Written by Andrew Seale
When Derek Lim Soo started energy storage efficiency startup Peak Power, Matt Sachs was happy to offer some support as an investor and watch from afar. Sachs was curious to see what his university friend was up to a decade and a half after the pair graduated from McGill with engineering degrees.
They’d kept in touch, hovering at the periphery of each other's worlds – Sachs as an energy consultant then as a general manager building energy-efficient homes, Lim Soo in the renewable energy world selling wind turbines and consulting cleantech startups.
“He saw the rumblings in the energy storage industry and knew that was going to be a big opportunity,” says Sachs who was living across the country in Vancouver at the time. As the project progressed, Sachs started to see the gravity of what Lim Soo was doing. “This was, in my mind, really, a generational opportunity to be part of the energy transition,” recalls Sachs. “And I basically invited myself to join, I was like, okay, Derek, you know what, I'm going to move to Toronto and join you there.”
This was 2015. At the time it was only Lim Soo, Sachs and Yiran Li, and the company was focusing on setting large buildings up with energy storage. “We quickly realized was we weren't creating value this way… actually, we got some negative responses,” says Sachs. “We realized these (batteries) are being designed by global companies to sell around the world and, at least cost-wise, it was a race to the bottom.”
In order to sell a global product, the batteries needed to be fairly generic. Given that utilities and utility billing structures are so specific and vary so widely from region to region – even within provinces – the current approach to energy storage was in need of some innovation. That’s when Peak Power pivoted. “We realized we needed to create a software that could optimize the operation of these batteries based on local conditions, local weather, local utility rates… all of the very localized elements that helps you create revenue with these types of systems.”
So they did. Think of it as: “energy storage as a service.” Peak Power’s software uses big data and machine-learning algorithms to track and manage renewable energy storage, specifically how it interacts with the grid, making it more efficient and lowering energy bills for commercial building owners.
“Batteries are going to change the energy industry in the same way and for the same reasons that refrigeration changed the milk industry,” says Sachs. “Once you have the ability to store things, any commodity, you can change the distribution model and make it much more efficient.”
Through Ryerson’s Centre for Urban Energy, the startup was able to secure a small grant from the Ontario Centres of Excellence. That snowballed into larger grants from provincial and federal programs and, eventually, a strategic investment from Osmington, the commercial real estate company controlled by David Thomson, chairman of Thomson Reuters. MaRS is also an equity investor in the startup.
“I can unequivocally say being located in Toronto has been a huge boost to the growth of Peak,” says Sachs. “Just being where the investment and clients are, but also having access to both the Ontario provincial and federal funding has been so critical to scaling.”
Today the company has 35 employees with offices in Toronto, New York and Boston. They're in the midst of the Peak Drive pilot program in Toronto, what Sachs calls “pivot two.” Through the pilot – a partnership that includes Nissan – Peak Power will use bi-directional EV chargers in commercial buildings to not just charge their Leafs but also pull energy from the vehicles during periods of peak power usage. Drivers will be compensated.
“We call it the vehicle grid,” says Sachs. “We'll facilitate these transactions, we'll make sure they get paid, we'll provide grid services, and we'll make sure they have enough charge for when they want to get home.”
In Sachs mind, it's the logical next step for the company.
“The view is that this is going to accelerate the purchase of electric vehicles because if we can pay the driver about 40 per cent of the cost of a lease then it’s much cheaper than a gas vehicle,” says Sachs. “We think that we can accelerate the transition to electric vehicles by creating a revenue stream for drivers.”
After that, maybe it’s fleets of autonomous vehicles moving around to buildings and transferring energy to offset peak demands – batteries on the move, so to speak. It’s a lot; a heady discussion, but the sort of conversation Peak Power never shies away from.
“You have to have a vision that investors can get excited about,” says Sachs. “One thing we've been able to do well is to create a balance of having a cashflow company to protect the bottom and a grand vision of the future.”
Photo Credit: Cameron Bartlett (www.snappedbycam.com)