Mitsui has invested in a whole variety of smart grid and smart lighting startups including Redwood Systems, and Tres Amigas.
Viridity has also raised money from Intel Capital and Braemar Energy.

Here’s a video with Viridity Energy SVP Western Regional Division Laura Manz:

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• The fourth quarter of 2012 in cleantech
• Cleantech and investment in 2013

Braemar starting raising this fund last year, which I reported on via an SEC filing back then. Braemar has had a few successful exits, including lithium ion battery company A123 Systems, which went public back in 2009, algae fuel company Solazyme, which went public in 2011, and EnerNOC, the demand response player that was one of the first next-gen energy companies to go public.

Other companies that Braemar has backed include nuclear fusion company General Fusion, ultracapacitor maker Ioxus, solar company Stion, and virtual power plant company Viridity Energy. Braemar’s managers say collectively they’ve invested in over 60 companies in energy tech and have delivered more than 20 exits.

A spokesperson for the firm says it focuses on energy technologies, which are “not to be confused with cleantech.” Somewhere along the way cleantech became a dirty word for venture firms and limited partners. Braemar thinks its focus is a value add and a spokesperson says: “LP’s are seeking to invest in specialist funds given the volatility of the market.”

Braemar is unusual in the VC community. A significant portion of the general venture capital firms that got into cleantech investing a few years ago have now pulled back after not having much success. Investors like Kleiner Perkins, Draper Fisher Jurvetson and Index Ventures have pulled back on investing in cleantech. That trend has led many to wonder how the next-generation of early-stage cleantech startups will be able to do research, grow and scale.

Limited partners in Braemar’s fund include: MassMutual, Alpinvest Partners, Morgan Stanley Alternative Investments, Macquarie, GIC Special Investments (the Government of Singapore), Munich Re, HarbourVest, the State of Rhode Island, RIT (Rothschild Investment Trust), Invesco on behalf of the California State Teachers’ Retirement System (CalSTRS), and utility AEP (American Electric Power).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• Cleantech and investment in 2013
• Ups and downs for cleantech in Q1

Fifteen million dollars will be just a drop in the bucket on the way to Tres Amigas’ plan to build a so-called “SuperStation” — the mother of all substations — which would convert alternating current (AC) from the three grids into direct current (DC) and then back to AC in order to move the electricity back out onto the three grids in an efficient and reliable way. Two years ago, the Wall Street Journal reported  that the project could cost a whopping $1 billion to build.

The SuperStation is supposed to use superconducting cables from American Superconductor Corp., which can carry 5,000 MW of electricity and are super-chilled to minus 300 degrees Fahrenheit. Many transmission leaders think high-voltage direct current power lines will be a key to remaking the power grid.

Tres Amigas’ project at one time had an endorsement from New Mexico Governor Bill Richardson to build the transmission link in the city of Clovis. While the U.S. already has a couple of substations that link two of the nation’s grids via the AC-DC conversion, Tres Amigas says a substation in Clovis would be the first one that would be able to synchronize electricity from all three grids. That means the three grids could finally share power, and it will create what Tres Amigas calls, “a power market hub.”

Phil Harris, the former CEO of PJM Interconnection, founded the company, and Tres Amigas plans to charge a fee for use of the SuperStation. While the project has a lot of hurdles ahead, I’m excited to see some outside-the-box business going on in the heavily regulated transmission sector.

Some of the potential hurdles for the project include: It will need a lot of fund-raising, bureaucracy and working with FERC, and NIMBY for people in the area of the SubStation and the transmission lines connecting it.

Tres Amigas has teamed up with other startup partners to work on the project, including battery grid storage company Xtreme Power, and energy software provider Viridity Energy. In August, Tres Amigas said it planned to submit filings with FERC later this year, which would include a first “anchor” customer contract.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 3 baby steps toward greener data centers
• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• Green IT Overview, Q2 2010

Scoring a connection with massive energy player Siemens is an important win for Tendril. Siemens said last year that it wants to double its current growth rate in the smart grid sector to capture €6 billion ($8.48 billion USD) in global business over the next five years, and Siemens said in the release Monday that since 2000, Siemens VC has invested more than €30 million euros ($43.13 million) into smart grid technology.

While Siemen’s energy gear peers — including Schneider Electric, ABB and GE — have been acquiring smart grid companies as a way to expand, Siemens has opted for partnerships and investments in startups. Siemens has announced partnerships with meter software management company eMeter, BPL Global and Viridity Energy, among others.

The market for home energy management services could one day be large — Pike Research estimates the number of home energy management systems globally deployed could reach 63 million by 2020, up from a little more than 1 million in 2011. But market growth is plagued by several hurdles, including a lack of interest from consumers and slow moving utilities. The market is fragmented (split between consumer-focused players and utility-focused companies), but also is very competitive in terms of the amount of startups and vendors that have emerged with new solutions.

On Monday morning, the Obama administration also launched a series of programs that will aim to boost the amount of consumer tools that can deliver home energy information to consumers, but also make sure that data remains private and secure. The Obama administration emphasized the use of open software, and new tools created by developers, to help create innovation for the smart grid.

Tendril has long touted its software as having an open API, and Siemens said in its announcement that it’s interested in Tendril’s service because it is a “cloud-based platform,” that can create “a new generation of products, applications and devices.”

Tendril was one of the first startups to emerge in the home energy management space, and over recent months has shifted gears slightly, cancelling a high-end home energy device, and buying startup Grounded Power, a company with deep behavioral analytics. But some of Tendril’s utility deals are starting to come to fruition and recently, Tendril announced plans for full-scale commercial deployments of its home energy services in millions of homes by the second half of this year.

Tendril has raised at least $73 million from investors including VantagePoint Venture Partners, Good Energies, and RRE Ventures.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Ups and downs for cleantech in Q1
• Big data meets the smart grid
• Demand Response Gets a Boost from Proposed FERC Rulings

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The opportunities for the Internet and clean power
• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• Cleantech and investment in 2013

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Green IT’s Q4 Winners: Wind Power, Solar Power, Smart Energy
• Green IT Overview, Q2 2010
• After Solyndra: analyzing the solar industry

The deal with DOD’s Defense Logistics Agency Energy (DLA Energy) calls for Viridity to find ways to pay for something many military bases are already doing: becoming energy-independent. Right now, DLA Energy has about 50 sites feeding back a combined 160 MW of demand response — turning down power loads at factories, offices and homes to help the grid in peak demand times — and has earned about $2.4 million in credits as a result. With Tuesday’s announcement, Viridity will be one of several companies now qualified to add more bases and their megawatts to that equation.

Viridity, which raised $14 million from Intel Capital and Braemar Energy in January, said it would start its first military base demand response project in June. It didn’t disclose dollar values for the deal or how much demand response capacity it was targeting. Of course, the military describes the benefits in terms of “savings,” since taxpayers end up paying the bill. The federal government is the biggest energy consumer in the country, and it is under multiple mandates to make its buildings more energy efficient and grid-connected.

That’s where Viridity comes in. The startup, led by Audrey Zibelman, former chief operating officer of big mid-Atlantic grid operator PJM, has about a dozen projects underway, including several university campus microgrids, a train braking power-to-battery storage system project with SEPTA in Philadelphia, a wind power storage management project with Thomas Jefferson University in Pennsylvania, and an integration role with the multi-billion Tres Amigas transmission hub in New Mexico.

Viridity’s software helps connect building energy meters and controls, HVAC and lighting systems, distributed power sources like rooftop solar panels and backup generators, and other on-site sources into a single platform, represented in energy and dollar terms. But the software also connects with grid operators, energy markets and demand response interfaces to seek the highest prices for those deferred power purchases as power prices rise and fall throughout the day.

Being able to interact with energy markets is going to be critical as most of the country moves demand response from its current mish-mash of programs to a market-based system, as the Federal Energy Regulatory Commission (FERC) ordered last month. Demand response has traditionally been done separately from energy markets, but in the next two years, the two are going to become increasingly intertwined.

Most demand response will probably come from the private sector. Still, military bases represent an interesting test case for the industry, since they’re building some of the most advanced “microgrid” systems out there, with all kinds of power backup to keep them running during blackouts. Most private microgrids, on the other hand, are old-fashioned industrial power backup systems that lack full integration with the smart grid. While the microgrid industry was worth about $4 billion last year, according to Pike Research SBI Energy, few are equipped to integrate with new smart grid and demand response platforms.

Most military microgrids are built to be islands of power stability, rather than integrated parts of the larger power grid. The U.S. Marine Corps’ Twentynine Palms base in California, which is being outfitted to run independently of the power grid by General Electric, is one example. Eaton is also working on a grant-funded military microgrid research project. Last month, the Department of Defense said it would work with the Energy Department’s ARPA-E program to figure out how to generate and store power at more than 500 military installations around the world.

Then there’s a movable microgrid, which is about as “micro” as you can get. Last week, on-site power generation and management company PowerSecure announced the commissioning of its “Smart Charging Micro-Grid” for the U.S. Army, which is a platform meant to control generators, solar panels, plug-in vehicles and all that power-sucking equipment the modern Army uses in remote field encampments.

Image courtesy of wrenoud via Creative Commons license.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Big data meets the smart grid
• Green IT Q4: solar, subsidies and the outlook for EVs
• Cleantech, meet connectivity: a new era of energy efficiency

This year, we decided to highlight companies across the board, from a couple of early stage firms, to a few companies that have gained considerable traction in the market place and millions of dollars in funding. The main component of our selection was ideas that spark the imagination (think big), have the potential to be a game-changer, and use IT in a novel way to lead to energy efficiency, the proliferation of clean power or greener transportation.

The 10 Big Ideas winners will present their innovations before the audience at Green:Net 2011, on April 21 in San Francisco. Hundreds of companies entered the Green:Net Big Ideas competition, and these 10 winners were selected by a team of GigaOM editors and industry judges.

The 10 winners of Green:Net Big Ideas are:

• SeaMicro offers a redesigned server optimized for today’s data center workloads, resulting in a system that uses one-quarter the power and space of traditional servers.
• Power Tagging is a smart grid company that digitally “tags” the power grid to produce energy enabling applications, helping utilities and consumers save money.
• Viridity Energy provides innovative distributed demand management software systems and services, which transforms large energy consumers into 24/7 virtual power plants.
• Virtual Vehicle Company enables greener transportation by combining cell phones, cloud computing, and smart algorithms to deliver rich data about when, where, how, and why people move.
• Transphorm provides cost-competitive and easy-to-embed power conversion modules that reduce energy loss by up to 90 percent and redefine electric power conversion.
• Fenix International produces ultra-affordable power generation and smart energy storage solutions that empower more than 1.5 billion people living off-grid.
• BuildingIQ delivers predictive energy optimization software to reduce energy consumption, automate demand response events, and simplify operations for commercial buildings.
• Calxeda has developed ARM-based server-on-a-chip technology that dramatically lowers the cost and power usage of Internet-scale server solutions.
• Earth Networks. Beyond owning the WeatherBug brand, Earth Networks is building the world’s first privately funded global greenhouse gas observation and sensor network.
• Phononic Devices produces high-efficiency thermoelectric devices that use electricity to remove heat for cooling and refrigeration, and conversely, harvest waste heat for power generation.

I’m really looking forward to Green:Net this year! Other speakers beyond the Big Ideas group include: NRG Energy CEO David Crane, Google’s Green Energy Czar Bill Weihl, DOE Loan Chief Jonathan Silver, Autodesk  CEO Carl Bass, cleantech investing pioneer Sunil Paul, SilverLake Kraftwerk Partners Adam Grosser & Cathy Zoi, Microsoft’s Environmental Strategist Rob Bernard, OPower CEO Daniel Yates, Control4 CEO Will West, Silver Spring Networks founder and CMO Eric Dresselhuys and many more. To see the complete schedule, see here.

Don’t wait to buy tickets; they’re selling fast. Previous years were sold out. Companies interested in sponsorship opportunities contact Mike Sly, at Sly AT gigaom.com. See you there!

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.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Finding the Right Price for Demand Response in Energy Markets
• Demand Response Gets a Boost from Proposed FERC Rulings
• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times

Update: Viridity later disclosed the funding size as $14 million.

For a 3-year-old newcomer, Viridity has seemed to score more than its fair share of projects and partnerships. It will be building both the network and the commercial operations for the audacious transmission hub plan via company Tres Amigas. Viridity is also involved in two stimulus-funded projects: one with Consolidated Edison in New York City, and another with PECO at the Philadelphia campus of Drexel University.

Siemens is also working with Viridity, to combine Siemens’ decentralized energy management system with Viridity’s system for managing “virtual power plants,” a collection of loads and distributed generation resources at office parks, university campuses or other discrete entities. Because Siemens is so large and has so many broad smart grid offerings, it needs to partner with some of the smaller firms to deliver the most advanced technology across the network.

As Viridity Energy CEO Audrey Zibelman told us last year, the company can also help deliver effective microgrids, based on the premise that the customer owns the resource and maximizes its value by selling self-generated power — or “negawatts” of reduced power demand — into more and more markets that have traditionally been the domain of utilities and their big power plant partners.

Viridity says it will use the new funds from Intel and Braemer “to support rapid growth.” Braemar has backed both demand response player EnerNOC and lithium-ion battery company A123 Systems — both of which have gone public. Braemer and Intel Capital also previously invested together into smart grid software company Grid Net.

For more research related to smart grid check out GigaOM Pro (subscription required):

• Z-Wave: Gaining Ground on ZigBee for Home Energy Networking?
• Is the Opt-Out Model the Future of Home Energy Management
• The Developer’s Guide to Home Energy Management Apps

Image courtesy of Doug Beckers.