Ontario energy consumers take note – Voltus secures its place as a leading provider of demand response in this month’s capacity auction

Posted on by Kelly Yazdani

Ontario’s demand response market has grown for the sixth consecutive year and Voltus is continuing to grow with it. The IESO procured almost 1 GW of capacity at one tenth the per MW-Year cost of the generator contracts that make up the Global Adjustment. Capacity auctions provide a more flexible and cost effective option than generator contracts, and the IESO will increase its reliance on auctions as contracts expire over the next 20 years. 

Voltus is now the 3rd largest Demand Response Aggregator in Ontario. “We are excited to provide our 82 MWs of customers with over $25,000 per MW each year responding to critical grid events in the province,” says Voltus Vice President of Energy Markets and Product Dana Guernsey. This demand response program will run from May through October next year, but is likely to return to running year-round in 2023, as the need for capacity increases. “The time is ripe for Ontario businesses to offer their operational flexibility to the grid as we expect the value of demand response in Ontario to only increase over time,” says Guernsey.

Source: Average of Recovery Scenarios provided in the July 22, 2020 IESO Planning Update

For Ontario businesses considering taking the plunge into demand response participation, this program is straightforward operationally and quite lucrative; the Summer season has historically only seen 1-2 events per year, equating to $3,000 to $6,000 per MWh in earnings potential. 

Participation in programs like this helps reduce the Province’s dependence on fossil fuels and keeps electricity rates lower as new power plants and transmission line investments can be deferred. Program enrollment is limited though. The value goes to the first businesses to jump on board.

Interested in earning cash for your business through demand response? Email info@voltus.co to get started.

—

Michael Pohlod, IESO Energy Markets Manager, mpohlod@voltus.co

 

The 4 Horsemen Of Distributed Energy Resources

Posted on by Kelly Yazdani

Voltus CEO, Gregg Dixon, and Suncast’s Nico Johnson are back to talk about the 4 Horsemen of Distributed Energy Resources

  • Energy Efficiency
  • Demand Response
  • Distributed Generation
  • Energy Storage

The interview is also available on Suncast’s website: https://mysuncast.com/suncast-episodes/325. You can subscribe to Suncast via iTunes.

Interested in becoming a Voltan? View all open positions at https://www.voltus.co/join-us/

Culture-Centric Tech Startup Raises $25m For Demand Response, Gregg Dixon Of Voltus Inc.

Posted on by Kelly Yazdani

Voltus CEO, Gregg Dixon, joined Nico Johnson to talk leadership, building a business, the challenges of growth, the importance of culture, and the future of distributed energy resources.

The interview is also available on Suncast’s website: http://www.mysuncast.com/suncast-episodes/316. You can subscribe to Suncast via iTunes.

Interested in becoming a Voltan? View all open positions at https://www.voltus.co/join-us/

Veterans Day – building purpose through a shared mission

Posted on by Kelly Yazdani

Today is a day to honor American veterans of all wars. It is a day most people acknowledge and respect, but maybe – mostly just appreciate the day off. Voltus is actually the first company since I left active duty who recognizes Veterans Day! So, I too appreciate the day off. With that, I want to share what being a Veteran means to me.

Indoc had begun. What I thought Indoc – Indoctrination – would resemble was something close to summer camp and getting to know each other and learn (very kumbaya). I was wrong – very wrong – and in for a rude awakening. Indoc is abbreviated boot camp. With my first step onto the bus to take me to base, Gunny started yelling at me. I apologized: “Sorry Sir,” which sent him apoplectic. Turns out you don’t call gunnery sergeants “Sir.”

My family ties to the military ended with grandfathers I barely knew. I did not grow up learning about the ranks, the branches of the military and their history. I just knew I wanted to be part of the greatest American tradition – be part of something great. I was named after my father’s fraternity brother (Stephen) who died in the Vietnam War. I grew up listening to my father opine about the greatness of the military. He had enlisted in the Navy during the Vietnam War – got rejected due to a heart condition – and then was drafted, and subsequently disqualified when they found out about his medical status. It was his greatest regret not having the opportunity to serve, and I would not have that same regret.

Before my friendly greeting by Gunny on the bus, my father said goodbye and reminded me, that this was “a great time to be in the military – it is a time of peace. You will learn and be given amazing opportunities you cannot find anywhere else.” Three weeks later was September 11, 2001. It was time to prepare for battle. The tradition expanded. The mission even more critical. 

Four years later I landed on The Big Stick (USS Theodore Roosevelt – an aircraft carrier) in the Persian Gulf. It was time to finally be part of the mission. During college my Naval ROTC classmates and I shared a lot of similarities, but now that I was joining Air Wing EIGHT in an active war zone, my new teammates ran the gamut. A variety of backgrounds, experiences, ages, ethnicities, but we were all there for a single purpose: the mission. We had almost nothing in common except our drive to serve. This is where I learned the true definition of camaraderie. 

The people I served with – most I haven’t seen in 10+ years – shared a unique experience, bond and mission with me. It is the people who are next to you during the endless hours, who ensure together you achieve success – no matter the stress, no matter the sacrifice. No amount of time nor separation could erode the experience. This summer, one called me and it was as if no time had passed. We still have nothing in common, but I could talk to him for hours. I hung up the phone feeling elevated – feeling grateful for the comrades I had made. Grateful for the experience I had had.

There is no doubt in my mind that the two organizations I will have “served” in my career with the greatest and most impactful camaraderie will be The United States Navy and Voltus, Inc. I can say that knowing I have many more decades ahead of me.

The parallels between the two organizations are uncanny.

  1. We are mission driven. 
  2. We use our diversity of experience, backgrounds and personalities to solve problems and build something with a purpose – something we all believe in – no matter how tough.

But the greatest parallel is the camaraderie. We share a unique experience, bond and mission. No amount of separation can erode the experience we have had (and will continue to have).

2020 has been a year. Highs and lows – a lot of lows. A lot of challenges. But some great highs as well. We have been through this time together, but our team is something special. And thanks to the leadership of Gregg and Matt we have the opportunity to expand our team and mission. We might be prohibited from time together right now, but because of the bright, gritty, good people on this team, we still have a rare camaraderie that most never get to experience. This is the group of people we get to do good with. The team we get to charge into 2021 with – armed and ready for what is next.

2021 is upon us. The tradition of (and need for) demand response expanded. The mission even more critical.

I will forever be proud and grateful to have served in the Navy and forever proud and grateful to be a Voltan.

Happy Veterans Day!

Stephanie Hendricks, VP of Operations & Customer Success

Interested in becoming a Voltan and joining our mission? View all available positions at www.voltus.co/join-us.

When Economic Curtailment … Isn’t

Posted on by Kelly Yazdani

Flexible load, responding to real-time price signals: an energy economist’s dream come true. Customers avoid paying electricity prices that drive the costs of production higher than the value of the widgets being made, simultaneously reducing demand on the system and associated costs.

In practice, however, economic curtailment can be 

  • Tricky to get right &
  • Operationally challenging. 

For certain businesses that can provide fast-response load curtailment, Operating Reserves (OR) is a better alternative, resulting in lower net electricity costs without the frequent hassles of economic curtailment.   

Tricky to get right

Accurately predicting price spikes, especially with enough notice to drive curtailment decisions, is not straightforward. System operators tend to either under- or over-forecast electricity prices the majority of the time. Forecasts are often biased high, and often by a significant margin when actual prices turn out to be low.1, 2 

In addition, earlier price forecasts leading up to a given hour can vary wildly based on shifting expectations of system conditions (imports/exports, renewable generation output, etc.). From one hour to the next, a price spike that very afternoon could go from looking implausible to imminent. Sophisticated modeling services can help improve accuracy, but the reality remains that predicting price spikes is just tricky to get right.    

Operationally challenging

Curtailing load to avoid high prices can impose operational challenges. Periods of sustained high prices may merit prolonged shutdowns. Very brief load reductions would be required to avoid isolated price spikes, and are likely not worth the shutdown/startup costs and operational hassle.   

A better alternative

In fast-response OR programs, loads help balance real-time supply and demand on the grid by curtailing when called upon by the system operator. Businesses get paid to be available to reduce their load, and they are called upon at most a few times per month. Operating Reserves participation is open to customers regardless of retail rate structure, not just to those who are exposed to real-time rates. 

While a business on real-time rates does end up using “expensive electricity” to produce its widgets, payments for being available for OR are linked to the real-time price (i.e. you get paid more to be available when prices are high). On net, electricity costs minus OR revenues generally turn out to be less for a customer participating in OR than for the same customer tracking prices and curtailing economically (even assuming they do hit the majority of high-priced hours accurately). To achieve the same net electricity costs through economic curtailment, a customer would need to curtail for hundreds of hours per year!3

Take home

If you want to minimize electricity costs and your business can provide fast-response load curtailment, Operating Reserves is in short a better alternative. The end result? Lower overall costs for much less curtailment. 

Notes

1All figures are illustrative, based on a case study for Alberta, Canada.

2Peak shaving to avoid system capacity charges is a separate electricity cost management strategy. This article focuses purely on energy ($/MWh) related charges.

3Assumes 60% customer accuracy for avoiding price spikes.

Nicole Irwin-Viet

Energy Markets Manager

nirwin@voltus.co

Interested in learning more about how your business can earn cash in Operating Reserves programs? Chat with our team below or email info@voltus.co to get started.

Accelerating our Mission – doing more good, faster

Posted on by Kelly Yazdani

August’s energy crisis in California was a wake up call. Not the kind of wake up call that comes when you’re in a dead sleep, but the kind that comes when you are diligently and tirelessly working toward a goal and receive a push, creating a renewed sense of urgency.

We founded Voltus with a clear vision – to become the world’s leading provider of demand response. We bring this vision to fruition each day by turning large energy users’ behind-the-meter assets into cash-producing distributed energy resources. Voltus makes money when our customers make money. This process, to steal Arnold Palmer’s quote about golf, is deceptively simple, and endlessly complex. No two customers are exactly the same. Our business requires the perfect blend of repeatable processes and customization.

Voltus is the fastest growing demand response provider of all time, serving thousands of customers across nine major North American energy markets. Our team has accomplished this by being bright (e.g., creating game-changing technology for customers who have practiced demand response for decades), by being gritty (e.g. opening markets that wanted to stay closed), and by being good (e.g., we really, really like winning as a team). Last month, the FERC passed Order 2222, enabling distributed energy resource aggregators like Voltus to participate in all wholesale markets. This Order doubles our serviceable addressable market in the months and years to come. It will be the catalyst for continued record-breaking growth.

But, back to the California energy crisis. As the demand for electricity this past August pushed supply limits, initiating rolling blackouts for regions throughout California, the most vulnerable in our community were at risk. One of the reasons Voltus exists is to help prevent blackouts, and this was our moment to do exactly that. Our team and customers stepped up, working around the clock to provide every negawatt possible to the grid. The work we did literally saved lives. 

When the ash settled, we realized that we needed to accelerate our mission, to do more good, faster. More demand response is needed. Not just in California, where raging wildfires, climate change, and the widespread implementation of renewables place new stressors on the grid, but in New York City, Pennsylvania, Ontario, Texas, and, quite frankly, anywhere electricity is made and consumed. 

Our technology platform unlocks the clean energy transition, prevents future blackouts, and helps our customers turn energy management into a competitive advantage. The world agrees. Within 60 days of announcing our interest in raising additional capital to accelerate our mission, we closed $25M in Series B financing. 

Now we are eager to expand our team of Voltans. We have always hired according to the following standard: we must end the interview thinking, “Yes! (S)he is the exact person we need.” We’re looking for that feeling 64 times between now and Valentine’s Day. If you want to create the distributed energy platform that ushers in the clean energy transition, if you love to deliver cash to customers, or if you want to put your heart and soul into being a great teammate, please apply here. It takes an amazing team to make a change this ambitious.

Matt Plante, President

——

Commercial, industrial, or institutional customer? Email info@voltus.co to get started. Eager to join our team of bright, gritty, and good Voltans. View open positions here.

Voltus Raises $25M To Grow Leadership Position In Distributed Energy Resources In Financing Round Led By NGP Energy Technology Partners III

Posted on by Kelly Yazdani

SAN FRANCISCO, October 29, 2020 – Voltus, Inc., the leading distributed energy resources (DER) platform, today announced it has raised $25 million in a Series B financing. The round was led by NGP Energy Technology Partners III (“NGP ETP III”) and included existing investors Prelude Ventures and Ajax Strategies.

The funding will be used to create more jobs, develop additional products, and enter new markets, allowing Voltus to increase its leadership position delivering cash to commercial and industrial customers via innovative DER solutions.

Since its founding in 2016, Voltus has increased the market potential for DERs, entering every North American market and becoming the first aggregator of retail customers in the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP), in addition to being the first to offer capacity, ancillary services, and energy DER products in these same markets. In total, Voltus has secured over 2,000 megawatts of DERs, making it the fastest-growing provider of such services in industry history.

The Series B financing comes on the heels of FERC Order 2222, which ensures the equal treatment of DERs in wholesale markets in the United States, doubling Voltus’s market opportunity.

“A 15-year plus leader in energy technology investing, NGP ETP III is focused on committing capital to compelling companies focused on energy transition and is very pleased to be partnering with Voltus and to lead the Series B financing. Voltus has a leading DER technology platform, an extensive customer network in key target markets, a world-class team, and a proven track record,” said NGP ETP III CEO Philip Deutch.

Reflecting on the future impact of the Voltus mission, Voltus CEO Gregg Dixon said: “I’m deeply proud of our team’s accomplishments, but the success Voltus has experienced is just the tip of the iceberg. Our technology platform unlocks the potential of DERs for everyone, the benefits of which amount to $200 billion per year globally and a much more resilient and sustainable grid. DERs are the skeleton key to the energy transition, delivering the backstop and balancing resource for intermittent renewables.”

Tim Woodward, Managing Director of Prelude Ventures and Voltus Board Member, describes the impact of this raise: “The Voltus platform connects every type of DER, from energy storage to demand response to distributed generation, in every market . . . today. This round of financing will dramatically accelerate Voltus’s mission.” Veery Maxwell, Partner at Ajax Strategies and fellow Board Member also expresses her support, “This additional capital will take Voltus’s record-breaking growth to the next level. I look forward to working hand in hand with the Voltus team to level the regulatory playing field and achieve their ambitious goals.”

About Voltus, Inc.

Voltus represents the “potential of us” to better manage energy through simple, cost and risk-free distributed energy resources programs. Our commercial and industrial customers generate cash by allowing us to maximize the value of their operational flexibility in energy markets. Voltus makes money when our customers make money by sharing the cash generated from working together. What’s more, there are significant community benefits that accompany working with Voltus – a cleaner, more reliable energy future and dollars invested back into your business instead of being wasted on a larger energy bill. To learn more, visit www.voltus.co.

About NGP Energy Technology Partners III

One of the most experienced energy technology investors in the United States, NGP Energy Technology Partners III (“NGP ETP III”) invests in innovative technology companies seeking to transform global energy markets. NGP ETP III targets growth capital investments in companies with products, services or technologies serving the renewable energy, power, energy storage, energy efficiency, environmental, and transportation sectors. For additional information, please visit www.ngpetp3.com.

NGP ETP III is affiliated with NGP Energy Capital Management (“NGP”). Founded in 1988, NGP is a premier investment franchise in the energy industry, with over $20 billion in cumulative equity commitments organized to make strategic investments in the energy and natural resources sectors. NGP’s 32-year history gives it unique insight into the drivers of value creation in all facets of the energy industry. For more information visit www.ngpenergycapital.com.

Voltus Media Relations

Kelly Yazdani
Director of Marketing
703-340-9353
kyazdani@voltus.co

New FERC Order expands the reach of demand response

Posted on by Kelly Yazdani

This past Thursday, the Federal Energy Regulatory Commission (FERC) ruled to unify the treatment of distributed energy resources. Up to this point, states could opt-out, banning the participation of distributed resources in the wholesale power markets serving their local customers. What this meant practically for large commercial, industrial, and institutional organizations was that sites in certain states could not capitalize on their operational flexibility. According to Gregg Dixon, Voltus CEO, this historic FERC ruling “eliminates the antiquated local barriers that have prevented these distributed energy resources from delivering and receiving value in every wholesale power market in the United States.” Put simply, states can no longer opt-out.

Jon Wellinghoff, the former FERC Chairman commonly referred to as the “godfather” of demand response, also puts this ruling into perspective. “This ruling is the single most important decision in FERC history. By cementing the place of distributed energy resources in wholesale markets, we have taken a leap toward ensuring reliable grids and a clean energy future.” Wellinghoff, who refers to demand response as the “skeleton key” of the clean energy transition, speaks openly about the need for this balancing resource to allow for the widespread adoption of renewable energy.

Yet our work is not done. It will be 90 days before this ruling is written into law, and wholesale market operators then have up to nine months to submit compliance filings on how to modify the tariffs to enable these resources. Voltus is working closely with the appropriate grid operators to expedite implementation, expanding the financial opportunities for multi-site customers, as well as single-site organizations within these localities. Despite these short-term limitations, Dixon writes that the long term vision for Voltus is clear: “Our team and platform are ready to accelerate the energy transition, unlocking the value of distributed energy resources in every state.”

Interested in cashing in on your operational flexibility? Reach out to our team at info@voltus.co to learn more about the opportunities available to your organization.

Week #6 – Working with multiple CSPs to maximize DR dollars

Posted on by Kelly Yazdani

Potential Customer: Can my company work with more than one curtailment service provider (CSP) to stack multiple demand response (DR) programs and maximize earnings?

Voltus: Yes. Well … maybe. 

Nearly 140 demand response programs exist across North America. Many of these programs are offered exclusively by Voltus while others aren’t offered by Voltus at all. What’s that now?

That’s right, in some cases a DR program is offered only by a utility or even a competing CSP. No matter, Voltus lays out all the options for monetizing your operational flexibility and supports your participation in every program with our technology and services. 

Conversely, we often talk to customers who are currently under contract with a different CSP and are interested in contracting with Voltus to cash in on additional programs. Is that allowed?

From Voltus’s perspective, of course. The caveat here is that you need to make sure you are not prevented from doing so under your current CSP’s contract. We always advise customers to make sure that any new program they sign up for at a facility doesn’t preclude them from participating in other programs with other providers. We’ve run into many unfortunate situations where a customer signed up with a CSP and gave them exclusivity over not only a single facility’s ability to participate in DR, but exclusivity over DR for all of their facilities … unbeknownst to them.

So, let’s look at a real world example. Voltus works with a large commercial real estate company with properties throughout the United States. This customer is very sophisticated and wanted to take full advantage of every stackable DR program in the PJM service territory, specifically Pennsylvania. In Pennsylvania, a customer can take advantage of seven separate demand response programs simultaneously. Unfortunately, the company’s CSP at the time had exclusive rights to all DR programs at each of the company’s facilities under a contract that had been signed three years prior for a five year term. The larger problem was that the CSP only offered two of the seven programs and wouldn’t cooperate in allowing the customer to participate in the other five programs. In fact, the CSP claimed that by tapping into other programs the company was putting their current DR earnings at risk (fake news).

In this particular case, the CSP had enrolled the customer in PJM’s ELRP program and signed them up for economic DR to capture energy payments. As it turns out, the more lucrative option for the customer was a combination of Pennsylvania Act 129 DR, Voltus’s Peak Saver program, and PJM’s synchronized reserves program. We showed the customer that they would more than double their demand response dollars by enrolling in these additional programs. We also helped the customer negotiate away from exclusivity with their original CSP. Amazingly, participation in these additional programs actually increased the company’s earnings in the two original programs – a win-win-win for all parties involved!

Of course, every region is different and every CSP is different so it’s important to dig into the details.

  1. Make sure you’re not limited by current terms and conditions in your DR agreements.
  2. Make sure you’re taking advantage of every stackable DR program.

In the end, the best strategy for you business may be to use two (or more) CSPs. We’re indifferent as long as you’re maximizing your demand response dollars.

Interested in doubling your company’s DR dollars? Email us at info@voltus.co or chat with us below.

Week #5 – Uncovering the Gross Up

Posted on by Kelly Yazdani

At Voltus, we talk to hundreds of energy decision makers every day from dozens of industries in every major energy market. Sometimes these organizations are learning about the benefits of demand response for the first time. At other times, we’re connecting with businesses long-steeped in demand response program participation. Our message, regardless of experience, is that it is possible for customers to double their demand response dollars, and one of the easiest ways to contribute to this goal is giving demand response customers their fair share of the “gross-up.”

What the heck is the gross-up!?! 

So glad you asked.

The gross-up is industry-speak for the transmission loss factor and operating reserve margin that is applied to electricity demand in wholesale power markets. These concepts impact the value of demand response resources in these same markets.

The bottom line: if you’re not being paid your portion of the gross-up you could be losing 5% to 40% of your demand response dollars depending on year and market.

Let’s look at an example to understand the concept clearly.

You have 1,000 kW of demand response capability at your facility. You contract with a demand response provider to get 65% of the revenue earned from enrolling your load curtailment in the ISO-NE market. At $7.03/kW-month you would expect the gross revenue from the 1,000 kW to be worth $84,360 for power year 2019, which at 65% nets your business $54,834. Pretty good, huh? Yet, your demand response capability is actually more valuable than 1,000 kWs and here’s why.

When power is generated by a natural gas power plant, 7% of that power is lost on average over transmission lines (a 100 MW generator only delivers about 93 MWs of usable electricity to the point of consumption). Additionally, that natural gas power plant isn’t 100% reliable throughout the year, which requires the grid operator to buy, on behalf of the market, what’s called “operating reserve.” Operating reserve averages about 15% of generation capacity (that 100 MW generator requires the grid operator to purchase 115 total MWs of generation). These transmission line losses and operating reserves add up, amounting to an additional 22% in this example. 

Demand response capacity behaves differently though since it’s created at the point of consumption. This capacity doesn’t experience transmission line losses and doesn’t require operating reserves. As a result, the grid operator in our example would “gross up” the value of your 1,000 kW demand response capacity by that same 22%. The demand response provider is actually credited with 1,220 kW (1,000 kW plus the 220 kW gross up). In many cases, demand response providers only pay the customer 65% of the “nameplate capacity” (the original 1,000 kW). The additional $18,559 of value that comes from the 220 kW gross-up goes entirely to the demand response provider. 

You can do the math to determine the true revenue share, but in this example it amounts to 53% to the customer, not the expected 65%.

Gross-up values can vary significantly by wholesale market, the particular power year, and the customer’s transmission level service. Regardless of the exact value, the gross up is money that shouldn’t be left on the table. If you’ve been doing demand response for a long time and you’re looking to maximize cash from your operational flexibility, ask your demand response provider for your share of the gross up.

At Voltus, we value transparency above all else. Interested in working with us or learning more about the many ways you can double your demand response dollars? Email us at info@voltus.co or chat with us below.