Renewables have recently displaced coal and gas as the largest source of new UK power generation. Unfortunately, this resource is often wasted while ‘dirty’ energy from fossil fuels is used to meet peaks in demand. Not for much longer, however: the old-world model – produce, ship, consume – is changing and Cambridge-based Origami Energy is one of the leading technology companies driving this transformation.
Origami spent several years under the radar before emerging as a major disruptive force, raising £18.6 million last month to help it develop strategic partnerships with forward thinking energy suppliers.
It has been supported from its beginnings through to the latest round of funding by Cambridge Innovation Capital (CIC), which uses patient capital to help build high-growth technology companies.
Andrew Williamson, Investment Director at CIC, comments that the time is right for Origami’s approach. He says: "New energy generation from distributed power producers now exceeds that from centralised sources. There is considerable interest in optimising the use of distributed generation to reduce costs, stabilise the electricity grid, and cut carbon emissions.
"Origami’s technology makes it possible to manage both demand and supply intelligently. The platform uses factors such as weather conditions to predict demand. It also provides information about energy availability by tracking second-by-second the power generated and consumed by thousands of different sources. For the first time this enables power consumers to manage their procurement dynamically; the market potential is considerable."
CIC looks to invest in global category defining businesses and it employs extensive research to ensure that its investments are world leading. Williamson explains:
"There is now a broad consensus that technological innovation is a significant contributor to GDP growth. However, it takes a long time to build big businesses: GP Bulldog research estimates that it takes eight years to build a business valued over $1 billion, known as a ‘unicorn’, in the tech space in Europe. Those timescales don’t map very well onto traditional ten-year fixed life venture fund cycles.
"The businesses we support are brilliant and cutting edge but are often early stage – some have just come out of the lab and may take a decade to get to critical mass – hence the desire for patient capital which gives the business time to reach its potential."
For Origami the involvement began with CIC’s investment in its Seed-financing round. This helped fund the development of a unique micro-grid laboratory in Waterbeach for thorough testing before real world implementation.
As Peter Bance, CEO of Origami Energy, explains: "We have the UK’s only dedicated micro-grid emulation and testing laboratory which enables us to rigorously test new applications and algorithms, together with batteries and electric vehicles, prior to deployment with our customers.
"This laboratory has been invaluable, as we are able to showcase our technology in real-world environments to our existing customers and potential energy supply partners. They can see tangible examples of how our technology works in applications where energy and power is being actively managed to create additional value.
"This has helped us to validate our technology and allow our partners to understand how our technology can add value to their operations – which might involve developing new services for their customers – while minimising the risks to themselves and their customers."
Origami provides an intelligent approach to measuring, communicating and controlling both energy production and consumption. By offering a method of control it is possible to increase usable capacity in the grid, particularly by allowing renewable power to be used as it is generated, close to the source of production.
Bance continues: "Energy production is becoming distributed, with an increasing contribution coming from clean energy and smaller generators based in a range of locations as diverse as factories, hotels and brown-field sites. By providing a control layer, we have found that we can shape energy demand to match supply – something that has never been done before.
"Rather than building new power stations, we are introducing a software layer that can bring the existing grid to its full potential."
The approach is gaining traction with the industry. Following a further funding round, again with CIC’s support, the company has grown to 60 employees split between its London and Cambridge offices.
Bance says that high growth has been maintained: "Last year we generated our first revenue from individual commercial projects and we are now focused on developing strategic partnerships with innovative energy suppliers under multi-year agreements. For listed renewable energy specialist Good Energy PLC we are supplying battery storage development and operation services; we have a strategic partnership deal with SmartestEnergy, the largest offtaker of independent generation in the UK; and contracts with Aggreko to manage an initial portfolio of energy assets in the UK, with the ambition to work together internationally."
This article originally appeared in Business Weekly.