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Summary:

One of the reasons energy storage for the grid isn’t widely used is that many of the technologies, like batteries, are still too expensive. But what if you could use something that costs a fraction of a battery to deploy for grid storage, like Software-as-a-Service?

CUEimage1

One of the reasons energy storage for the power grid isn’t widely used is that many of the technologies, like batteries, are still far too expensive to be used at grid scale. But what if you could use something that costs a fraction of a battery to deploy for grid storage … like Software-as-a-Service? On Thursday, a startup called Clean Urban Energy (CUE) launched its SaaS product, which uses commercial buildings essentially as thermal batteries, and announced a $7 million investment from VCs Battery Ventures and Rho Ventures.

Here’s how it works: CUE makes a deal with a building owner, then plugs the company’s software into the building’s management system. Over a two-week period, the software crunches the energy consumption and HVAC system data, pulls in outside data like weather and temperature, and eventually creates a model and baseline for how the building consumes energy and how best to optimize that energy use.

The software then is able to shift parts of the building’s energy use via the HVAC system to times of day when a utility’s rates are lower and when there is less demand on the grid. So, say, a building could be subtly pre-cooled on a hot day, before the utility’s peak times occur and the rates are a lot higher. The software can do this without changing the comfort of the people in the building, says Battery Ventures Partner Jason Matlof.

CUE says it can save building owners 15 to 30 percent in energy savings from their HVAC systems. For utilities, the buildings are turned into sort-of thermal batteries that can store energy during peak times, and can enable building owners to participate in utilities’ variable pricing programs.

In contrast to many building management systems that use sensors and extra hardware installed throughout a building — and take weeks or months to integrate — CUE uses no extra gear, and just relies on the building management system and its model to start to work. The system can cost less than $10,000 to get up and running says Matlof, and the low capital required is one of the reasons Battery Ventures funded the company.

The smart algorithms came from the work of one of CUE’s founders, Gregor Henze, a professor at the University of Colorado at Boulder, who previously wrote his dissertation on optimal control of thermal energy storage systems. The model is able to accurately predict how the building is going to respond to the current environment in real time and adjust the HVAC system accordingly, says Matlof.

Battery Ventures has backed other low-capital-intensive energy efficiency software plays like networked lighting company Redwood Systems. “We’ve avoided the kinds of companies that get stuck in the Valley of Death, like thin-film solar, utility-scale solar thermal and electric cars,” says Matlof.

CUE’s software reminded me a bit of some of the projects that smart thermostat service company EcoFactor has done, optimizing demand response events for utilities. Though EcoFactor is concentrating on residential buildings, and not, say, a 70-story commercial building that’s in CUE’s cross hairs, the two companies are similar in that they both use big data and predictive algorithms to focus on HVAC as the pain point in a building.

CUE has already done 12 pilots with its software (two in the Chicago area) and has just started selling its software commercially.

Image courtesy of CUE.

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  1. Storage implies you can get the energy back at some point. Here you never get energy back, this is not energy storage.

    1. You don’t store energy as electricity, but as heat(or cold). Which you will use later on. This kind of low cost programs are briliant and should be implemented on a large scale asap. Maybe power companies or another 3rd party could place this at normal households as well in return for lower energy charges.

  2. Jack Studer Friday, July 8, 2011

    How many utilities actually offer variable pricing to their end customers?

  3. Beth Cushing Monday, July 11, 2011

    Mikael: CUE technology is no different than traditional thermal energy storage, except in that CUE uses a building’s existing thermal mass as the storage medium. Therefore, with CUE technology, a building can store thermal energy without high capital expense or space required to install new equipment.

    Jack: Variable prices are available in all markets across the US. In regulated markets, all utilities offer time of use rates to their end customers. In deregulated markets, customers can access variable rates (either time-of-use or day-ahead) through competitive suppliers. For maximum economy, CUE recommends buildings enroll in variable rate plans. However, CUE technology can achieve substantial cost savings for customers enrolled in flat rate plans by reducing peak demand charges and optimizing participation in economic demand response programs.

    For more information, please visit http://www.cleanurbanenergy.com.

    Beth Cushing
    Clean Urban Energy

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