The Boulder-based utility software company Uplight is acquiring virtual power plant developer AutoGrid for an undisclosed amount, the companies announced today.
The two companies were already linked by their respective relationships with Schneider Electric. The French energy management giant bought AutoGrid, one of the largest VPP operators in the United States, in mid-2022. Schneider also is a major investor in Uplight, having led the company’s 2021 funding round that valued Uplight at $1.5 billion.
The acquisition will create a single platform to “integrate, orchestrate, and monetize distributed energy resources,” Uplight and Autogrid said in a statement, and will increase the ability of utilities and energy companies to create and manage flexible capacity. The combined entity will have more than 700 employees.
Schneider’s decision to sell a company that it hasn’t even owned for two years may come down to a bet that, at least for now, Uplight’s customer-centric solutions better complement AutoGrid’s DERMS technology when it comes to building an offering that meets utility customers’ current needs.
“We’ve seen an emerging trend and desire from utilities to close the gap between the control room and the customer,” said Latitude Intelligence managing director Matt Casey.
The acquisition is a signal that Schneider recognizes that trend, Casey added, and realizes that Autogrid can better “meet the moment” of current utility needs in combination with Uplight. Schneider is still in a position to capitalize on this potential as an investor in Uplight.
“Combining Uplight’s strengths in engaging and enrolling energy customers with Autogrid’s advanced Flex technology unlocks more growth and opportunities operating as a single company versus partnering as separate entities,” AutoGrid told Latitude Media. “As an investor in Uplight and AutoGrid, Schneider sees the potential to maximize the opportunity for all three companies through this acquisition.”
As the U.S. navigates the need to add new power generation capacity, solutions that create “compelling opportunities for active energy customer participation” will rise to the top, the company added.
How to build the VPP market
Building out the still-nascent VPP market requires more direct engagement with utilities, AutoGrid CEO Ruben Llanes told Latitude Media in November. That means AutoGrid and companies like it have to ensure utilities really understand where and how VPPs could fit into their flexibility portfolios, he added.
And Llanes also emphasized the importance of partnerships in “identifying all these distributed assets and making sure we have the ability to aggregate them, optimize them, and ultimately be able to dispatch them.”
Autogrid attracted notice in November for its pilot program with Puget Sound Energy, a model in which AutoGrid handles customer recruitment and enrollment plus the VPP platform, and PSE pays based on power availability and energy provision.
Latitude Intelligence analyst Fei Wang said the fact that the acquisition combines VPP software and a focus on customer engagement “signifies the central role utilities play in enabling VPPs.”
In recent years, she said, vendors with both capabilities tend to be the ones expanding their coverage.
“To truly unleash the potential of VPPs, network visibility is required, especially on the distribution side to measure and optimize VPPs impact on local distribution systems,” Wang added. “This work is thorny and cannot be achieved without extensive utility involvement. VPP vendors can provide valuable insights into customer behavior and the flexibility potential of different DER types.”
The acquisition is pending regulatory approval and is expected to close in the next few weeks.
