Think of the smart grid as a merging of two realms of technology: the centrally controlled world of utilities and grid operators, and the distributed, autonomous world of rooftop solar, plug-in EVs, backup batteries and other grid edge devices. Eventually, both sides are going to have to learn to communicate, or at least know what the other is doing.

For the past twenty years, Power Analytics has been quietly working on the bottom-up side of this equation. The 34-employee San Diego, Calif.-based company, formerly known as EDSA, creates ultra-sophisticated software power-flow models that represent contained “microgrid” settings, from U.S. Navy ships to military bases and college campuses. It’s also working with the Department of Energy on solar and energy storage integration research, with an eye toward bringing that technology to real-world applications.

Now, Power Analytics is joining a much newer entrant to the smart grid field, one with some big plans for bridging the world of distributed devices and the grid at large. That’s Raleigh, N.C.-based Causam Energy, which announced Tuesday that it’s acquiring Power Analytics for an undisclosed sum.

Causam was officially incorporated in 2013, and recently raised $2 million of an expected $3 million round of funding. CFO David Bass said in an interview this week that it’s working on software for “interoperable, actionable, two-way, real-time machine-to-machine communications for grid operators out to the elements connected to the grid.”

More specifically, Causam has developed a software platform to manage a lot of devices, being linked by various networks, as grid assets, he said. “If it’s demand response, then that probably means turning things off,” he said. If it’s distributed energy, that probably means turning things on. If it’s access-related, that means recognizing, and registering, and updating a profile of something that’s new -- say, a Nest thermostat being added to the grid, or an electric vehicle being added to the grid.”

Those are two very different types of devices, each with its own way of connecting itself to utilities, customers and the internet at large, he said. But they serve to illustrate the breadth of systems that Causam is hoping to help manage through its underlying software platform, he said. For example, whether it’s a thermostat or a plug-in car, customers will expect to see transactions reported on their mobile devices and cloud services in close to real time, according to Bass -- that's the kind of functionality Causam is targeting for its “advanced energy settlements” software.

So far, Causam’s key reference customer-partner is Power Generation Services Inc. (PGSI), a Florida-based distributed generation and energy management company primarily working in the Southeast. In January, General Electric invested an undisclosed amount in PGSI, with plans to apply its capabilities to GE’s Grid IQ software analytics platform.

Bass said PGSI is licensing Causam’s technology platform, and putting it to use to register, monitor, control and verify payment for on-site backup generators and other distributed energy devices that participate in grid programs. “The financial proposition is different when you’re talking about distributed energy as a source of curtailment,” which is the old way of doing things, “versus distributed energy as a source of supply, a trading block.”

Bass didn’t disclose other customers or partners Causam may be working with on other implementations of its technology. But he did note that Power Analytics' real-time modeling and monitoring of power flows “fit very neatly with the capabilities that Causam has, and additional capabilities that Causam has conceived of and is working to develop.”

It will be interesting to see how Power Analytics’ hardcore power-flow modeling capabilities could be put to use on this front. In an interview this week, Kevin Meagher, Power Analytics’ CTO, mentioned the possibility of taking the IEEE standards that deal with microgrid interconnections, and developing a way to evaluate the shared customer-utility economic value of those assets.

These aren’t brand-new concepts, of course. The broader world of machine-to-machine networks and the “internet of things” is full of corporate giants and myriad startups promising a future where every device is constantly communing with the cloud.

Distributed energy management has its own versions, ranging from “smart home” device management platforms to industrial control networks. We’ve been covering some of the experiments on this front, from Duke Energy’s “Coalition of the Willing” work on interoperable grid devices, to peer-to-peer microgrid controls.

Tags: causam, cisco, distributed energy, duke energy, energy storage, grid edge, internet of things, localgrid, microgrid, power analytics, smart grid, software, solar, utilities