Ice Energy Making Smart Grid Play

Ice Energy, which makes systems that make ice with cheap power at night and use it to chill air conditioners in the day to save on expensive peak power demands, is making a big play at the utility-scale market — and it has a smart grid tie-in to make the deal sweeter.

The Windsor, Colo.-based startup says its Ice Bear devices are cheaper and cleaner than natural gas-fired “peaker” plants that utilities now largely rely on to generate power at peak load times — and the air conditioners the devices will help power down can make up nearly half of that peak load demand during hot summer afternoons.

In October, Ice Energy closed $33 million in funding led by Energy Capital Partners, which has committed to spending up to $150 million more to finance utility purchasing of the systems (see Ice Energy Picks Up Cool $33M for Hybrid AC).

With smart grid technologies now front and center in utilities’ business plans, the company has now incorporated a “Cool Data Controller” for its systems, that can let utilities dispatch the devices on demand or pre-set them to run during expected peak times, said Therese Wells, marketing director.

“That is what allows the utilities to control how the resource is used,” Wells said from the floor of the DistribuTech conference in San Diego on Wednesday. “This makes a great alternative to peaker plants, and it’s ready to deploy today, at scale.”

Utilities could buy the systems — tapping New Energy Partners’ $150 million — or investors could buy them and contract the power they save to utilities through power purchase agreements, said Greg Miller, a market development director for Ice Energy.

It’s a bit like the demand-response offerings from companies like Comverge and EnerNOC — power not used at peak time is power that utilities don’t have to build new generation and transmission to create and provide.

It can also be seen as a way to store power, which is going to be important to incorporate wind power — wind blows the strongest at night — into the transmission grid (see Gridpoint to Manage Wind Power Battery Storage, Batteries for the Grid, Q&A: MegaWatt Storage Targets Utilities and Startup ES&P to Store Electricity in the Air).

Honeywell (NYSE:HON) is installing Ice Bears on about 300 rooftops as part of a $4.25-million program with utility Southern California Edison, and Ice Energy in in talks with about 20 utilities interested in the systems, Wells said.

Ice Energy has sold its systems to Napa Valley Community College and the city of Victorville, Calif., and hopes to land more large-scale deals like that soon, Miller said.

The company got $25 million from Goldman Sachs, Good Energies and Second Avenue Partners and Sail Venture Partners in 2007 and also raised a $10 million seed round, according to Earth2Tech.