Founded in 2008, Consert connects devices in the home like a water heater, heating and air conditioning units, pool pumps, and thermostats. The connected devices all talk to a smart meter, which has a Consert gateway inside, and Consert had been utilizing Verizon’s 3G network to connect back to its data center.

The Consert service monitors the energy consumption of these devices and uses them to participate in automated energy efficiency programs. Overall Consert had said its system can help a home owner save 10 to 20 percent on an energy bill. The company had done some trials in Fayetteville, N.C., with Rockwood Electric Utility, with CPS Energy, and Bluebonnet Electric Cooperative, but I hadn’t heard of many large commercial deployments.

Consert had managed to bring in a variety of high profile backers including GE Energy Financial Services, Verizon Ventures, Qualcomm and Constellation Energy. The company had raised at least $25 million.

The companies wouldn’t disclose the terms of the deal. It seems to me like this is yet another one of those startups that found itself knee-deep in the valley of death between pilots and commercial deployments and needed more funding or an acquirer to gear up. Toshiba says Consert will be integrated into Landis+Gyr.

The Consert service is also the latest startup to look to tackle the Internet of Things sector, where everything has a connection to deliver greater functionality. Check out Stacey Higgenbotham’s awesome Internet of Things primer this morning.

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To me this move connotes growing consolidation in the energy software and management industry. Tendril CEO Adrian Tuck told me back in January that he thought 2012 would be the year that the energy management players would have to “go big or go home.” Tendril earlier this year bought the assets of Recurve, which sold software to help energy auditors determine the most cost-efficient energy efficiency measures for their customers, and before that acquired Grounded Power for its behavioral analytics.

My other immediate thought on this deal: watch out Opower. Opower is a direct competitor with Efficiency 2.0, and now Efficiency 2.0′s residential and small business focused software have the backing of the well-funded C3.

C3 sells a variety of software-as-a-service products to help companies and organizations measure, mitigate and monetize carbon, energy and resources. C3 has a handful of announced customers including Dow Chemical, utilities PG&E and Constellation Energy and Abu Dhabi’s renewable energy company Masdar. Both SAP and Hara compete in this space as well.

While C3 has focused on helping companies and organizations manage energy consumption with software, Efficiency 2.0 has aimed at developing algorithms around energy efficiency recommendations for utility customers. Think about how Netflix and Amazon use your demographic and purchase information to recommend books and movies that you’ll actually like and possibly buy — Efficiency 2.0 developed software and websites that in work in similar ways to get home owners to reduce their energy consumption.

This move by C3, is the company’s way to tackle utility customers. Indeed in C3′s announcement of the deal on Tuesday, it quoted Saul Zambrano, Sr. Director, Products Group, Customer Energy Solutions, at PG&E, as saying that the combo product would create “a single source” for energy efficiency software for residential, small business, corporate and industrial customers.

C3 is well funded. Last year Siebel explained the way he raised money for the company as: “After a year of meetings, we sent an email on a Friday and raised $200 million by Sunday.”

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Chromatin’s plans

Chicago-based Chromatin said it has lined up $10 million – the first close of the D round – from investors including the venture arm of oil giant BP and the investing arm of product firm Unilever. Chromatin has developed a technology to genetically modify energy crops so that they grow fast and abundant, and its plant of choice if sorghum, a grass with some desirable, natural characteristics as a bioenergy feedstock, such as a high tolerance for drought and heat.

Chromatin wants to make money by selling its hybrid sorghum seeds to growers and license its technology to agricultural companies. The plants could be used to produce transportation fuel, electricity or chemicals for other products.

The company’s reach for commercial production may arrive sooner now that more cellulosic biofuel producers are finally getting on with building their first refineries. Generous government grants and loans have helped biofuel companies complete their technology development plans and build pilot and commercial plants. The U.S. Department of Energy last month finalized a $105 million loan guarantee to Poet to build a biofuel refinery in Iowa using corn cobs, husks and leaves, and a $132.4 million loan guarantee to Abengoa Bioenergy to build a plant in Kansas that will cover agricultural wastes such as corn stalks and leaves to fuel.

Mastering the processes of converting biomass to fuel is only one of the steps in boosting the country’s cellulosic biofuel production, however. Producing enough feedstocks is also important and could be a bottleneck for reaching the renewable fuel goals set by the U.S. government. Fuel giant Chevron certainly sees a shortage of feedstocks.

“There is a number of promising conversion technologies, but the limiting step is a lack of large-scale biomass feedstock,” said Des King, president of Chevron Technology Ventures, in an interview last month. King said 100,000 square miles of forests will be needed to produce 1 million barrels of cellulosic biofuel per day. Chevron formed a cellulosic biofuel joint venture called Catchlight Energy with Weyerhaeuser in 2008 to take advantage of Weyerhaeuser’s timberland holdings.

Genomics guru Craig Venter and his startup Synthetic Genomics also announced this week that they’re creating a joint venture around using genomics to create crops with a higher yield, lower cost, and better crop protection in an effort to use the crops potentially for biofuels.

However, transportation fuel may not be the first sources of profit for Chromatin’s technology. The company just signed a preliminary agreement with electricity producer Constellation Energy to test Chromatin’s sorghum to produce power at two plants in California. One plant current uses coal, while the other uses agricultural and wood wastes.

Zeachem’s goals

Meanwhile, ZeaChem said it has raised a $19 million Series C round as it marches toward commercializing its process of turning plants into fuel. Like many other biofuel companies, ZeaChem also is exploring the use of its technology for chemicals that can be used in products other than transportation fuel.

The Colorado company plans to bring a demonstration refinery plant online in Oregon by the end of the year, with an annual capacity of 250,000 gallons. ZeaChem recently received a $40 million grant from the U.S. Department of Agriculture to use the demonstration plant to produce blending fuels for cars and jets that run on diesel and other types of petroleum-based fuels. The company expects to produce the first batches of jet and diesel fuels in 2013 and gasoline replacement in 2015.

Birchmere Ventures led the $19 million round, which also came from investors such as Firelake Capital, Globespan Capital Partners and Mohr Davidow Ventures.

Image courtesy of Chromatin, and GigaOM

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Consert works by installing wireless nodes in a smart meter, and energy consuming devices like a water heater, heating and air conditioning units, and pool pumps. A home or building also gets a connected smart thermostat. The connected devices then all talk to the smart meter (which also has a Consert gateway inside), which in turn connects to Consert’s data center via Verizon’s 3G network. The home or building owner can monitor the energy consumption of these devices and participate in automated energy efficiency programs.

Consert, founded in 2008, says its system can help a home owner save 10 to 20 percent on an energy bill. The company has done a small trial of 100 homes in Fayetteville, N.C., but I haven’t heard of any other larger trials or commercial deployments.

There are a couple of things about using a 3G network for home energy management that could be interesting. The network can offer services in real-time, as opposed to once every 15 minutes, or once an hour or once every 24 hours, which is common for other utility smart grid networks. Also 93 percent of areas are covered by Verizon 3G, according to GE Energy Financial Services Managing Director Kevin Skillern, in a talk last year (he led GE’s investment in the company). Using energy management to help proliferate wireless broadband customers is also an unusual move, but it has clearly gotten the telcos to climb on board in this case.

However, one of the potential hurdles I see for the idea is that sending technicians to hook up HVAC systems, pool pumps and water heaters could get expensive. Though, Verizon could always help Consert tap into its broadband technician pipeline. Another hurdle is that consumers are just not all that interested in home energy management right now, and this market is still really early.

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Investors in the now infamous solar maker Solyndra think that the $535 million loan was actually part of Solyndra’s undoing, according to the Wall Street Journal. Those investors say that the loan added high fixed costs for the DOE-backed factory, and it was a disadvantage when the company wanted to raise more money from private investors, because the government had senior debt that would be paid back first (mostly, except for Solyndra’s final restructuring funds).

Other companies have passed on DOE loan guarantees altogether. Back in March solar company Suniva decided to “suspend participation in the loan guarantee program,” despite the company’s spending $750,000 on lawyers and consultants as part of its effort to secure the award. Suniva chief marketing officer Bryan Ashley would only say to us in an email earlier this year that “Given the continued uncertainty around the negotiation of acceptable terms and the final outcome, Suniva has decided to discontinue expending money, resources and time on the process at this time.”

Two years into its effort to obtain a guarantee on some $7.5 billion in loans, in October 2010, Constellation Energy declared the proposed terms and conditions for the guarantee “unworkable.” Together with French energy giant EDF, through a joint venture called UniStar Nuclear Energy, Constellation had requested the loan guarantee to support construction of a new nuclear reactor at the Calvert Cliffs power plant, in southern Maryland.

But in a letter to DOE officials, Michael Wallace, the chairman of UniStar as well as the vice chairman and chief operating officer for Constellation Energy, said the agency’s initial estimate for the “credit subsidy cost” (the expected long-term liability to the federal government when it issues the loan guarantee) was “shockingly high,” at 11.6 percent, or about $880 million. He wrote, “Such a sum would clearly destroy the project’s economics (or the economics of any nuclear project for that matter), and was dramatically out of line with both our own and independent assessments of what the figure should reasonably be.”

NRG Energy CEO David Crane told me earlier this year in an interview that in general “the government is requesting more and more conservative terms,” which may be comforting from the point of view of being a taxpayer but defeats the purpose of a program meant to provide debt financing where it wasn’t available from the private sector. He added, “If the government’s terms are more onerous than the private sector then it becomes sort of, what’s the point?”

The DOE still has billions of dollars in awards it wants to get out from its loan guarantee program before its end-of-September finale date. Now that there’s such high scrutiny on the program in the wake of Solyndra, applicants could be as gun-shy of accepting the awards as DOE officials are of handing out the money.

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In my weekly update at GigaOm Pro (subscription required), I get into this key complication raised by FERC’s issuance of Order No. 745 last week. If you missed the story, here’s a recap — FERC has decided that demand response, which turns down power use at end user sites like factories, office buildings and residential neighborhoods, should be paid a price that puts it on an equal footing with power generators in energy markets.

That’s kindof like Christmas morning for demand response operators — but they can’t open their presents just yet. The Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) tasked with creating these new markets have until July 2011 to file compliance statements that set tariffs and thresholds for the new rule. A full-bore plan for how to measure the cost-effectiveness of demand response resources in both the day-ahead and real-time energy markets — the markets that FERC has targeted in its ruling — isn’t due until September 21, 2012.

That gives regulators, grid operators and industry participants plenty of time to hash out one of the key conflicts inherent in this issue: the question of what constitutes cost-effective demand response. That question, in turn, is largely tied up in the issue of whether demand response providers should have to subtract the retail value of the electricity they avoid buying when they turn down power — the view of many power plant operators — or whether they should be able to take that reduction as a profit alongside the payment they get for their negawatts.

I get into those arguments in past GigaOm Pro reports (subscription required), and have covered them in past stories tracking the progress of this issue at FERC. In brief, power plant operators and energy company organizations have argued that letting demand response operators claim a full energy market price for the negawatts they deliver could distort the market and make the grid less efficient. Constellation Energy — an energy company that both generates power and delivers demand response via its acquisition of CPower last year — has argued that view in filings to FERC, in fact.

But most demand response providers say that giving their power-down technologies an equal value as generated power will open up new markets and new revenues for their technologies. Audrey Zibelman, CEO of virtual power plant software startup Viridity Energy, estimated that the ruling could lead to a doubling or tripling of the value of most demand response assets, mainly by widening the window of hours per year where they can compete against power plants in energy markets.

That’s good for existing demand response customers, and it also helps land new ones, said Gregg Dixon, vice president of marketing for big demand response provider EnerNOC. Right now, most of EnerNOC’s portfolio of about 5,100 MW of customer load is involved in so-called capacity markets, set up specifically for long-range planning for year-ahead power needs, Dixon explained. (By way of example, FERC’s recent order affirming that EnerNOC was following market rules in a pricing dispute with PJM pertained to those capacity markets).

Still, about 1,000 MW of EnerNOC’s customer base are signed up to deliver demand response in price-responsive energy markets like those FERC’s order are meant to address, he said. And putting FERC’s ruling into effect there could yield as much as a fivefold increase in the number of hours per year available for those customers to make money, he said.

More demand response isn’t just good for demand response providers, according to Zibelman, it could lower peak power prices for everyone. That’s because more competitors in the energy markets should drive down prices as the markets unfold on a day-to-day basis.

But that same market mechanisms lies at the heart of the power generators’ objection to FERC’s new rule. The concern is that demand response, if bid into markets at subsidized rates, could lower prices below those that big power plants need to realize a proper return on their investment. That could lead to some peak power plants shutting down, and new ones not getting built, which would pretty much cancel out the benefits of more demand response.

I’m curious to see how FERC’s process unfolds to take account of these concerns. As part of their market-planning process, FERC is requiring ISOs and RTOs to come up with “net benefits test” that can show when demand response is cost-effective. That’s a far too complicated subject to get into in this article, but if you’re interested, check out the section of FERC’s order (PDF) that deals with it. I don’t envy the grid operators that have to come up with these plans, but they should make for interesting reading.

Image courtesy of GeoCam20000 via Creative Commons license.

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Next comes the complicated task of making the nation’s power markets meet the rule. FERC’s order (PDF) will require wholesale energy operators to pay demand response resources the market price for energy, known as the “locational marginal price,” or LMP, as long as they can balance supply and demand as well as a generation resource. The rule applies to the Regional Transmission Operators (RTOs) and Independent System Operators (ISOs) that manage about two-thirds of the nation’s grid.

It’s early yet, but you can expect a slew of announcements today from big demand response providers like EnerNOC, Comverge and Constellation Energy praising FERC’s decision. Right now most of the demand response capacity in the country is managed in a piecemeal fashion, with many different prices paid for participation in different programs, most of them separated from the markets where energy is traded.

Even when demand response is permitted to participate in these more lucrative energy markets, it tends to receive less money per “negawatt” than does generated energy — usually by subtracting some portion of the power reduction’s retail price if the customer had used it. Power generators have supported these arrangements, arguing that giving full market price of negawatts constitutes double dipping — not only are utility customers saving money on power bills, they’re also getting to earn money by bidding that energy savings into the market.

But FERC’s order calls for a wholesale change to all these programs, by requiring all RTOs and ISOs to set up new tests to determine when demand response will be cheaper than generation to accomplish the same grid-balancing tasks.

It won’t happen right away. RTOs and ISOs have until July 22, 2011 to file compliance statements that set tariffs and threshholds for the new rule, FERC stated Tuesday. By September 21, 2012, the RTOs and ISOs will be required to submit results of studies that demonstrate “the requirements for and effects of directly determining the cost-effective dispatch of demand response resources in both the day-ahead and real-time energy markets,” FERC’s order states.

That makes sense, given the complications involved in adding a whole new class of participant to the confusing array of programs that buy and sell energy to balance grid frequency and voltage, supply emergency peak power and perform other functions.

But FERC has long held that these kinds of market changes will be needed to help demand response realize its full potential. FERC Chairman Jon Wellinghoff has called it the “killer app” of the smart grid. Indeed, in a recent dispute over demand response market rules between Mid-Atlantic grid operator PJM and demand response providers including EnerNOC, FERC ruled in demand response’s favor — an indication of where the commission’s sympathies lie.

Image courtesy of Matti.Frisk via Creative Commons license.

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EnergyConnect’s GridConnect platform serves up demand response dashboards to end-users — factories, office buildings, retail stores, etc. — that want to have some insight into what they’re turning on and off to meet utilities’ needs, and how much they’re getting paid for it.

It’s not exactly a startup: EnergyConnect got started in 2004 and had sales of $30.9 million in the first nine months of 2010, up 62 percent from the same period in 2009, the Milwaukee Journal Sentinel reported. The company sells software, rather than demand response, and works with partners including Serious Energy, Cisco and — no surprise — Johnson Controls.

The main difference in EnergyConnect’s platform, CEO Kevin Evans told me last month, is its end-user interface. Most demand response today is done either through old-fashioned phone calls and emails, or as a service from big aggregators like EnerNOC, Comverge or Constellation Energy.

GridConnect, on the other hand, is designed to give customers competitive information to choose the best demand response deal, Evans explained. The dashboard gives customers detailed information on how much power they’re turning down, indexed against different utility programs and how much they’re worth.

Evans insisted that EnergyConnect was unique in its customer-facing capabilities, though he noted Constellation Energy’s recently launched VirtuWatt platform emulated it in some respects. Indeed, giving customers greater insight into how they’re playing into demand response markets is something all the big companies in the field are working on.

In the past year, Lockheed Martin, Honeywell, General Electric and a host of other corporate giants have rolled out integrated demand response platforms. EnerNOC and Comverge are also busy rolling out platforms that can expand their interaction with customers, to include variable power pricing information or smart meter connectivity.

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Demand Response Spreads its Wings. Demand response provider Comverge got the ball rolling Monday with news of a rebranding — the company now offers “Intelligent Energy Management.” This new emphasis on services that go beyond turning down thermostats and factory lines comes as part of a growing trend in the demand response industry, with rivals like EnerNOC and Constellation Energy (via acquisition of CPower) all seeking to bring broader energy management services to their DR customers.

At the same time, demand response is moving into homes through smart meters — including smart meter networking startup Silver Spring Networks. On Tuesday, the rumored IPO candidate launched “UtilityIQ Demand Response Manager 1.0,” part of its suite of software for utilities to go along with the networking technology that Silver Spring now has in smart meter deployments across the country.

Not to be outdone, home energy management startup Tendril said it will integrate with Lockheed Martin’s SEEload demand response platform. The defense contractor has been getting into smart grid in a serious way, with a particular eye on enterprise-wide integration. Its SEEload platform is similar to Cooper Industries’ Yukon demand response platform now in use by more than 200 utilities. As for integrating different utility DR systems at a higher level, startup UISOL’s DRBizNet platform is being used by grid operators PJM, California ISO and Midwest ISO.

Deep Dives into Consumer, Weather Data. Tendril also took in a $23 million Series D round on Tuesday, and acquired tiny startup GroundedPower — a maker of a behavior-based energy efficiency program that could be tied into Tendril’s web-based consumer energy management platform. Startups like OPower and Efficiency 2.0 have been taking similar tacks, analyzing loads of data to offer targeted energy-saving tips. The idea is to leverage psychology as much as technology in the effort to change consumer behavior. As IBM CEO Sam Palmisano put it at the more policy-oriented GridWise Forum last month, the smart grid can’t succeed until everyday consumers can be engaged in saving energy.

What about the weather? AWS Convergence Technologies launched some smart-grid specific applications for WeatherBug, its weather tracking and data-crunching service. Of course, the utility industry is already heavy into weather — but whether it can translate reams of data into smarter, or even automated, energy saving systems remains to be seen (see New Opportunities in the Smart Grid on GigaOM Pro, subscription required).

The Public vs. Private Network Debate, Redux. GridWeek also saw a renewed pitch from public wireless carriers to use them, rather than utility-owned private networks, for more smart grid needs. SmartSynch, a startup that’s championing a cellular smart grid, pulled together a host of public carriers — T-Mobile, AT&T, Rogers Wireless, Qualcomm, Verizon and Sprint — to tout the industry’s growing cost-competitiveness against build-it-yourself smart grid networks from the likes of Silver Spring, Trilliant and others.

It’s true that most utilities use cellular networks for “backhaul” to connect utilities to neighborhood-level smart meter networks. Working against cellular’s advantages, however, are the regulatory frameworks that allow utilities to claim guaranteed rates of return from capital expenditures (i.e. from networks they install and own). That’s a powerful reason to buy rather than rent.

Most utilities have opted for private networks for smart meters, as seen in the recent round of projects receiving part of $3.4 billion in smart grid stimulus grants. As that money dries up, however, cellular carriers may find more room to compete, especially if they can keep lowering prices.

Giants Keep Marching Into EV Charging. Plug-in electric and hybrid vehicles are going to be a serious headache for utilities, and they’re looking to manage the influx of demand by integrating car charging into the smart grid. German power engineering giant Siemens was the latest to throw its hat in the ring at GridWeek, announcing its line of new smart grid-enabled EV charging systems and a partnership with enterprise software giant SAP to put it all together in a way utilities can manage.

In a project expected to launch within two months, initially simulating 10-50 electric vehicles, SAP and Siemens plan to demonstrate technology that can track an EV owner or operator’s electricity consumption across various charging stations, state lines and utility territories, and manage payment, SAP’s vice president of Industry Business Solutions Henry Bailey told us in an interview. Siemens also has a reseller deal with car charging startup Coulomb Technologies. Think of it all part of the increasing consolidation and commodification of the car-charging world.

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