Sidewalk Infrastructure Companions, supported by Alphabet, spend money on start-up prospects to cut back vitality consumption
Given California’s ongoing blackouts, one company is hoping a new $ 100 million investment will help keep the lights on – by paying customers to turn off the lights.
On Monday, OhmConnect announced it had received $ 100 million from Alphabet-backed Sidewalk Infrastructure Partners to build the largest distributed clean power plant in North America. SIP invested $ 20 million directly in OhmConnect. The additional 80 million US dollars went into the construction of a virtual power plant called “Resi-Station”.
The Californian company OhmConnect was founded in 2014 and acts as an electricity supplier in times of high demand by switching energy offline. When the electricity grid is overloaded, the company sends alerts to customers asking them to reduce consumption, for example by turning off the air conditioning or stopping the dryer.
Although OhmConnect doesn’t generate electricity, it is classified as a power plant, which means it is paid for the energy it delivers from users who use less electricity. The company then passes some of the savings on to its customers and tracks usage through smart devices at home. According to CEO Cisco DeVries, the amount paid to each customer depends on a number of factors, including the current price of electricity. This year the company plans to pay its customers around $ 4 million.
OhmConnect works with dozen of smart home technology providers, including Google Nest, a partnership that was formed prior to the latest investment.
The company is also making the network more environmentally friendly, since during peak loads the power plants that are run up – so-called peaker systems – are usually operated with gas or oil, as they can run up at will, unlike solar or wind, for example.
If OhmConnect were a physical powerhouse, it could turn to the capital markets for funding, DeVries said, but its distributed network of thousands of customers across the state proved difficult, and that’s where SIP comes in.
“They’re actually funding us to build this new power plant as if it were physical even though it’s all spread out,” DeVries told CNBC. “It’s not just like that [building the next-generation of the grid] It’s important to keep the lights on and also for decarbonization. If we want to get more and more renewable energy on the grid, we need to be able to bend the demand in real time, ”he said.
Much of the funding will be used to expand OhmConnect’s user base. The company currently has around 150,000 active customers in California and expects around 750,000 more via Resi-Station.
For SIP, the funding commitment is the first major transaction for the Resilia platform aimed at making electrical systems bidirectional, transactive, and distributed.
“With this decentralized, clean power plant … we are rethinking the structure of modern power grids and enabling them to function more like a symphony than a solo – a series of systems for energy generation and energy generation that communicate and work together to secure electricity, cheap and efficient to deliver, “said Jonathan Winer, Co-CEO of SIP, in a statement.
SIP is independent of alphabetically supported Sidewalk Labs.
SIP’s $ 20 million investment in the company leads directly to OhmConnect’s Series C financing round. Previous supporters include venture capital firms Floodgate and City Light Capital, based in Silicon Valley and NY, respectively, and Tom Steyer’s Radicle Impact.
OhmConnect’s expansion comes as California seeks solutions to its legacy network. Solar companies, including rooftop installer Sunrun, have also announced virtual power plants, and microgrids are also popping up to ensure grid stability.
“We’re helping democratize access to clean energy. … 40% of our customers have lower and moderate incomes, and we often offer them the first smart device they ever had and the first tangible benefits of clean energy they did, “DeVries said.
OhmConnect also operates in Australia and Canada and plans to expand into Texas in 2021.