Demand response, load shaping/shifting, solar optimization, energy efficiency and wholesale market optimization are all things utilities and retailers alike are obsessed with in today’s day and age. Traditional utilities realize that innovation is happening at a speed they can’t keep up with so naturally they are licensing software that provides each of these offerings as a way to keep up with the changing needs and demands of the electric grid.
Especially since these software tools when working together can help accelerate the decarbonization of the electric grid.
David Energy is taking a different approach.
While companies like OhmConnect and AutoGrid are providing software solutions to utilities – in some cases it’s possible to take their solutions globally – David Energy wants to vertically integrate these software solutions with the traditional retailer model. Where they can reduce electricity prices for large C&I customers quite significantly due to the ability to purchase power on the wholesale market and optimize customer energy use for the lowest cost of power.
It’s demand response and load management that’s paired with wholesale market rates. A win-win for both David Energy and their customers.
Why does this matter?
- It shows the pace of utilities is far too slow. Which is limiting the opportunity for programs to be piloted rapidly
- David Energy shows that with the right team and capital – $19M with their recent raise (debt/equity) – they can get a retail license to participate in the market as a buyer and actually deliver an aggregated savings to individual customers…without depending on the middle man – the utility.
Demand Response meet Wholesale Market Optimization
For most people – aside from energy nerds like myself – the act of “saving” money on electricity is not a priority action item. In fact most people only use savings as a late stage justification for why they are jumping on the idea and concept of signing up for a new rate plan or getting solar panels.
David Energy is hyper focused on working with large C&I customers that are actively seeking lower and new energy suppliers – even though it seems they have intentions to break into residential projects as well. By targeting those companies that are seeking energy savings David Energy can provide a fully integrated platform that will help not only guarantee lower cost of electricity, but also maximize their own profits in the process – making these projects highly interesting to watch.
I see David Energy integrating all these behind the meter services into one offering natively in the same way some see Hubspot or Salesforce offering every thing you need to run your business in one platform.
Rather than seeking service from 50 providers David Energy is the one stop shop.
Outlook
In reality the opportunity isn’t one that can’t be competed with.
Retailers that have left New York because of a failure to build such an integration out is just the culling of “bad apples” – However groups like ConEd and NYSEG have the capital and customer base to compete aggressively with David Energy should they quickly adapt and figure out how to scale and integrate behind the meter energy management services into their offering.
CCAs, Community solar providers across the US actively are working on and purchasing solutions that help them optimize energy usage behind the meter to maximize savings and profits based on wholesale market pricing and current energy contracts.
David Energy has a strong head start – a stronger team and an existing platform which can get them over the finish line. They don’t have to be a monopoly to win in the energy markets. But they sure have time on their side to eat up a large slice.
We should all be watching as James and his team makes their next moves.
About The Author
Swarnav has over 10 years of experience in the energy & climate tech space, holds 2 patents and is active in the tech, climate and media industries. He specializes in Product/Product Innovation as well as Go-To-Market and Growth Strategy.
By training he’s a Materials Engineer with a background in research from his time at Georgia Tech and University of Illinois (UIUC).
He founded TouchLight a utility backed energy company focused on developing IP for utilities and startups pushing electrification forward. He also serves as the appointed Chairman for the Town of Yorktown’s Climate Smart Communities Task Force, where he helps with drafting legislation and enabling sustainability efforts within the town.
Concurrently, Swarnav founded The Impact to help investors, emerging founders and driven climate enthusiasts discover and identify new climate-tech startups, technologies and opportunities before they hit the traditional media sources.