Mainspring Energy raises $95M for linear generators to clean up the grid

Mainspring Energy CEO Shannon Miller thinks her company’s fossil-fuel-fired linear generators can be an integral part of a power grid that’s being transformed by renewable energy — particularly as those generators can transition to lower-carbon fuels.

On Tuesday, Mainspring raised a $95 million Series D investment to put that premise to the test. The round was led by Devonshire Investors, the private equity firm affiliated with Fidelity Investments parent company FMR LLC, and adds new investors including Princeville Capital, 40 North Ventures and Chevron Technology Ventures to existing investors Khosla Ventures, Bill Gates, ClearSky, AEP, KCK and Equinor.

The round brings the Menlo Park, Calif.-based startup’s total funding to $228 million. Its core product is now operating at commercial sites after a decade of development, and it has a $150 million contract with NextEra Energy to finance more deployments across the country. The new funding will help Mainspring scale up to serve what could be a rapidly growing market.

These expectations are based on a confluence of factors driving demand for on-site generators, microgrids and other behind-the-meter power systems in U.S. markets. The first is the need to backup power as insurance against the increasing threat of blackouts, whether from wildfires in California, winter cold snaps in Texas, wind storms in the Midwest or hurricanes along the Eastern Seaboard.

Generators that can also provide always-on electricity at a price competitive with the grid can add utility bill reductions to that backup power proposition. And systems that can quickly ramp output up and down can better match on-site loads. They can also serve to balance the fluctuations of rooftop solar power on local distribution circuits and the broader supply-demand imbalances of increasingly wind- and solar-powered grids.

“The combination of fuel flexibility, dispatchability to support renewables and being able to last for multiday outages — we think we’re poised to support [all of] that really effectively,” Miller said in an interview.

The fast-growing market for distributed, dispatchable energy

There are plenty of contenders to serve this growing market, starting with companies replacing the diesel-fired generators that remain the most common source of backup power today. Microgrid developers including Enchanted Rock and Scale Microgrid Solutions are building megawatts’ worth of projects centered on natural-gas-fired reciprocating engines. Fuel cell vendors including Bloom Energy and FuelCell Energy are converting natural gas to electricity for data centers and commercial and industrial sites.

Many of these projects are combining rooftop solar, batteries and more sophisticated energy controls to reduce utility bills and meet clean energy goals while keeping central generation for core reliability. Energy services giants including Schneider Electric and Siemens have formed joint ventures that bring investment capital to reduce the upfront cost for commercial and industrial customers. And a growing number of generator providers such as Cummins, Wärtsilä, Aggreko and Generac are layering in grid services capabilities to boost revenue from demand response programs and participate in energy markets.

Mainspring’s partnership with NextEra Energy Resources, the business services arm of the Florida-based utility and renewables behemoth, is based on a similar energy-as-a-service approach as many of the above-mentioned offerings, bundling backup and always-on power into power-purchase agreement structures that allow customers to pay back installation costs over time.

Low-emissions, fuel-flexible technology to meet the needs of an evolving grid

Mainspring’s linear generators are fundamentally different from the reciprocating-engine-based generators now on the market. Instead of pistons driving a rotating mass to generate electricity, Mainspring’s 250-kilowatt units capture the motion of two oscillators moving back and forth in an air-cushioned housing. They are driven by the compression and released energy of fuels mixed with air in a central chamber.

This core concept, shared by devices ranging from Stirling engines to linear alternators, has been refined by Mainspring’s engineering team since Miller and company co-founders Matt Svrcek and Adam Simpson first started working on it at Stanford University.

Using pressure to cause an energetic reaction to drive its oscillators cuts emissions of nitrous oxides, or NOx, nearly to zero, compared to engines that ignite fuel. This will allow them to be used in places with stringent local air-quality regulations. Sophisticated power electronics provide fine-grained control over the position of the oscillators, so they can adjust output to match on-site loads or respond to grid fluctuations.

This same micro-adjustment capability also allows Mainspring’s devices to run on different fuels, from biogas to hydrogen, without altering the equipment itself, Miller said. While natural gas is by far the predominant fuel being used by customers today, ​“we’re actively looking to biogas projects.” NextEra, one of the first U.S. utilities to plan a significant investment in green hydrogen production, is ​“really excited about hydrogen as well.”

Hydrogen-fueled generators being built by companies such as Wärtsilä require different designs than those using natural gas. Fuel cells can run on hydrogen to produce zero-carbon energy or on renewable natural gas for a carbon-neutral emissions profile. But fuel cells are designed to generate power at a steady output, not to shift output up and down.

In that light, Mainspring’s technology fits well with a market that’s hungry for cost-effective backup power today but eager to shift from fossil fuels to lower-carbon alternatives as they become available, Eric Kosmowski, managing partner at Princeville Capital’s Climate Technology Fund, said in an interview.

“This fuel-flexibility piece is, in a sense, future-proofing any investments that customers might have in this technology,” he said. ​“The more we have supplies of other types of clean fuels, the more impact Mainspring will have.”

As a later-stage investor, his firm looks for technologies that have already been proven in commercial deployments. Mainspring units are ​“already deployed in the field,” he said. ​“Now it’s about ramping up and meeting customer demand, which is very high.”

(Article images courtesy of Mainspring Energy)