Smart grids (2024)
Europe’s new power players
Last updated: 27 Jun 2024
Market 101
The electricity grid is undergoing a massive shakeup. Unlike power generated by fossil fuels — which can be turned on and off to meet demand — renewable energy sources like wind and solar produce power intermittently: when the wind is blowing and the sun is shining. That means electricity grids need to be able to balance different power inputs to ensure stable supply.
In some parts of Europe, it’s now no longer possible to onboard new renewable generation sources because of a lack of balancing capacity in the grid. Balancing the grid is already extremely expensive — it cost the UK £5.6bn in 2022, which was borne entirely by consumers.
As well as changes to the supply of electricity, demand is changing too. The green transition means an increasing number of electric vehicles and heat pumps need electricity, adding to the strain on the grid. And all these new AI tools? They’re incredible — you might even say wasteful — energy hogs.
To combat this, new smart grids use a combination of software and hardware to match the supply and demand of electricity in real time to maintain a stable, reliable power supply.
The tech solutions fall into two camps. There are software tools which help manage supply and demand or monitor the grid in real-time. Then there are hardware solutions like grid-scale batteries and next-generation versions of parts of the grid itself, like transformers, the device used to increase or decrease voltage. Some companies are also building hardware with a software layer on top.
Investors are cottoning onto the opportunity the grid shakeup could bring. VCs piled a record $1.5bn into grid technologies in Europe in 2023; though that figure has fallen in the first half of 2024.
Most of that money has gone into batteries, typically a large capex investment. Companies that offer battery energy storage systems often have an agreement with the grid to act as a so-called balance responsible party, helping to rectify imbalances in the grid. They can also trade energy on the wholesale energy markets in Europe, or sometimes use a middleman, such as a large energy company, to trade stored energy for them.
Early stage market map
Deals
Key facts
11m
kilometres that are taken up by power grids in the EU1
60%
is how much electricity consumption is expected to rise between now and 2030 in the EU2
€584bn
the sum of money the EU says is required to upgrade the region’s grids3
Trends to watch
Rise of the aggregators
Alongside batteries, startups are working on other tools to help balance the grid. They’re an example of the hardware-software combo we’re seeing more of in climate tech.
Dutch startup Sympower, for example, partners with companies that use a significant amount of energy, gains access to some of their energy assets and can turn them on and off when the grid requires balancing. By aggregating the demands of several companies together, Sympower aims to deliver a high amount of balancing capacity to the grid.
The companies are paid by the grid for acting as reserve balancing capacity and then paid more if they’re actually needed.
More companies are working on aggregation to balance the grid. Another is Norwegian-Swedish startup Tibber, which uses home energy assets to bring flexibility to the grid.At first, Tibber used customers’ electric vehicles to balance the grid — these can act as mini batteries dispatching and storing energy. It now also integrates heat pumps, solar panels and domestic batteries.
Incoming regulation
To work, aggregators need jurisdictions they work in to have legislation in place that allows companies to provide flexibility services to the grid. Some countries have allowed it for longer than others. The UK has been a leader, Greece opened up its flexibility market last year and industry insiders expect Poland to do the same this year.
Despite being a leader in battery production, Sweden has been one of the slower to adopt grid flexibility mechanisms. Companies wanting to act as a flexibility partner in Sweden have to go through a middleman but this year it’s expected that they’ll be able to interact directly with the grid.
Transformer tech
Companies are also starting to work on tech that changes elements of the grid itself.
Transformers sit throughout the grid to convert the high voltage electricity that travels around the main network into a lower voltage that can be used in households. Spanish company IONATE provides next-generation transformers that monitor the voltage to a minute level and can dynamically control it based on the supply of electricity at a given time.
Edinburgh-based ENODA is also working on a device that replaces the transformer and other parts of the distribution substation.
Sub-sea cables
On the most ambitious end of grid tech innovation are high voltage direct current (HVDC) cables, which sit along the sea bed to transmit electricity over a very long distance while minimising power losses. Moving energy between countries could help fill in intermittency and create much more reliable grids. UK startup Xlinks, for example, is building an HVDC cable from Morocco to the UK, bringing in solar power.
Building cables is a hugely capital intensive endeavour, so most of the work is being done by established energy companies but, if startups like Xlinks can pull it off, the reward would be significant.
Startups tracked by Sifted
Sifted take
Climate tech-focused investors have cottoned onto the opportunity of grid transformation across the last year or two. Within grid tech, companies building batteries for energy storage have seen the most investor interest, including from generalist investors. Grid tech is more at the whim of governments and regulators than other areas of climate technology. Waiting times for batteries to plug into the grid are long documented. While entities like the International Energy Agency have been discussing the need for grid overhaul for a relatively long time, there are still questions about how in-depth political movers and shakers’ knowledge of the situation is. Although the grid transformation is underway, the speed at which tech gets deployed depends in part on political will. Some of the hardware-based grid tech solutions are incredibly capital intensive, and existing energy companies will have an upper hand working on them. Where startups are making headway, we’re likely to see more of them partner with established utility or grid operating companies to build out the solutions. Startups that can secure those partnerships will be likely to be winners as they’ll secure industry buy-in from an earlier stage.
Rising stars
Helps create networks of small energy-producing or storage devices, like solar panels and batteries, that are pooled together to serve the electricity grid.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€10m
Helps store renewable energy generated during periods of low demand, which is then released to the grid when demand is high. Launched in 2022, it counts 468 Capital and PT1 in its cap table.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€7m
Monitors energy usage to find the best offer on the market and allows customers to purchase electricity directly from a new solar or wind park.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
Seed
Backed by Union Square Ventures and Energy Revolution Ventures, it offers semiconductor-based circuit breakers and household fuses.
Round
Seed
Valuation
Undisclosed
Date
2024
Size
€5m
Early stage startups to watch
Adia Thermal
Sustainable Heating Solutions
€600k
€500k
-
Axle Energy
Energy Optimization Solutions
€1.4m
€1.4m
-
Bisly
Energy Optimization Solutions
€5.3m
€3.6m
-
Blixt
Grid monitoring and analytics
€10m
€5m
-
BOLDR
Sustainable Heating Solutions
€1.3m
€1.2m
-
Bren
Energy Optimization Solutions
€11.2m
€10.9m
-
Capalo AI
Storage
€2.5m
€2m
-
Cleanwatts
Energy Transition Solutions
€25m
€25m
-
Delta Green
Energy Transition Solutions
€2.2m
€2.2m
-
EcoSync
Energy Optimization Solutions
€1.8m
€1.1m
€812k
Ecoworks
Energy Optimization Solutions
€79.6m
€40m
-
Eddy Grid
Storage
€1.5m
€1.5m
-
Elyos Energy
Energy Optimization Solutions
€2.7m
€2.7m
-
Emulate Energy AB
Storage
€5m
€3m
-
encentive
Energy Optimization Solutions
€2.7m
€2.7m
-
Encoord
Energy Transition Solutions
€3.3m
€2.2m
-
Enee
Energy Optimization Solutions
€2.5m
€800k
-
Ener-pacte
Energy Optimization Solutions
€3.8m
€1.6m
-
Enerpoly
Energy Transition Solutions
Battery technology
€14.6m
€7.6m
-
Enersee (Formerly Eneos)
Grid monitoring and analytics
€1.2m
€1.2m
-
Eneryield
Grid monitoring and analytics
-
€110k
-
ENFASYS
Energy Optimization Solutions
€500k
€400k
-
Enline
Energy Transition Solutions
€4.5m
€3.5m
-
Enode
Energy Optimization Solutions
€15.7m
€13.6m
-
Faradai
Grid monitoring and analytics
-
€3m
-
-
Fever
Energy Optimization Solutions
€11.5m
€10m
-
Flextools
Energy Optimization Solutions
€460k
€460k
-
Frequenz
Grid monitoring and analytics
€10m
€10m
-
Fuse Energy
Energy providers
€27.3m
€27.3m
-
Green Fusion
Energy Optimization Solutions
€2.9m
€2.7m
-
Gridio
Energy Optimization Solutions
€1.5m
€1m
-
Hive Power
Grid monitoring and analytics
€1m
€440k
-
Hybrid Energy Storage Solutions
Storage
€3m
€2.3m
-
IONATE
Grid monitoring and analytics
€4.9m
€3.8m
-
measurable.energy
Energy Optimization Solutions
€5.4m
€5.4m
€27m
Metergrid
Energy Optimization Solutions
€2.8m
€2.7m
-
Nuventura
Grid monitoring and analytics
SF6-free gas
€30.2m
€25m
-
OrxaGrid
Grid monitoring and analytics
-
-
-
-
Ostrom
Energy Transition Solutions
€21.2m
€7.5m
-
phelas
Energy Transition Solutions
€4.7m
€4.1m
-
Plexigrid
Grid monitoring and analytics
€6.4m
€2m
-
Purecontrol
Energy Transition Solutions
€8.7m
€7m
-
Reel
Energy Transition Solutions
€7.3m
€5m
-
RheEnergise
Energy Optimization Solutions
€13.1m
€410k
-
Safegrid
Grid monitoring and analytics
€7.7m
€5.7m
-
Sinergy Flow
Storage
€1.8m
€1.8m
-
Smart & Connective
Energy Optimization Solutions
€1.1m
€1.1m
-
SmartPulse Technology Inc.
Energy Optimization Solutions
Clean energy&Solar
€1.8m
€910k
-
Spot My Energy
Energy Optimization Solutions
€1.6m
€1.6m
-
SuperNode
Grid monitoring and analytics
€30m
€16m
-
Terra One Climate Solutions GmbH
Storage
€7m
€7m
-
Tibo Energy
Grid monitoring and analytics
€3m
€3m
-
TokWise
Energy Optimization Solutions
€3.2m
€3m
-
VOLTQUANT
Energy Optimization Solutions
-
-
-
Withthegrid
Grid monitoring and analytics
€1m
€1m
-
Xunison
Energy Optimization Solutions
€3.4m
€3.4m
-
Zaphiro technologies
Grid monitoring and analytics
€11.8m
€2.1m
-
Europe’s success stories
Who early stage startups are up against
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
The UK’s second-largest energy supplier, which recently reached a valuation of $8bn and recorded over 5m retail customers and 52m accounts.
(Pre-)Seed
Series A
Series B
Series C
Series D+
IPO/Exit
Bristol energy supplier — the fourth biggest in the UK — founded by Northern Irish businessman Stephen Fitzpatrick in 2009. Among its investors are Mayfair Equity Partners, Morgan Stanley and Mitsubishi.
Sources
Sifted Scout
Sifted Scout | June 2024 | Sifted
News
2024: the year of grid tech | January 2024 | Sifted
Zettle and Spotify alumni raise €10m for grid tech startup Fever | February 2024 | Sifted
Enspired secures €25m for battery storage energy tech | May 2024 | Sifted
Former Grover CFO raises $7.5m to solve the grid with Tesla batteries | April 2024 | Sifted
1 2 "There is no green future for Europe without an upgraded power grid" | September 2023 | Financial Times
3 EU to Put Forward Plan for €584 Billion Overhaul of Power Grids | November 2023 | Bloomberg
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