Software company Electron has completed a funding round securing £4 million to expand in the UK, Europe, and North America.
East Innovate, the venture capital arm of East Alpha led the funding round, with participation from Riverstone, Nesta, and One Planet Capital, with advisory support from Mountside Ventures.
Electron’s software, ElectronConnect, allows electricity system and network operators, generators, and flexible energy consumers to optimise their use of variable renewable power, and network capacity based on time and location.
Electron stated that their “second-generation, software-based tool enables more dynamic market pricing and deeper integration with network control systems, using a technology-first approach to unlock the scale needed, whilst delivering an improved experience for market operators, providers and end consumers”.
Electron’s chief executive officer, Jo-Jo Hubbard, said: “We believe that time and location-based markets for energy and flexibility are foundational to the fastest, cleanest path to net zero energy. But, when Electron started developing these markets six years ago, the policies, business models and technologies required to support such markets were still unclear.
“Fast forward to today, many of the world’s major economies have already reached 50%+ variable renewable generation; storage technologies have reached inflection point; over 1 million electric vehicles (EVs) are already on the road; and increasingly congested networks have risen to the top of political agendas. There has never been a clearer need or mandate to deploy flexibility markets at scale.
“This funding brings us the resources to scale, as well as the right partners, insight and support on that journey. We are grateful for the backing of investors who share our vision and are excited to get going.”
Nesta’s senior investment director, Alex Hook, commented: “Demand flexibility is becoming increasingly important as our electricity grid manages more intermittent renewable generation such as solar and wind. Electron’s software provides better functionality and control for network operators looking to optimise the amount of renewables they can absorb within their existing network infrastructure. As part of our ongoing work to help decarbonise UK households, Nesta is excited to support Electron as they start to scale-up their business.”
The UK is currently in the process of consultations on Review of Electricity Market Arrangements (REMA), which could change the UK’s marginal pricing system to a zonal or nodal pricing system with locational pricing. Some groups like the Energy Systems Catapult and National Grid are in favour of these reforms, while trade bodies like RenewableUK and Solar Energy UK are against them.
Energy consultancy AFRY has also published a report calling for evolution rather than revolution in energy market reforms. These reforms would allow flexibility service operators to earn higher returns in areas of higher electricity demand.