerial data analytics platform that provides aerial drone services for construction, including renewable energy like solar and wind.

  • Turn your home or building into a Virtual Power Plant. Sell excess energy back to utilities.

    • Swell Energy is a home energy company that provides smart grid and energy management solutions for homeowners and businesses.

    • EnergyHub connects utilities to DER customers to help manage volatility

    • Leap provides the infrastructure that connects DERs to wholesalers

  • Make energy management and usage more efficient, regardless of power source.

    • Phononic has raised $215M to develop thermoelectric chips designed to offer an alternative to compressor technology and traditional methods of refrigeration.

    • Sealed raised raised $29.5M Series B offers smart home retrofits and turnkey project management to upgrade home easily.

    • Ostrom raised $10m Series A is an energy management platform that makes green electricity affordable and straightforward for households in Germany and Europe.

    • Custom Cells raised $63m Series to build energy storage that can be optimized to chemical, battery and battery module level based on your requirements.

⚠️ Challenges

  • Adopting DER can be costly. New financing options for energy projects - from construction to devices like solar panels, batteries, and smart homes - that align with cost reductions over time are essential.

  • Legacy industries like energy, utilities, and construction are slow to innovate. Katerra raised over $1B but couldn’t get construction companies to adopt their platform.

  • Supply chain bottlenecks slow construction. Visibility and traceability, as well as domestic manufacturing, can accelerate adoption.

😈 Devil’s Advocate

“The grid and a generator already provides enough reliability”

Wildfires and other natural disasters can knock out power for weeks. Battery storage and renewable energy that doesn’t rely on the grid is a better option for homes, as well as essential services like hospitals and community centers.

“DER for homes is cost prohibitive and only accessible to the wealthy”

Affordable financing is needed. Subsidies help. But 64% of people live in rentals, so we need a way to entice landlords.

🚀 Takeaways

  • Energy and utilities companies are single points of failure and averse to major change. Distributed Energy Resources (DER) systems offer more resiliency on a smaller scale that can be adopted faster.

  • Solar, storage, demand management, and energy efficiency technologies work together to enable DER.

  • Adjacent technologies and services, like financing and construction, are barriers to adoption and opportunities for startups. Reducing overall energy costs for consumers will drive adoption.

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