Voltus, a startup founded in June 2016 by former EnerNOC executive Gregg Dixon, has been getting a bit of buzz over the past few months. This week, the company unveiled what it’s been doing to earn that buzz -- putting together a portfolio of 400 megawatts of demand response across North America's grid markets. 

So far, the San Francisco- and Boston-based startup has won some existing demand response contracts from others -- including at least one from EnerNOC. But its biggest share by far comes from a 300-megawatt, first-of-a-kind aggregation in the territory of Midwest grid operator MISO, including a sizable number of small commercial sites, like restaurants and chain stores, that demand response has thus far struggled to reach. 

The key to unlocking this market is called the Voltlet -- a $100 hardened, Linux-based PC, built from standard parts, and connected and controlled thorough its Amazon Web Services-hosted VoltApp and VoltMarket software platforms. These platforms allow monitoring and control of each device, and the loads they're connected to, by Voltus and its customers. They also manage connections to the dispatch and settlement systems of the grid operators they’re serving. 

According to Dixon, the company’s fundamental business premise is a bit of a flashback to a time before the Supreme Court battle over FERC Order 745 put the demand response industry’s future in doubt. Forget the software-as-a-service, do-it-yourself energy management offerings from companies, including EnerNOC, that put the onus on customers to work out how to save money.

Instead, the company is returning to the “no-cost, no-risk” model of making demand response revenue available to customers, and opening new markets for that simple service. “We are huge advocates of the use of technology, including software and hardware, to find energy savings. But we know the customers don’t want to buy the software, hire the people, and expend the resources to go on a treasure hunt.” 

Voltus is entirely self-funded to date, with about $1 million invested, he said. The company estimates it has about $20 million in contracted revenue and $8 million in total gross margin on its portfolio so far. Now it’s seeking strategic investment, both to execute on its existing portfolio and to pursue international opportunities later this year.

“We wanted to stand the business up quickly, put our nose to the grindstone, build up a significant customer base, and then say we’re cash-flow positive. But there are so many more business opportunities -- the only way to do that is to reach out to outside capital," he said.

At least one of the company’s customers, Duquesne Light, is a previous EnerNOC customer, with 46 megawatts through Pennsylvania’s Act 129 program. Dixon declined to name any other customers, although he did say they represent a foothold in every major U.S. grid region, including those served by ISO-NE, NYISO, PJM, MISO, ERCOT, AESO and CAISO.

As for its innovation in MISO, Voltus has cleared more than 300 megawatts of zonal resource credits -- pledges of future capacity that have value for utilities and energy companies within the context of the planning reserve auction.

MISO's method of managing these resource credits differs from most ISOs and RTOs in that it allows them to be traded by those that have them and those that need them, creating a secondary market in which prices to meet obligations can rise far higher than their initial value. 

“MISO is very complex and hard to navigate, unless you really dig through the market rules and the market dynamics, and understand the interplay between auction and bilateral transactions,” he said. It’s also a much less mature or effective market for demand response, as evidenced by the fact that most of its emergency-based product hasn’t been called on for most of a decade.

Still, the company estimates this opportunity across MISO could represent a 10,000+ megawatt market for third-party aggregators. “Where MISO is today is where PJM was in 2006-2007,” Dixon said. “At the time, PJM never dispatched demand response. But as the resource...becomes a more meaningful part of the market, they saw the opportunity to grow.”

Meanwhile, the company’s Voltlets capture enough data quickly enough to do a lot more than day- or hour-ahead demand response, he noted. “Our standard data capture is every 30 seconds, presented in real time, with the ability to remotely set our devices into sub-second data capture. We built it to support customers with demand response, with frequency regulation, any type of ancillary services -- and we built it to capture power quality,” to help customers with such tricky electrical maintenance tasks as three-phase power conditioning, he said.

“For energy-efficiency purposes, that’s very valuable,” added Dixon -- although he noted that Voltus isn’t selling energy efficiency as a business. Rather, some of its existing customers have begun to ask for more data from its Voltlets to conduct their own work. “We have large industrials saying, 'I’m looking at this power quality information, and I don’t know how to decipher it, but I know you guys do.' We’re saying, 'Just hold off until June and we’ll give you the data.'”

GTM Research Analyst Elta Kolo noted that Voltus is “breaking ground in a market that has been sought after by aggregators for years. Not only was the demand response provider able to secure capacity in MISO, but it has done so with a unique aggregation mix. Voltus procured no behind-the-meter-generation; rather, the portfolio comprises demand response from commercial and industrial load, a good portion of which is capacity from very small commercial customers. This is a segment that remains largely untapped by aggregators.” 

Greentech Media will be covering the intersection of demand response, building energy management, distributed energy and the pull and push of market and policy forces at its Grid Edge World Forum 2017 conference this July 27-29 in San Jose, Calif. The three-day conference will feature a who’s-who of utility, grid and distributed energy executives, entrepreneurs and insiders, GTM Research’s latest market and policy updates, and a natural point of contact for people working on ways to bring a greener grid to life from the customer on up. Click here to learn more.