The Grid Tech 150 - Identifying the Leading Utility Partners and Applications
Paul Sayour | September 2022
In a decade from now, the power sector could be a very different place.
Imagine an energy landscape, where production from abundant wind and solar resources is forecasted real-time by AI-driven prediction algorithms to successfully leverage grid-scale storage, match current energy demand, and solve the challenges of diurnal variability. Rather than suffer an unexpected catastrophic failure of a piece of rotating piece of equipment on an offshore turbine, utility asset management teams predict the issue days in advance using a digital replica of the asset to run scenario testing and identify failure modes. A field worker that has been trained for this exact job using Virtual Reality simulations is then deployed to repair the machinery, equipped with an Augmented Reality embedded hardhat that displays step-by-step directions and highlights danger zones to avoid during the operation.
While the turbine is down during planned maintenance, instead of powering up a fossil fuel peaker plant to compensate for lost capacity, the local utility aggregates prolific residential DERs to be auto-dispatched in concert, satisfying real-time energy demand and supply predictions of renewable resources. These DERs include a plethora of EV’s that are interconnected to the grid with vehicle-to-grid (V2G) capabilities, functioning as batteries that can provide much needed capacity or ancillary services to the grid in times of need. Especially during summer months, when heat waves cause demand surges in populous regions, energy stuck in congested transmission and distribution lines is rerouted to open lines through optimized power flow controls, eliminating congestion charges and reducing customer outages. All the while, independent grid operators and utility energy managers have complete real-time visibility of regional energy flow, wholesale market transactions, outage areas, and customer DER locations, ensuring carbon-free, reliable, and cost-efficient power for their customers.
This new energy paradigm is within reach. A growing ecosystem of vendors, investors, and utilities have been disrupting business-as-usual in the energy sector with innovative solutions that have outpaced and outmatched traditional utility operations. This community of innovators has effectively set the stage for achieving the digitization and decarbonization goals that will define the remainder of the 2020s. However, successful transformation of the power sector is not imminent; it requires inter-disciplinary collaboration, strengthened utility-startup ties, capital investment in grid infrastructure upgrades, and a willingness to innovate in order to track to the ambitious targets and improved operations that the utility industry is aiming for. In part one of our series on the evolution of Grid Tech we looked at the macro market conditions and how the industry is poised to deliver on ambitious goals, in this piece we turn our attention to the readiness of supply side, and in particular startups, and examine the maturity of new applications that will enable the grid of the future. For a deeper dive, please download our Grid Tech introductory report, The Decade of Deployment.
Enabling the Utility of the Future
With the evolution of the global energy landscape, utilities must be willing to reexamine their place in an increasingly digitized and decentralized world. This requires developing integrated, enterprise-wide strategies to address pressing challenges such as rising energy generation and delivery costs, increasing customer satisfaction demands, and demanding decarbonization drivers.
Nevertheless, it can be challenging for utilities to build and implement effective modernization programs due to market asymmetries in the efficacy of frontier technologies and a highly complex vendor marketplace. In order to address these challenges, framing the Grid Tech landscape, the multibillion-dollar software and hardware market that empowers the next-generation utility, will serve power companies well. Grid Tech is the evolution of the smart grid market, generating source agnostic and largely dominated by software players. In this piece, we highlight the top startups and breakdown the 6 key submarkets of Grid Tech with commentary on some of the top performing vendors.
The Grid Tech 150: Vendor Landscape Insights
There are thousands of vendors that range from pre-seed startups to incumbent OEMs, that span the utility value chain. Even more challenging is determining where vendors play in the tech stack: vendors may deliver point applications such as asset monitoring sensors and historical databases, or they could provide turn-key Asset Performance Management (APM) platforms that are configurable to a utility’s assets and requirements. Due to the sheer volume of providers and increasing complexity of the landscape, it is difficult for utilities to solicit high value vendors that will meet their needs.
To solve this, we have assembled the “Grid Tech 150”, a list of top global companies serving utility solutions across the Grid Tech submarkets. The Grid Tech 150 was compiled from our database of vendors, use cases, and utility implementations. Companies were selected across a series of factors including frequency of deployment, recent fundraising activity, market strategy, and growth potential.
Vendors are categorized by submarket, with the quantity of vendors reflecting each submarket valuation. The market is flourishing and is receiving attention from high profile investors from across the financial sector, including established private equity firms, utility venture arms, ESG-focused climate funds, and venture capital funds. By way of example, our analysis suggests that just in the past 2 years, there has been over $23 billion invested in startups, M&A activity, and SPACs with the eMobility and Flexibility submarkets receiving the majority of funding. It is also important to note, while this list is indicative of the some of the top funded startups, there are hundreds of other qualified vendors, both startup and incumbent, that serve high value use cases in the Grid Tech market. Overall, to better support successful vendor selection, utilities, investors and deployment partners will be well served to become acquainted with the domains in which these vendors play and innovate.
Grid Tech Submarkets: An Overview
There are six core submarkets that comprise Grid Tech, spanning the entirety of the utility value chain from generation to customer. The submarkets are as follows:
Flexibility
Robotics & Connected Worker
Optimization Technologies
Core Systems
Digital Asset Management (DAM)
eMobility
In each submarket startups play a critical role in shaping the future state of the power industry and are heavily featured in our deployment analysis. To introduce this landscape and the Grid Tech 150, in this piece we provide submarket overviews and spotlight some innovative deployments
Flexibility
At its core, the Flexibility submarket includes types of innovative technology that provide load balancing and resilient energy alternatives in times of uncertainty. Technologies could include microgrid software for islanding during outages, demand response systems for peak load curtailment, or battery and building management systems for added flexible capacity. Solutions such as Distributed Energy Resource Management Systems (DERMS) and Virtual Power Plants (VPPs) unlock residential DERs full value through aggregation and wholesale market access. Across the sector we are seeing power companies leverage innovative startups to procure new and elastic modes of delivering energy services that do not rely on traditionally restricting systems.
Deployment Spotlight - Virtual Power Plants (VPP) Enable Flexible Capacity
Some of the most innovative use cases within Flexibility are Virtual Power Plants and Distributed Energy Resource Management Systems (DERMS). These software tools empower utilities to aggregate customer DERs, creating new DER-based tariffs and unlocking significant sustainable, low carbon capacity without building out additional infrastructure. The implementation of FERC Order No. 2222 coupled with the high influx of financial capital into VPP/DERMS startups are helping to shape up a health submarket with high growth potential. One top vendor delivering these solutions is Swell Energy, already boasting multiple successful deployments with utilities in different ISOs and RTOs.
Robotics & Connected Worker
Robotics & Connected Worker delivers empowerment and productivity where workers interact with assets. Unlike other submarkets, Robotics & Connected Worker solutions integrate existing hardware like worker wearables and Unmanned Aircraft Systems (UAS) with Extended Reality (XR) and AI-based software to modernize antiquated utility workforce processes and management systems. Technology such as smart helmets and Virtual Reality goggles improve safety conditions for workers through locational tracking, real-time digital assistance, and virtual simulation for difficult and dangerous scenarios. Other use cases expedite maintenance and repair jobs, ultimately slashing utility O&M costs and boosting worker productivity. As such, a robust Robotics & Connected Worker initiative is essential for any utility’s digitization plan.
Deployment Spotlight - Damage Prevention for Gas Infrastructure
In this submarket, we are seeing a high proliferation of AI/ML techniques to engender connected worker technology and improve the value of robot payloads. One particularly successful application of this technology is the prediction of successful gas system maintenance projects by startup Urbint for National Grid’s New York gas infrastructure. Urbint’s proprietary algorithms not only forecast the likelihood of a valuable maintenance endeavor, but also the safety risk associated with that project. Through this solution, National Grid reduced their Damage Rates by 37% in only 4 years, indicating that this could be a valuable effort for other utilities with extensive gas infrastructure.
Optimization Technologies
As constructing new transmission assets is costly and oftentimes inefficient, utilities need alternative solutions to satisfy the accelerating demands on the grid. Optimization Technologies offer the opportunity to implement frontier software and hardware developments to retrofit the grid and maximize the investment in existing transmission and distribution infrastructure. Innovations such as Grid Enhancing Technologies (GETs), which include Dynamic Line Rating (DLR), Topology Optimization and others, along with solutions that enhance situational awareness. Rather than undertake expensive capital projects, utilities can defray high fixed costs though supplemental Optimization Technologies solutions.
Deployment Spotlight - Dynamic Line Rating (DLR) Increases Line Capacity
There have been a multitude of successful deployments of GETs at utilities. One of the more popular is Dynamic Line Rating (DLR) to increase overhead line capacity. Overhead line ratings are calculated based on parameters inherent to the design of the cable as well as the environmental conditions to which it is exposed. Typically, these ratings are static; however, DLR enables utilities to vary the thermal capacity of the overhead line by actively monitoring conditions in order to maximize loading in real-time and reduce congestion charges. One high value vendor delivering DLR solutions in LineVision, with successful implementations of this technology at Xcel Energy to help unlock additional capacity on their transmission lines.
Core Systems
In recent years, as innovations in software have proliferated throughout the power sector, utilities have been opting for more agile, integrated systems of management. The Core Systems submarket encompasses new software that utilities have been deploying to either supplement or supplant legacy systems. These applications include Advanced Distribution Management Systems (ADMS), Customer Information Systems (CIS) and Customer Relationship Management (CRM), Geographic Information Systems (GIS) and Weather Forecasting Systems, and others. Utilities can leverage these software solutions to enable customer digital activation through utility marketplaces, access more grid control and visibility through tools like volt-Var optimization (VVO), and facilitate adoption of DERs through accurate weather forecasting
Deployment Spotlight - Using ML-powered Application for Renewable Bidding
With the proliferation of renewables and DERs, energy markets will see a drastic shift from traditional pricing schemes. Their variable production models alter supply curves, thus affecting Location Based Marginal Pricing (LBMP), and utilities will need to refresh their regional price forecasting capabilities. New methods such as AI/ML are well suited to help utilities adapt their market bidding functions to the new renewable penetrated market. Startup Myst AI has partnered with Enel to marry their renewable production forecasting with accurate pricing prediction for Italian energy markets.
Digital Asset Management (DAM)
Although it is a mature market, Digital Asset Management has been elevated by AI/ML fueled software solutions and the emergence of the one-stop-shop Asset Performance Management (APM) platform. Utilities have at their disposal algorithms to make sense of the data deluge that is stored in historians and maximize their assets’ potential. With the adoption of a robust digital asset management strategy, utilities can reduce unplanned outages and unnecessary planned work, opting for predictive forecasting and financially optimized maintenance.
Deployment Spotlight - Enabling Vegetation Management with Machine Learning
A valuable use case with growing popularity is managing vegetation encroachment around Transmission and Distribution infrastructure (Transmission Right-of-Ways, Wooded Distribution Poles, etc.). Oftentimes, utilities enlist arborists or biologists with local expertise to help identify potentially hazardous vegetation around valuable infrastructure. Using ML techniques and satellite imaging, Overstory can remotely spot vegetation encroachment and predict its growth trajectory to better target utility’s maintenance schedules and truck rollouts.
eMobility
With transport accounting for a quarter of global greenhouse gas emissions, electrification will be key to achieving ambitious environmental goals. According to the IEA, EVs will account for about 7% of the road vehicle fleet by 2030 and sales reach almost 15 million in 2025 and over 25 million vehicles in 2030, representing respectively 10% and 15% of all road vehicle sales. While today's grid impact from EV charging infrastructure is modest, demands could change rapidly. Utilities can reduce grid impact by counting on integrated software embedded in EVs and charging locations. Integrated software allows utilities to have remote monitoring and control of EV chargers. Operators can then aggregate and shift EV loads to balance the grid. In addition to home charging, utilities can manage the power needs of the increasing number of public, corridor, and fleet charging sites on the multi-megawatt scale.
Deployment Spotlight - Customer Intelligence in Informing EV and Propensity Modeling
While EV Charging Infrastructure remains the most financed use case in eMobility, we are seeing other high value applications emerging. Vendors such as Bidgley are partnering with utility giants such as Duke Energy to optimize participation in EV related tariffs.
Building a Deployment Dream Team
As public and private funding becomes more available and deployments ramp up across the power sector, utilities will be well served to familiarize themselves with their digital capabilty maturity. This process entails understanding the vendors, use cases, and deployments across the industry and aligning those with their unique jurisdictional metrics. Power companies can take advantage of a mature and high growth vendor landscape to drive towards decarbonization and digitization goals during this decade of deployment. Assembling a “Grid Tech All-Star Team”, developing an interoperable reference architecture, and quickly scaling proof of concepts will accelerate a host of returns for power companies.
It is critical for the power sector to identify the best solutions, create the most high-value partnerships and deliver at scale. The first step in this process is identifying commercially available solutions and partners. The Grid Tech 150 is an evolving lens that tracks high-value deployments across the utility value chain. Readers can access more information on the Grid Tech market and the Grid Tech 150 in our research hub and dive deeper in our complementary Grid Tech report, The Decade of Deployment.
Finally, to better outline this journey, our upcoming installment in this article series will discuss how utilities can embrace frontier technologies and significantly unlock the value of their digital innovation roadmaps by examining trends in SaaS, distributed intelligence, and robotics.