How GridCure is Bringing SaaS to the Energy Industry
Tagg Jefferson looks like your typical Silicon Valley entrepreneur. He’s tall, white, well-spoken, well-educated, good-looking, and charismatic. He looks like Silicon Valley.
But Tagg also represents the best of what Silicon Valley strives to be. Through his global work in energy & utilities, Tagg identified that power companies are now collecting more data, and integrating many more information streams, than they know how to handle. So Tagg began building GridCure — an analytics platform for utilities to make sense of and make actionable their disparate networks of consumption data.
Yes, Tagg drops “big data” into everyday conversation. Yes, he mentions cycling and rock-climbing more than the average person probably does. Yes, he’s adopted many of San Francisco’s most prototypical habits — but he’s also kept the spirit behind the “we-build-things-and-we’re-changing-the-world” attitude that makes it true.
Gridcure is a web-based platform that provides real-time analytics and insights for energy and utilities. GridCure helps power companies recover losses and boost revenue by operating more efficiently. But this doesn’t just mean money in the pockets of big businesses like PG&E. Small improvements by power companies translates to better delivery to consumers, big reductions in energy waste, and increased adoptions of clean technologies.
In 2015, Tagg came to San Francisco to grow GridCure under 500 Startups. The company is now an 8-person team, utilizing SaaS technology and machine learning to make sense of energy providers’ ever-more complex networks and data streams. I spoke with Tagg to learn more about what he’s working toward, and where it all fits in.
A: What is the core problem GridCure is tackling?
T: In the past five or ten years, with better-communicating electrical networks, the average power company is now gathering as much as 100,000 times the information and data coming off their networks back to computer servers. This is a bit like going to bed with one book on your table, and waking up to a whole library in your house. The sheer amount of information that is being collected is drowning IT teams and causing traditional business tools to break. For small to medium sized utilities, especially, this is a huge pain point.
Now what we do is we come to Utilities, take all this data they’re collecting, and extract from that information that is actually valuable to them. We can say, for example: here’s who’s stealing power on your network. Here’s where this hardware piece is going to explode next month and cause a power outage. Here’s how many miles of cables you’ll need to buy next year to replace the assets that are nearing end of life. Some big power companies are already doing this, but we’re coming at it in a new way, as a SaaS company.
A: When you think about GridCure, do you often think how you fit into the larger picture of energy efficiency and environmental sustainability? How important are social impact goals or achievements to your company’s directive?
T: Absolutely it’s something we think about. Energy sustainability is one of the core motivators for what we do. When I think about how to tackle this problem, I think about where to focus, and size of impact. If you had to pick one so-called lever to adjust to reduce total energy usage or output in a given area, that single lever would be at the level of utilities and providers.
It’s the power companies, the folks that are actually running the generation facilities, transmission facilities, and power distribution centers, whose decisions are going to have the biggest effect on actual outcomes. If you find a way to make PG&E, for example, just 1% more efficient, that’s going to produce an equivalent result to swapping out two billion always-on lightbulbs to energy efficient ones. The key clearly lies in improving performance of power companies, and that’s who we’re targeting.
A: What are some of the actions you’ve seen companies make based off the analytics GridCure provides?
T: One example is finding and replacing exhausted hardware before it fails. Transformers, for example, are a critical part of the electrical network that convert energy from one voltage to another. Across the country, many are approaching end-of-life. Traditionally, the decision about when to replace these has been very rule-of-thumb: companies might test them once per year, or decide to replace them after x amount of time. But our platform can actually identify which pieces of hardware, specifically, are ones that utilities will want to watch out for and replace, versus healthy ones that can stay in rotation. This lets companies save money by allocating resources more intelligently, and there are no unplanned disruptions in energy supply to end-users.
Right now, 60% of utilities budgets goes into maintaining what they already have. We’ve built a multitude of different parameters into our machine learning algorithms — weather and population changes, for example. When combined with the data companies are collecting along their power networks, we can predict and report exactly which issues need to be addressed. This is a much less costly alternative to the blind and incredibly exhaustive approach of going out and physically surveying what you have.
A: I think we as consumers often picture energy and utilities being these massive, cumbersome entities that are very slow to change. Is this an accurate picture of what the landscape looks like now?
T: I think this reality is changing, and power companies are being forced to adapt. We live in a world where energy and energy networks are becoming much more distributed. You have solar panels popping up on people’s roofs, Tesla power walls in people’s basements. The power industry is transitioning from an age that relied solely on big coal plants to generate energy to route to households. Now, electricity is being generated across the map, and new networks are plugging in to connect and communicate with each other. We’re seeing a lot of traditional business models and delivery systems erode. Large utilities, particularly in Europe, are finding that if they don’t respond to new changes, they’re going to start losing business. You look at the largest European utility, which has lost 90% of it’s market value in the past decade. We predict that a lot more utilities will be forced to respond to new energy technologies and incorporate them more effectively to avoid this.
Long-term, our customer might look very different. We may not be selling to a large utility company as they exist today — we may be working directly with your neighborhood, perhaps even directly with your household. But there will also likely be new companies that emerge to monitor, maintain, and manage new energy technologies that pop up — and they will be our customer as well.
A: I know you’ve done a lot of traveling for GridCure. What are the most striking differences in how energy and utilities operate markets abroad?
T: One of the biggest differences in Energy between North America and Europe is the regulatory environment, particularly with the approach toward renewables. It costs less than half as much money for a household in Germany to install a solar panel and get it up and running, than it would to do so in the US. Even if the price of hardware and installation is the same in both countries, the regulatory fees, overhead, and insurance required in the States adds up to double the cost of the initial installation process. In my mind, this is an inefficiency that is simply unnecessary make-work, but has dramatically influenced how readily and rapidly consumers adopt new technologies like renewables. Even if the technology itself is inexpensive and cheap to use, it can be too much of a hurdle for many families once you add in all these additional hoops and expenses.
For very different reasons, you also see some quite impressive new technology adoptions in countries in the Middle East. These are made possible simply because you have these very strong concentrations of authority that can undertake and implement large-scale projects very quickly. If they wanted to, they might go ahead and decide to build a giant, off-grid city in the middle of the desert that is completely powered by solar energy. [See, for example, the planned city of Masdar in the UAE designed as a hub for cleantech companies.] can very quickly introduce what might otherwise be a years-long overhaul, such as convert an entire government transportation fleet to electric cars.
A: How are changes in the industry going to impact your business?
T: So, our business is not tied to a specific type of energy or system. What we’re doing helps make sense of the increasingly complicated communication networks that are formed as a result of new technologies introduced, and energy diversification. So we’re actually really excited about changes in the landscape. We’re designed to solve for these increases in complexity and enable utility companies to make sense of new data points.
A: What do you imagine for GridCure in 10 years?
T: I want us to be driving change in the utility industry overall: bring computer intelligence into a traditionally very old, slow-moving industry, and see if we can’t speed it up. We want to get Utilities to a place where they are seen as innovators and doing new things to push new energy technologies forward.
For more on these topics visit GridCure’s blog, where you’ll find the latest on smart grid news, new energy technologies, and where to meet up with GridCure around the world.