Australian demand response services start-up, RedGrid, has raised over half a million dollars in equity crowdfunding in just three days, this week, and is already well over its minimum capital-raising target.
RedGrid’s platform enables the linking of older air-conditioners so that institutions like universities can intelligently shed energy loads during heat waves and other peak energy events.
The funds will put the start-up in growth mode and help it crack the residential market, says co-founder and head of marketing and press relations, Alex Evans.
The founding team of three has already grown to a team of six, with plans to expand further.
The founders – Evans, Dr Adam Bumpus and Simon Wilson – first came together as clean energy tech consultants before honing in on “the next frontier” in the clean energy transition: demand management.
“What’s happening, and particularly in summer, is there are periods where everyone is trying to consume energy all at once and the wholesale prices are really high, which is essentially why energy prices are as high as they are for large institutions,” says Evans.
Large institutions such as universities tend to buy directly from the wholesale market rather than through a retailer, leaving them exposed to spikes in energy prices.
Evans says universities can already respond to peak demand but this involves manually turning off air-conditioners and other energy guzzling equipment in medical and science labs.
“When we have peak demand events, nobody has any control over energy consumption in an aggregated way over the campus,” he says.
The financial damage can be huge. There have been instances where energy-intensive equipment has been switched on for just 15 minutes during a peak event, resulting in an extra $100,000 on the university’s energy bill.
RedGrid has managed to develop an AI-enabled software layer that connects air-conditioning units and other appliances, allowing them to switch off during peak events.
Critically, the software isn’t just for newer, smart air-conditioners that have built-in internet connectivity. It works with older air-conditioners by tapping into remote controls that rely on infrared technology.
“The revolution doesn’t have to wait for smart fridges and air-conditioners; we’re already connecting old air-conditioners,” he says.
Evans says smart devices will be next, but the hard part is already out of the way. From a commercial perspective, it make sense to tackle this side of the issue first because large institutions like universities and shopping centres tend to have thousands of existing non-smart devices.
So far, RedGrid has partnered with Monash University to deploy its AI-enabled platform throughout the university’s mini-grid.
The software has the potential to create savings of up to 40 per cent in energy costs per device, against the wholesale costs of energy.
This could equate to as much as $500,000 in savings for the university, which is paying the start-up $200,000 to deploy the technology.
Demand response for homes
RedGrid has its sights set on the residential market, with the goal of automating demand response to provide a bridge between the network and consumers so that households are paid for automatically adjusting their air-conditioners during peak energy periods.
The company is working with retailers such as Energy Australia to make this happen but changes to demand response laws due to come into effect Australia-wide in 2022 will open doors for the company and other third-party demand resource service providers.
At the moment, Evans says all demand response savings that are passed onto consumers have to go through a retailer but by 2022 “the grid will be paying anyone to turn their stuff down”.
“When this happens, we will be able to have a closer relationship with the end user and pass on those savings directly.”
The company also doesn’t believe in burdening their customers with extra tasks or an additional app to manage.
“We don’t want people to have another app that they consciously think about,” RedGrid chief technology officer Simon Wilson says.
“Our technology is adaptive and learns [from] your behaviour to make adjustments automatically, gradually improving as you use it. This saves you money without having to think about it.”
This will pose a challenge for the company on entry into the residential market, where there’s concerns that suddenly switching off the air-conditioning units can have a devastating impact on the health of the ill or elderly.
Evans says the key will be putting in measures to ensure the service is used by “the right people at the right time”.
This doesn’t mean these people will miss out on savings. Turning off the air-conditioning might not be the right demand response measure for the elderly or people with pets at home, but that doesn’t rule out pool pumps and other low-risk appliances.
Evans stresses that the idea is not to create discomfort for people during peak demand periods. It’s more about intelligently bringing the temperature of air-conditioners up a few degrees rather than switching them off, or in a larger facility, staggering temperature hikes across different rooms over a period of time.
Evans says this type of innovation in the grid is well overdue.
“Adding intelligence is an extremely cost-effective way to tackle this massive problem,” he says.
“Our grid cannot cope. Retailers want to pay users to turn down their appliances during these periods, but until now there has been no effective or automated way to do that,” says the company’s CEO, Adam Bumpus.
“We want to enable Australian families to not only save money, but be paid for good energy behaviour.”