As blackouts loom, this startup secures €42m to balance the power grid: 'Europe needs energy resilience'

Europe is electrifying – cars are becoming battery-powered, gas boilers are being replaced by heat pumps, and massive data centres are plugging into green energy.

That surge in electricity demand is a good sign for the energy transition, but is placing strain on Europe’s aging power grid. The EU estimates that upgrading the grid to handle these new loads could cost over €2 trillion by 2050. Left unchecked, experts warn that disruptions like the sweeping blackouts in Spain and Portugal this April could become more frequent.

While Europe plans costly grid upgrades, an approach known as demand response could help ease the strain in the short-term. Demand response is when electricity use is temporarily shifted or reduced to help balance the grid during peak demand.

“Across Europe, there’s already enough flexible electricity use and storage to free up 100 gigawatts of power,” Simon Bushnell, CEO of Dutch startup Sympower, tells Impact Loop. “It’s just kind of waiting there ready to be unlocked.”

Paying you to use less power

Sympower was a first-mover in commercialising demand response software when it launched in 2015. The company partners with businesses that use a large amount of electricity, such as factories. It gains access to some of their energy assets and can turn them on and off when the grid requires balancing. Its software platform optimises when and how much power businesses can sell at any given time.

Grid operators pay Sympower to stabilise supply, and most of that money goes to participating businesses, with Sympower keeping a small service fee. The idea is that the system gives companies an incentive to cut electricity use during peak demand – the more they save, the more they earn – while easing strain on the power grid.

Bushnell thinks demand response can be big business – and investors seem to agree. The Amsterdam-based startup has just secured €19m from Dutch pension fund PGGM, capping off its Series B funding round at €42m and bringing its total raised to date to €80m.

It’s a significant vote of confidence, but hurdles to demand response adoption remain. According to Bushnell, one of them are the energy suppliers themselves.

The pushback

In many countries, regulators reward energy utilities for building and owning physical infrastructure rather than for improving operational efficiency. So even if demand response is good for the grid, it’s not necessarily good for business for energy incumbents.

“For instance, in Spain the market for demand response should be huge but the big energy suppliers push back against it,” says Bushnell.

“Demand response is low-hanging fruit for grid operators but without the cooperation from energy companies its adoption will be very slow,” he says. “It’s very frustrating.”

Sympower spends a significant amount of time and resources lobbying governments in an effort to boost demand response uptake, says Bushnell. “We try to make it very clear that this technology builds energy resilience for Europe.”

While it continues to press public entities, Sympower is increasingly working with private battery storage companies as well, who use its software to optimise their energy systems.

The company currently manages more than 2.7 GW of flexible energy assets across Europe, including battery storage systems in the Nordics and Greece, and is now pursuing mergers and acquisitions to expand further.