What do you do when you’ve got too much wind or solar power for the grid to handle? You could curtail it, or be forced to pay negative energy market prices to get power consumers to take it off your hands. You could let utilities make it harder to get new green power projects underway, if they're seen as threatening grid stability.

Or maybe you could design software to predict when it’s going to happen, and tap a whole set of utility and customer-side grid edge resources to balance it out. That’s the challenge that U.K. startup Smarter Grid Solutions has taken on, and it’s just landed a big U.S. partner to expand its reach.

On Monday, smart grid networking player Silver Spring Networks (SSNI) announced that it’s joined forces with SGS, offering a joint software-networking solution to balance distributed energy resources (DERs) at scales ranging from microgrids to regional networks. As a proving point, the two cite a project underway since 2012 for London and eastern England distribution utility UK Power Networks. It’s called the Flexible Plug and Play project, and it’s directing £9.7 million ($16 million) toward connecting an array of distributed resources to manage wind and solar resources in Cambridgeshire.

For Silver Spring, which lost out on its bid for the U.K.’s countrywide smart meter rollout last year, the partnership represents an opportunity to expand its work in the U.K. and across Europe. For its Glasgow-based partner, Silver Spring represents a shot at new markets on the other side of the Atlantic, said James Pace, Silver Spring’s managing director of European markets, in an interview.

While Pace declined to say where the partners were seeking to deploy next, he did say that “if you look at Silver Spring’s footprint in the Americas, it’s pretty appealing." The Redwood City, California-based company is working on distribution automation, demand response, EV charging, smart street lighting, distributed data analysis and other innovative grid edge projects. But in terms of SGS’ platform for collecting and managing distributed resources, “we don’t currently have anything in our suite doing what they’re doing,” he said.

SGS’ Active Network Management software is taking on a very complex set of tasks, ranging from microgrid and virtual power plant type controls, to regional supply-demand forecasting and market integration. Since its 2008 founding, the University of Strathclyde spinout has raised £3.5 million ($5.8 million) in venture and public investment, and has helped bring tens of megawatts of green power on-line in the U.K.

Underlying it all is an IT architecture meant to both collect and analyze data independently of underlying grid control systems, and integrate with them to make real-time decisions, said Bob Currie, the company’s chief technology officer, in an interview.

“Some projects are about balancing, others are about maximizing export or import,” he said. “It can be a capacity bottleneck or a voltage issue. Normally, our projects are dealing with tens of megawatts of renewables, but we also do combined heat and power and electric vehicles in urban centers.”

The results, in terms of lower costs of integration and greater returns on the value of those assets, can be quite dramatic, Currie said.

For example, in its Flexible Plug and Play project with Silver Spring, “by combining our technologies there, UK Power Networks has been able to cut interconnect costs for solar and wind by up to 80 percent to 90 percent,” he said. That’s because it’s allowed these new green resources to rely on distribution automation equipment like capacitors and voltage regulators, integrated via SGS’ software and Silver Spring’s networks, rather than paying for expensive upgrades of distribution grid cables and transformers to handle their variable input, Currie said.

Likewise, SGS’ first project on the Orkney Islands, in partnership with utility Scottish and Southern Energy, has allowed 26 megawatts of wind power capacity beyond what was formerly considered feasible, helping to save some £30 million ($50 million) along the way, he said. In simple terms, those benefits come both from selling as much power to the grid as possible when it needs it, and reducing that flow when it becomes a problem, Currie said.

That means that when wind power is light, the SGS system can manage a variety of grid and demand-side resources on the island to reduce consumption and increase the amount being carried via undersea power cables to the mainland. When the wind farms are generating more than that mainland connection can handle, SGS ups the consumption from that set of island-based resources in order to keep exports within limits.  

Since proving its capabilities in Orkney, SGS has launched a £45 million project with SSE in the Shetland Islands, involving resources like water heaters and thermal storage devices, Currie said. It’s working with five of the country’s six distribution network operators on projects related to the U.K.’s Office of Gas and Electricity Markets' Low Carbon Networks Fund, which is also boosting demand response projects across the country. The company has also landed a project with Belgian transmission network operator Elia.

In February, SGS launched a project with New York utility Consolidated Edison and state research organization NYSERDA to test its ability to use distributed asset management to strengthen the grid during storms and other emergencies. The startup officially opened its first U.S. office on Monday, becoming the first tenant of the Urban Future Lab incubator in Brooklyn.

The idea of orchestrating distributed energy resources is far from a new one -- we've been covering a host of companies working on the challenge, from startups to grid giants. The challenge lies in creating the right combination of distributed flexibility and centralized control for each deployment, Currie noted.

"We always distribute part of the algorithms -- part of that software package is actually at the [level of] things we can control," he said. "We have a variety of different architectures that allow people to centralize it or decentralize it, based on their levels of failover and reliability. You have to choose your software partners carefully to provide that kind of capability," Currie continued. "You have to use open standards, and the right set of technologies around those open standards."

Want to know more about cutting-edge smart grid projects like these? Join Greentech Media in San Diego in June for our Grid Edge Live 2014 conference for more insight into distributed energy resources, microgrids, virtual power plants and grid-renewable integration, among other topics.