Axios Exclusive: Startup gets cash for "massive" grid solution

Original Article on Axios by Ben Geman
Illustration: Brendan Lynch/Axios

‍

AGent Energy, a startup that integrates backup generators into the grid during emergencies, raised $11 million in seed funding co-led by Spero Ventures and MassMutual Ventures.

Why it matters: Power demand is rising quickly, straining grids and helping drive up electricity bills.

• But building new power plants is often slow and expensive.
• AGent sees a big market in harnessing backup generators that sit mostly idle at farms, hospitals, factories, big box stores, universities and beyond.

How it works: The year-old startup provides hardware and software that remotely turns on backup generators when grids face emergencies.

• This displaces electricity demand at those sites, freeing up more power for the rest of the grid.
• Backup generators don't erase the need for new power plants, but could provide substantial breathing room.

"This is the fastest and most capital-efficient way to add new capacity to the grid," co-founder and CEO Stephanie Hendricks said, calling it a "massive underutilized resource."

• AGent works with grid operators and utilities to provide this additional capacity, and shares the revenue with the owners of the generators.
• Aggregating these resources creates "rapidly dispatchable, highly reliable distributed power plants," the company said.
• Its system can work with diesel and gas-powered backup generators and batteries.

Zoom in: The Houston-based company has now raised $17 million in a year.

• Intrepid Investment Management and existing investors CIV and Zero Infinity Partners (ZIP) joined the new round. CIV and ZIP provided $6 million last year.
• The firm already operates in three markets, Hendricks said — Texas (ERCOT), the Midcontinent Independent System Operator region, and PJM.
• Its current portfolio is equivalent to the size of a small power plant, she said.

Zoom out: AGent is one of multiple companies making use of distributed resources like solar and batteries to aid grids.

• The company argues that tapping backup generation "delivers capacity at the lowest cost of any new grid resource."

• "One of our areas of expertise is understanding the energy markets and where there are opportunities to monetize," Hendricks said.
• "We're creating technology that connects the assets, but also adds a layer of value through monitoring and managing it," she said.

What they're saying: The Trump administration likes the idea of making better use of existing assets.

• "Leveraging backup generation as a last resort to mitigate power outages saves lives and reduces costs for American families," Deputy Energy Secretary James Danly said in a statement.
• The Energy Department estimates that over 35 gigawatts of backup generation are available to respond to emergencies, and AGent's estimate is substantially higher.
• One gigawatt can power roughly 750,000 homes.

The bottom line: "Stephanie and her team have moved faster than any company we've seen in this space," Spero Ventures principal Stephen Wemple said in a statement.

• "The grid doesn't need to wait five years for new steel in the ground. The capacity is already there, and AGent has built the intelligence layer to unlock it."

‍