Peak Power Inc. is receiving support from the private and public sectors for its platform to optimize energy storage systems to maximize benefits for building owners and utilities.
“The combination of energy storage and machine learning and artificial intelligence is where Peak Power was formed to take advantage of those cones of opportunity,” said Peak Power chief executive officer Derek Lim Soo, who founded the firm in Toronto in 2015.
“We’ve become a software company that’s created software that can help optimize the operations of batteries. Building owners can save money on their bills and we can provide additional on-site resiliency for both the grid and the building and help reduce overall greenhouse gas emissions.”
Growth of peak demand electricity in urban areas is rising three to five times faster than overall electricity consumption, according to Peak Power. Electricity supplied during peak events is more expensive and more polluting than base load electricity.
Energy storage reduces peak demand costs by reducing building energy use during peak events.
Software and battery installation
Peak Power’s proprietary software responds to market signals, enables the stacking of numerous revenue streams and predicts the most efficient times to charge and discharge the energy storage system (battery). For example, in Ontario the software can reduce Global Adjustment charges, demand-related charges and participate in demand response programs as well as other utility ancillary services. It also increases on-site resiliency and protects against power outages while helping meet corporate sustainability goals.
“We go to a site and assess historical data on how the building has performed,” explained Lim Soo. “Then we can determine through our software analytics what would be an ideal installation that would take into consideration the limitations of the building with regard to electrical infrastructure, size, location and economics.
“We’ll then design a system with a tried and tested provider like Lockheed Martin, Tesla or GE, and we’ll interface our software with it and install it at the customer’s site and operate it autonomously.”
Appropriate permits for the energy storage system have to be secured from local municipalities and utilities. It then takes about four months to deliver the battery and two weeks to install it. The entire process takes from eight to 10 months, according to Lim Soo.
Peak Power’s software enables the aggregation of numerous sites into a virtual power plant for participation in wholesale electricity markets. These virtual power plants can help utilities and system operators address peak demand, defer infrastructure improvement costs, increase the integration of renewable sources of electricity and improve grid reliability.
Business model and cost savings
Peak Power’s business model is a flexible solution that makes it easy to partner directly with building owners, service providers and developers, and helps them implement and evaluate on-site energy storage solutions.
The cost of procuring a battery (which is about the size of two parking spots for a large building) is the biggest expense, although Lim Soo said the price has dropped by about 70 per cent over the past three or four years.
As the cost continues to fall, the payback is expected to increase significantly. Lim Soo said the payback period in Ontario presently ranges from five to seven years.
Though cost savings can vary depending on the size of the battery, the building and the electricity bill, Lim Soo said clients can typically save between 15 and 25 per cent on their bills if they pay for the system.
“We believe that financing won’t be as novel as it is today,” said Lim Soo. “Building owners will have the ability to buy it themselves or there will be third parties that can offer typical mortgage-type financing.”
Peak Power installed a Tesla power pack with its software in its first location, the National Research Council’s Ottawa campus, in July.
Peak Power’s investors and partners
“Osmington is our lead investor,” said Lim Soo,who has more than 15 years of experience in the clean technology and energy sector. “It brings a lot of expertise in real estate and financing as well as credibility and connections to building owners.”
Peak Power has just been selected to receive $1.9 million in funding from the Canadian government-created Sustainable Development Technology Canada (SDTC) to support the scale-up of its Peak Synergy controls platform across six more energy storage systems in Ontario and New York. Part of the SDTC funding will help to subsidize these six projects.
SDTC promotes sustainable development and supports projects that develop and demonstrate new technologies to address issues related to climate change, air quality and clean water and soil.
“It takes a unique skill set of people who understand software, the energy market and real estate,” said Lim Soo of the Peak Power team. “It’s very difficult to meld all three and balance them out because they all have to work in unison to be able to deliver integrated energy storage systems, which is a combination of hardware, software, project development, project financing and operations.
“It’s quite the gamut that you have to run to do it.”
Peak Power has seven people working for it now and that number will increase to 10 in September. Lim Soo doesn’t expect the company to grow to more than 30 employees.