The Urgency of Energy Storage: An Angel Investor’s Perspective

Gail Greenwald, CEVG
May 28, 2014

Full article here

This column is about cleantech, but let me start with a personal story. My mother died of emphysema in 2011. For the last several years of her life, she was tethered to an oxygen concentrator, an electrically powered machine that stripped nitrogen out of air and produced an oxygen-enriched flow for her to breathe. A tank of oxygen also stood in the corner of her kitchen. It filled the portable tank she used when she went out and served as backup in case of a power outage.

Without oxygen, my mother could only function for a few minutes, and she lived alone. We worried that if a power outage did occur, especially in the middle of the night, she wouldn’t have enough time to get to the kitchen and switch over. Our anxiety was compounded in early 2009, when a major ice storm hit the region, causing a power outage that lasted several days and widespread tree damage, rendering roads impassable. With no other recourse, she spent several days in the hospital. In the aftermath, we persuaded her to install a backup generator, a very costly investment.

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According to Climate Central, weather-related power outages have doubled in the past decade. These outages aren’t cheap; the annual cost to Americans ranges between $20 billion and $55 billion. As the number of extreme weather events continues to rise due to climate change, we can surely expect the number of outages to increase as well.

For most of us, power outages are inconvenient. For people like my mother, they are life threatening.

When I was invited to write about a major pain point in the world of cleantech, I was sorely tempted to rail against the poisonous political climate and dysfunctional government that has, so far, done little or nothing to address climate change. That is certainly the major pain point in my world as a Boston-area angel investor, but the topic receives plenty of attention from others more qualified than I.

Instead, I decided to focus on a topic of interest for me personally and for the cleantech investment community in which I participate. That topic is energy storage.

Our cleantech future will be paced to a large extent by critical needs for energy storage. At grid scale, the growth of wind and solar power generation introduces the problem of intermittency: Power is generated only when the wind is blowing or the sun is shining. That energy must be either used or stored. If it is not needed at that moment and storage capacity is not available, it is lost.

As renewables become a larger fraction of our energy mix, the need for energy storage capacity increases. According to the Department of Energy, the US now has about 25 Gigawatts of available grid storage, only about 2 percent  of our generating capacity. The vast majority of this is pumped hydro, but as a number of other technologies are being developed and deployed, costs are coming down. My cleantech investment group was fortunate to make an early investment in one of these technologies. In general, however, they are too large and require too much capital for angel investors.

Predictive analytics and intelligent control systems also offer the promise for better demand side management, an approach that has been called virtual storage. We are also fortunate to have interesting investments in this area, and we are following with interest the progress of a host of new companies in this arena.

At much smaller scale, though, there is much to do to develop economically viable residential energy storage systems to further optimize our use of renewables and provide backup power when needed. In America, we are starting to see the introduction of home energy-storage systems to complement the enormous growth in residential solar installations—but they are very expensive.

In developing countries, solar-powered microgrids with battery-based storage are providing light and power in poor villages that previously had no—or very sporadic—access to electricity. The potential for microgrids to help these countries “leapfrog into a new energy paradigm” without grid-scale infrastructure is analogous to the cell phone phenomenon; it is a fascinating area of development.

I expect to be among the early adopters of residential energy-storage systems and will appreciate the security of having a backup power system, not to mention feeling good about using even more of the energy generated from the solar panels already on my roof. Yet, early adopters alone seldom add up to a viable business proposition or an attractive investment. So along with my colleagues in the cleantech investment community, I will be on the lookout for economically viable and reliable systems that offer the promise of wide-scale adoption.

The magnitude of the opportunity is clear. In developing countries, small-scale energy storage can be the key to dramatic improvements in quality of life. And here at home, affordable backup in a world of increasingly severe weather can also mean the difference between life and death.

Gail Greenwald is an active angel investor in the Boston area and a member of the Clean Energy Venture Group (CEVG) and the Launchpad Venture Group. In its eight-year history, CEVG has participated in over 80 rounds of investment across a portfolio of 20 companies and continues to actively evaluate a wide range of additional early stage investments in clean energy, energy efficiency, and sustainability.

Powerhouse Dynamics Raises $6M in Series B Funding

Business Wire
May 20, 2014

Full article here

BOSTON — Powerhouse Dynamics announced that it has raised $6 million in Series B funding. The round was led by Point Judith Capital and Constellation Technology Ventures (CTV). Existing investors, including SOSVentures and Vision Ridge Capital, also participated. The funding will be used to help ramp sales and accelerate the execution of the company’s comprehensive product roadmap.

Powerhouse Dynamics is the developer of the award-winning SiteSage™ enterprise energy and asset management system, designed for multi-site operators of small commercial facilities, such as restaurant, convenience store, and specialty retail chains. SiteSage customers include 6 of the 20 largest global quick service restaurant chains.

Zaid Ashai, partner at Point Judith Capital, said: “We have been very impressed with Powerhouse Dynamics’s approach to leveraging the “Internet of Things” to deliver energy management systems to a market that has historically been underserved and hard to reach with a cost-effective solution.”

Michael Smith, Constellation vice president and head of Constellation Technology Ventures, added: “Multi-site facilities face unique challenges when it comes to managing their energy use. Powerhouse Dynamics offers users an enterprise-level solution without incurring a large, upfront capital expense. We’re pleased with the initial response from customers and see significant potential for continued market growth.”

Constellation Technology Ventures is the venture capital arm of Exelon Corporation. CTV actively invests in early stage companies across the energy technology space with an eye toward commercializing new technologies across the Exelon platform.

SiteSage, formerly known as the eMonitor, is an enterprise-level energy and asset management system that allows customers to centrally control HVAC and other electrical loads with a highly intuitive web interface and mobile apps. It remotely monitors equipment and leverages patented analytics to diagnose performance issues and identify savings opportunities. SiteSage makes it simple to benchmark energy usage and equipment performance across facilities, allowing multi-location companies to identify and share best practices. The system was designed specifically for smaller facilities so, despite its sophistication, it features low cost, easy installation, simple operation, and minimum imposition on staff time.

“Adding investors of the caliber of Point Judith Capital and Constellation Technology Ventures is a great testament to what we have been able to accomplish in the market, and further evidence of the growing awareness of the importance of managing energy at smaller facilities,” said Martin Flusberg, Powerhouse Dynamics CEO. “Both of these companies will play integral roles in helping us drive the company forward. The funding will enable us to leverage the terrific momentum we have been experiencing, allowing us to scale much more quickly.”

About Powerhouse Dynamics
Powerhouse Dynamics is a privately held technology firm focused on using cloud-based controls and analytics to deliver energy and operational efficiencies to its customers. Thousands of locations, including restaurants, convenience stores, retailers, and others, use the SiteSage platform (formerly known as the eMonitor) to save money by centralizing control, analysis, and management of energy-consuming equipment. Engineered specifically for smaller facilities, SiteSage features powerful analytics delivered via simple online and mobile interfaces. The system continuously improves efficiency by controlling major loads, monitoring power consumption and performance of individual pieces of equipment, and tracking gas and water usage. Advanced analytics deliver actionable intelligence via diagnostics and alerts, and SiteSage’s enterprise-wide benchmarking helps identify stars and underperforming assets. To learn more about how Powerhouse Dynamics’ customers maximize energy and equipment maintenance savings with minimal staff effort, visit www.powerhousedynamics.com.

About Point Judith Capital
Point Judith Capital is a leading early stage venture capital firm based in Boston, Massachusetts. The firm focuses on investments in software and technology-enabled service companies. They have constructed the firm and their team around the strategy of building market leading companies with innovative founders and serial entrepreneurs. By taking an active approach to investing, the firm strives to build collaborative relationships with portfolio company management. The firm and its partners have backed market leading companies such as Nest (acquired by Google), Fidelis Security Systems (acquired by General Dynamics), Nexamp, and GetWellNetwork (acquired by Welsh, Carson, Anderson & Stowe).

About Constellation
The Constellation family of retail electricity and natural gas suppliers (www.constellation.com) are subsidiaries of Exelon Corp. and are leading competitive retail suppliers of power, natural gas and energy products and services for homes and businesses across the continental United States. Constellation’s retail businesses serve more than 100,000 business and public sector customers, including more than two-thirds of the Fortune 100, and nearly one million residential customers.

Exelon Corporation EXC, -1.48% is the nation’s leading competitive energy provider, with 2013 revenues of approximately $24.9 billion. Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with approximately 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. Exelon’s utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).

SOURCE: Powerhouse Dynamics

HB Agency
Perrin McCormick, 781-893-0053
powerhouse@hbagency.com

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