Utilidata Raises $20.5M for Voltage Optimization and Beyond

New investors, customers to expand CVR technology to broader range of applications and markets

What’s the value of a conservation voltage reduction (CVR) system that can collect and analyze its own power data, adapt to changing grid conditions, and deliver insight into disruptive conditions and technologies at the grid edge?

That’s the question that investors in Utilidata are aiming to answer. On Tuesday, the Providence, R.I.-based company announced a $20.5 million Series B round, along with a new customer, new plans for international expansion -- and the potential to move beyond optimizing grid voltages toward a whole new range of capabilities.

Leading the round were Silicon Valley venture firm Foundation 8 Capital and Saudi Aramco Energy Ventures, the investment arm of the Saudi national oil company. Both investors are working on partnerships that could see Utilidata’s AdaptiVolt technology deployed in Asian grid markets, as well as supporting Saudi Aramco’s oil and gas power system, CEO Scott DePasquale said in an interview this week.

DePasquale confirmed that Utilidata has also launched a new project with National Grid, as reported by the Providence Journal newspaper on Saturday. The $500,000 project is testing the company’s capabilities in Rhode Island, with an eye on possible expansion to National Grid operations in other states, Timothy F. Horan, president of National Grid Rhode Island, told the newspaper.

Utilidata also confirmed that long-time customer American Electric Power (AEP) is an investor, joining Braemar Energy Ventures in Tuesday’s round, along with a Series A round in 2012, which brings the company’s total capital raised to $25 million. AEP has piloted Utilidata’s CVR technology since 2009 as part of the utility’s stimulus-funded GridSMART project, and in late 2012 announced a research and development agreement to expand their work together.

In this week’s interview, DePasquale expanded on the nature of that work. In simple terms, the partners are building on Utilidata’s core expertise in monitoring, adjusting and optimizing distribution grid voltages, with the goal of building a set of additional applications for distribution grid management, ranging from monitoring the effects of distributed solar PV on distribution circuits, to putting the data collected by the system to use in grid analytics.

A Different Approach to Fine-Tuning Grid Voltage for Efficiency

“We’re creating new data, because we have a very low-cost way of lighting the feeder up,” he said. In simple terms, Utilidata relies on networking existing voltage regulators and other voltage management devices on distribution circuits, connecting them to industrial-grade computing hubs at substations or distribution operation centers, and actively managing those systems via digital signal processing, which measures and analyzes the electricity flowing along those circuits every couple of seconds.

That’s a different approach than model-based CVR systems that rely on static representations of grid electricity flows to adjust voltages. It’s also different from automated systems that deploy preprogrammed devices that autonomously react to changes on the circuits they’re connected to, he said.

Utilidata’s approach relies on existing grid gear to do its work, as well as using robust dedicated communications networks to actively collect, analyze and react to changes across the devices it’s managing. But once it’s in place, the system should also deliver more flexible control and finer-grained orchestration of the multiple devices it’s managing, with commensurate advantages over alternative architectures.

Utilidata claims this can achieve voltage reductions 25 percent to 50 percent better than competing schemes, which can more than double the net present value of systems that strive to reduce over-voltages by between 2 percent to 5 percent across entire distribution circuits to save energy or reduce peak loads. It can also deliver a 30 percent reduction in the operation of load tap changers (electromechanical devices that automatically react to line voltage changes and which can wear out much more quickly under these new stresses) compared to other CVR schemes.

In fact, customers including the Bonneville Power Administration (BPA) and Baltimore Gas & Electric have deployed Utilidata’s technology, not to perform CVR, but solely to monitor the performance of other vendors’ CVR systems, DePasquale noted. Since 2003, Utilidata has also deployed CVR for Hydro Ottawa and Veridian in Canada, for AEP companies AEP Ohio and Indiana-Michigan Power Co. and the rural Flathead Electric Coop in the United States, and Pacific Northwest non-utility clients like lumber mills and universities, with a total of 160 distribution feeders across North America.

Building on Grid Insight for Applications Beyond CVR

All of this leads to Utilidata’s new plans, said DePasquale, a former GE Capital SVP and current partner at Braemar. Prior to joining Utilidata in February 2012, DePasquale spent eight months working with AEP, where he was introduced to Utilidata’s work with the utility, as well as the potential for expanding its data collection and DSP analysis to a whole new set of grid needs.

For example, Utilidata discovered that on distribution circuits where it was deployed, “we could tell AEP when solar was hitting their grid way before they knew it,” he said. Distributed, customer-owned solar is a significant challenge for utilities, and technologies that can measure its real-time impacts and adjust the grid accordingly could play a significant role in helping to manage that challenge.

The same approach could help utilities measure and predict the impact of a whole range of distributed resources -- plug-in vehicle charging, demand response, energy storage, and the like -- on distribution grid asset maintenance and planning decisions, he said. AEP is a noted leader in IT-based asset management with its Asset Health Center project, and many other utilities are striving to collect and interpret data from legacy systems and new smart grid systems alike to optimize their operations and planning processes.

Utilidata’s fine-grained grid power data could also be applied to a wide range of data analytics purposes, he added. While he declined to go into details, he did say that the company expected to be making announcements on this front as early as next month.

“Our system is working in real time,” he said. “We’re taking signals from the circuits every so many seconds, and can see and interpret many different types of behavior. You could imagine, then, if you’re characterizing all this information on a regular basis between the substation and the home, the impacts of the fidelity at which you make these decisions impacts the grid itself.”

Lots of utilities are turning to smart meters, grid sensors, advanced inverters and other grid-edge devices for data to analyze and convert into valuable information. The difference with Utilidata’s approach, DePasquale said, is that it’s seeking to layer its data analytics potential on top of a system that already offers a clear-cut return on investment on its CVR potential. “It’s kind of a Trojan horse approach, with more to follow on the innovation side,” he added.

In some ways, Utilidata’s approach represents the reverse of another method of managing distribution grid voltages, one that’s growing in popularity. That’s the concept of using already deployed smart meters (AMI) as data collection and monitoring points for CVR. More than ten projects across the U.S. are using AMI-supported CVR systems, with Dominion Voltage Inc.’s solution playing a role in several deployments, along with distribution grid technology providers including Survalent, Efacec and Leidos, and AMI vendors including Silver Spring Networks, Sensus, Elster, Landis+Gyr and Tantalus.

AMI represents a piece of Utilidata’s approach as well -- for instance, it’s working with Silver Spring Networks on its AEP Ohio projects, a partnership that could continue to grow under the utility’s proposed $290 million expansion plan. But Utilidata has also “been able to show we can outperform folks using AMI, before we use AMI,” DePasquale said. “We can deploy voltage optimization, and get many benefits out of our enhanced ability to monitor the grid, with much-reduced risk.”

Claims like these are sure to undergo close scrutiny by utilities like AEP and National Grid, which are the first customers to look into deploying Utilidata’s new array of services beyond CVR. At the same time, new technologies, such as the power electronics systems being developed by startups like Varentec and Gridco, are laying claim to even more fine-tuned control of distribution grid voltages.

All of these startups will have to contend with established CVR offerings from grid giants such as Alstom, Siemens, Schneider Electric, General Electric, S&C Electric Co., and others. Of course, competitors like these can also end up being partners. With CVR remaining one of the more attractive options for utilities seeking to meet efficiency targets, extend the capacity of generation resources, and manage the growing instabilities on the edge of the grid, stay tuned for emerging technologies to be put to the test.