Virtual Peaker’s platform taps home devices to help utilities balance the grid

The scrappy Kentucky-based startup has landed $16.6M and a slew of big contracts.

Electric vehicle plugged into charging cord outside a barn in Vermont
Virtual Peaker is helping utilities like Vermont’s Green Mountain Power control thermostats, water heaters, batteries and EVs like this one to balance the grid. (Green Mountain Power)
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Bill Burke, CEO of Virtual Peaker, has spent the past 15 years figuring out how to turn everyday household devices like thermostats and water heaters — and less-everyday devices like batteries and electric vehicles — into the building blocks of a flexible and responsive electric grid. 

That work started when he was a doctoral student at the University of California at Berkeley, where he helped develop some of the world’s first programmable communicating thermostats. It continued with a four-year stint at General Electric, developing learning algorithms and real-time communications networks for thermostats, air conditioners and other connected devices. 

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Virtual Peaker, the company Burke launched in 2015, took this experience and packaged it in a cloud-based software platform that’s being used by more than a dozen U.S. utilities to connect to, communicate with and provide real-time control over a wide range of household devices. 

Last week, the Louisville, Kentucky–based company raised a $16.6 million Series A funding round led by Moore Strategic Ventures and joined by Emerson Ventures, the venture arm of Emerson, the industrial control system, HVAC equipment and utility software giant. It’s a pretty big investment for a company with fewer than 40 employees.

Virtual Peaker has built a roster of utility customers from the ground up. Its first contract was with the 7,500-customer Glasgow Electric Plant Board cooperative in Glasgow, Kentucky, designing the data collection, customer engagement and device control platform for a pilot project that combines smart thermostats, water heaters and batteries. 

In 2016, it won a startup contest held by Vermont utility Green Mountain Power. Soon after, it started working on the utility’s innovative distributed energy program. Along with leasing Tesla Powerwall batteries to its customers, Green Mountain Power used Virtual Peaker’s software to enlist and control Nest thermostats and smart water heaters, and eventually other household batteries under the utility’s bring-your-own-battery” program, which allows customers to install the battery of their choice and enroll it in moneymaking utility programs. 

That experience served as a springboard to other multidevice integration projects with Portland General Electric and a newly announced bring-your-own-battery pilot with Duke Energy Florida, as well as projects with municipal utilities in California, Massachusetts and Washington state and electrical cooperatives in North Carolina, Texas and Vermont. 

Virtual Peaker has also integrated with many of the biggest contenders in the distributed energy resource landscape. Its application programming interface, or API, connects with smart thermostats from Google Nest, Ecobee, Honeywell Home, Sensibo, Flair and Amazon Smart Thermostat; smart water heaters from Rheem, Aquanta, Apricity and e-Radio; EV chargers from ChargePoint, Enel X and Flo; and batteries from SolarEdge, Generac, Sunverge and sonnen. 

We have full technical integration with all those companies,” Burke said in an interview. Utilities are calling events” — that is, issuing requests for customers to reduce power use or share stored energy — then getting the data and interacting in real time through our platform.” 

That makes Virtual Peaker something of a one-stop shop for utilities trying to enlist customers in demand response, virtual power plants and distributed energy resource management systems. These are all part of a common concept that’s seen as vital to operating a grid supplied by ever-growing levels of wind and solar power — convincing households to shift their electricity use patterns to match the variability of electricity supply that changes with the weather and to make their own solar-generated and battery-stored energy available when it’s needed most. 

These distributed energy assets represent an enormous untapped capacity for balancing the grid, one that’s only expected to grow as more customers switch to electric vehicles, replace gas-fueled furnaces with electric heat pumps, and invest in rooftop solar backed by batteries. Forecasts of the amount of flexibility embedded in these devices range from tens to hundreds of megawatts over the coming decade. 

Lots of companies are offering similar software and hardware tools to manage this distributed energy opportunity. Alarm.com’s EnergyHub is linking behind-the-meter devices for utilities such as Arizona Public Service and National Grid. Uplight, the company formed by the merger of Tendril and Simple Energy, counts many of the country’s largest investor-owned utilities as customers and integrates with major thermostat providers such as Google Nest. Silicon Valley startup AutoGrid works with utilities and third-party energy services providers on household aggregations and large-scale industrial loads. 

European energy companies including Enel X, Engie and Centrica are also aggregating batteries, EV chargers and controllable loads. Global grid equipment vendors such as General Electric, Siemens, Hitachi Energy, Schneider Electric and Itron are providing distributed energy control architectures for utilities. 

Low-cost software with a high-touch service 

Virtual Peaker’s approach is a bit different from many of the larger-scale distributed energy technologies out there, however, Burke said. First of all, it’s purely a software-as-a-service platform. 

We don’t do program management,” he said. That’s in contrast to companies such as Uplight and EnergyHub, which do manage utilities’ distributed energy programs. We provide high-quality, self-service technology for all these things” through a user-friendly software interface. 

Screenshot of Virtual Peaker's distributed energy resource management control screen
(Virtual Peaker)

That does mean that Virtual Peaker’s customers can’t outsource responsibility for getting their distributed energy programs up and running. But it also means that not just the giant utilities of the world can afford it,” Burke said, as evidenced by Virtual Peaker’s significant market share with smaller municipal and electric co-ops that lack the big budgets of larger utilities. 

At the same time, Virtual Peaker’s utility customers have praised the hands-on approach that Burke and his team have taken to overcoming the complexities of getting lots of devices from different manufacturers up and running on a single platform. 

Josh Castonguay, Green Mountain Power’s chief innovation officer, described how the utility turned to Virtual Peaker to give it control over a water heater device it was making available to its customers. Within a few weeks they had the device integrated into its platform,” he said in an interview. Since then, we’ve built entire programs based on our work with Virtual Peaker — bring-your-own-thermostat programs, bring-your-own-battery programs, EV charging.” 

Utilities’ efforts to extend their visibility into and control over in-home devices have been fraught with both predictable and unexpected complications that have stymied many early-stage pilot projects. Different devices come with different control and communications technologies that can be hard to integrate into a single software-control architecture, or they may lose interoperability when that software is updated. Different forms of communications networks — household Wi-Fi-to-broadband, cellular networks, smart-meter-based home area networks — come with different reliability and data-collection capabilities. 

It’s actually incredibly complex,” Lon Huber, Duke Energy’s vice president of strategic solutions, said of the utility’s bring-your-own-battery pilot in its Florida service territory that uses Virtual Peaker’s platform. If there’s a software upgrade, the inverter may not be visible to the control system. What if a customer’s Wi-Fi is out? There are so many things you have to control for.” 

While global grid equipment vendors offer their own benefits, Virtual Peaker is a smaller company — it’s more nimble, and that was a benefit in this particular case,” he said. We’re leveraging all kinds of different technologies in this pilot. We have to pivot as we see an issue come up.” 

Smoothing out the device-integration process has been a big focus of Virtual Peaker. Technology moves much more quickly than existing industry standards,” Burke said, and that makes it hard for vendors and utilities alike to design their technologies in a way that will ensure interoperability right off the bat. 

Virtual Peaker makes its APIs available to vendors with a minimal setup fee and no ongoing licensing or registration fees. That makes it easier to get new devices integrated and enrolled, which has helped the company implement projects more quickly. 

From device control to customer engagement and energy forecasting

Virtual Peaker’s software also integrates some of the less-technical challenges of getting lots of devices enlisted in utility programs, Burke said. That includes the all-important aspect of getting customers enrolled as easily as possible — and making sure that what utilities are doing with their devices doesn’t make them decide to leave the program early. 

Utilities have to, first off, find customers who are interested in this,” he said. Then they have to get those customers enrolled. Then they have to keep the customers engaged in the program and keep them happy.” 

Keeping customers happy plays a huge role in the success of distributed energy programs. First-generation demand response programs that turn off air conditioners during the hottest days of the year have struggled to retain customers. Even the more sophisticated smart-thermostat-enabled temperature controls can run into trouble if utilities fail to forewarn and remind customers about the programs being underway, as happened with some Texas customers during last summer’s heat wave.

Utility programs that control batteries and EV chargers present similar risks of leaving customers without the juice they need to ride through blackouts or the range they need for their next drive. We obviously don’t want to deplete the battery for the customer,” Duke’s Huber said. What is the right amount of charge, and what is the proper economic incentive for the customer?” Virtual Peaker’s platform helps manage those issues across multiple types of technologies. 

Virtual Peaker’s work with smaller utilities has also led it to develop the energy-forecasting capabilities needed to make the most of home energy controls, Burke said. Utilities need to know when to call events,” he said. The giant utilities pay millions of dollars to data scientists who have all the models” that can predict the optimal time to reduce air-conditioning loads, tap stored battery power or slow down EV charging. But the rest of the utilities can’t afford that.” Virtual Peaker offers a more limited but more affordable forecasting product.

Screenshot of Virtual Peaker energy forecasting software
(Virtual Peaker)

These customer-engagement and forecasting capabilities are valuable to customers like EnergyUnited, the North Carolina electrical co-op that’s using Virtual Peaker to manage its voluntary and paid peak load-reduction programs. EnergyUnited buys power for its 110,000 members from utility Southern Company under long-term contracts that carry significant costs for the top 10 hours of the summer when electricity demand is expected to reach its peak, said Thomas Golden, the co-op’s chief commercial officer. 

EnergyUnited doesn’t know in advance when those top 10 hours are going to occur during the course of the summer, which means it must predict and act quickly to reduce loads when the emergency events are announced, he said. Virtual Peaker helps us pool our members that want to participate” in a load-reduction program, he said, following up with emails and text messages before events occur, and then, when the time comes, sending real-time signals to thermostats to reduce air-conditioning loads. 

EnergyUnited also choose Virtual Peaker because the company can support the co-op’s future plans to enlist backup generators, batteries and EV chargers as distributed energy resources, according to Golden. 

As we move more and more toward clean energy, we’re going to have to find ways to knock that load down [and] engage with our membership in a way we haven’t done before,” he said. 

Jeff St. John is director of news and special projects at Canary Media.