Networked energy storage will fundamentally disrupt the energy sector, Ryan Wartena, founder and CEO of Growing Energy Labs Inc (or GELI), tells me in his startup’s small lab and office space in the South of Market area of San Francisco. Wartena, a chemical engineer who previously set up a battery lab within the U.S. Naval Research Lab and led the team at MIT that created the world’s first self-assembled battery, is a self-professed gear-head who’s eyes light up as he talks about the elegant design of cylindrical batteries or when he shows me the company’s research building self-contained grid battery boxes that the company calls “energy computers.”
GELI is a recent grad of the new green digital-focused accelerator Greenstart, and as part of that incubation process, the two-year-old GELI has emerged with a new focus on software, and has developed an operating system and set of software to connect batteries for use on the power grid. Part of GELI’s software will be open source, and you can think of the idea as creating the Android for power grid batteries.
The future of energy storage
O.K., let’s step back a minute and look at a snap shot of the current power grid. Right now the grid has very little energy storage and power plants are basically producing the exact amount of energy that buildings and systems are consuming in real time. That makes the grid inefficient and also costly, and in addition the lack of energy storage is a barrier when it comes to adding less reliable clean power sources like wind and solar (the sun only shines and the wind only blows at certain times).
New forms of energy storage are starting to be added to the power grid to combat this problem, and batteries are one of the types of energy storage that utilities — as well as building owners and home owners — are looking at. Batteries are attractive to utilities because the charge and discharge of a battery can be tightly controlled, so grid operators can use the battery systems for various grid applications. For example, groups of batteries can store and discharge energy when a utility sees that the demand for energy is becoming out of balance with supply (called “frequency regulation in grid geek speak).
GELI enters this picture because a universal operating system and algorithms will be what utilities can use to smartly control the batteries and deliver these services. This software layer could also enable new types of applications — ones that haven’t even been invented yet — because a GELI customer could dream up their own application and write their own program. Picture something as out-there as peer-to-peer energy sharing if every home had a big battery and solar panels and the software to control the exchange, says Wartena.
GELI isn’t the only company building the software to connect batteries and other forms of energy storage or devices. A company called Grid Mobility has built software and connected hardware to enable utilities to use hot water heaters (and other energy-consuming appliances) as on-demand grid storage in conjunction with local clean power when it’s available. Tendril is also looking to develop a sort of Android for energy layer for home energy consumption, electric cars and the smart grid. (For more on this idea, check out our research note from GigaOM Pro (subscription required): “The big data tsunami meets the next generation of smart grid companies.”)
Are you GELI?
GELI plans to launch its beta software in the coming weeks to some initial customers like Korean battery maker Kokam. GELI is targeting battery manufacturers as its customers, and the battery makers themselves will be the ones that will sell the batteries to the utilities and building owners. Wartena says initial markets that he thinks GELI-enabled batteries will land in include homes and buildings in Japan, commercial and industrial buildings in the U.S., and utility grid services in the U.S.
Through the Greenstart incubator program, GELI raised a small bit of a seed round, but is now working on raising more money to kick off the business and start selling. The Greenstart mentors were also able to convince Wartena to pivot from selling just the hardware (the energy computer battery box) to focus on the software. But tinkering with the energy computers was crucial to the team for developing (and continuing to develop) the software. The EC1 and EC2 (energy computers 1 & 2) are in GELI’s SOMA labs, and Wartena gestures excitedly at EC2 during our interview.
Software seems like a better way to go from a startup perspective, as the margins are higher, and the business model is less capital intensive than hardware. In addition, the huge battery giants in Asia will likely be able to benefit more from the software innovations born out of Silicon Valley than they would from a design to package a battery system in a box (which is what the EC is). In fact, Wartena recently went to a battery show in Japan and realized that there are already dozens of battery box systems from established Japanese companies. Those are our first target customers, Wartena said.
The Energy Internet needs storage
The idea of the EC1 & EC2, though, could one day be more common place than you’d think. Japanese buildings and even homes are beginning to add more and more solar and accompanying battery systems, now that the country is no longer going to rely on nuclear. At the smart grid conference Distributech early this year Panasonic was showing off a battery box that strings together hundreds of small format lithium-ion laptop batteries; a couple of battery stacks would be enough for a single family home, combined with an inverter.
Last month I reported that Tesla and SolarCity have been quietly making deals that could one day lead to dozens of sales of battery projects coupled with rooftop solar systems built at both residential and commercial buildings in California. SolarCity confirmed the energy storage plans with me, and the duo have submitted at least 70 applications for projects to attempt to receive rebates from the California Public Utility Commission’s Self-Generation Incentive Program (SGIP), which provides incentives for distributed energy generation.
In the same way that computers and the Internet have been shaped by storage, a connected energy system will need to rely on storage, too. The energy grid is currently a centralized system, where energy is created and distributed from a centralized location by utilities. But eventually energy could form into a decentralized network with solar rooftops and microgrids, not unlike the architecture of the Internet. GELI wants to provide the OS for that energy Internet.