The virtual power plant market may be entering a new phase, if this week’s spate of deals merging customer enrollment expertise with optimization software is anything to go by.
Google announced yesterday that it is selling Nest Renew, its load-shifting service for smart thermostats, to OhmConnect. The deal will combine the two entities into a brand-new company called Renew Home, which is expected to manage a combined network of millions of homes. (The smart thermostat Google Nest, however, is remaining with Google.)
The merger was funded by Sidewalk Infrastructure Partners, a spinoff of Google subsidiary Sidewalk Labs, which wound down in 2021. SIP is also giving Renew Home a $100 million boost to get things off the ground, the firm said in a statement. Google is a minority investor.
The news came the same day as Schneider’s announcement that it was selling the virtual power plant developer AutoGrid to Uplight. Schneider, which bought AutoGrid in 2022, is also a major investor in Uplight, and led a funding round that valued the company at $1.5 billion.
Both deals are pending regulatory approval.
The flurry of consolidation activity in the still-evolving market signals an increased awareness of the value opportunity VPPs present, and a desire to better position their capabilities to match utility needs.
It’s a market signal that many utilities saw coming, said Pradeep Tagare, VP of corporate venture capital at National Grid Partners, a venture capital firm connected to the utility National Grid.
“What these moves suggest is that a decentralized grid, as far as generation goes, is getting closer and closer to reality,” Tagare told Latitude Media. That’s still “a long ways off,” but the deals are “good data points” for utilities.
“The space is evolving as we had believed it would,” he added. “From our point of view, no surprises. We are going to see a lot more consolidation in this space.”
