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âThe system was originally built to adjust supply, to meet demand. Everything about it was built that way, the market design, the physical infrastructure, everything.
Now we're evolving it to also adjust demand to meet supply. Supply is becoming more and more intermittent, demand is becoming more and more flexible.
The whole thing is just getting up-ended and for building owners, they can't just close their eyes and not realize that the building is very much part of that."
âDana Guernsey
Welcome to Nexus, a newsletter and podcast for smart people applying smart building technologyâhosted by James Dice. If youâre new to Nexus, you might want to start here.
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Episode 69 is a conversation with Dana Guernsey, Chief Product Officer at Voltus.
Dana is an energy markets expert at the forefront of integrating commercial and industrial distributed energy resources into electricity markets across the United States.
We talked about how platforms like Voltus are filling the gap between portfolios of buildings on one side and the electricity markets on the other. Each has its own complexity and Voltus is out to smooth that away for building owners in order to capture the value of each building's demand flexibility.
Definitely check out Dana's bold take on where building grid-interaction is headed in the not too distant future too.
You can find Dana Guernsey on LinkedIn.
Enjoy!
Music credit: Dream Big by Audiobingerâlicensed under an Attribution-NonCommercial-ShareAlike License.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
[00:00:03] James Dice: hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
[00:00:31] James Dice: This episode is a conversation with Dana Guernsey, Chief Product Officer at Voltus.
Dana is an energy markets expert at the forefront of integrating commercial and industrial distributed energy resources into electricity markets across the United States.
We talked about how platforms like Voltus are filling the gap between portfolios of buildings on one side and the electricity markets on the other. Each has its own complexity and Voltus is out to smooth that away for building owners in order to capture the value of each building's demand flexibility.
Definitely check out dana's bold take on where building grid-interaction is headed in the not too distant future too.
Without further ado, please enjoy the Nexus Podcast with Dana Guernsey.
Hello, Dana. Welcome to the show. Can you introduce yourself?
[00:01:14] Dana Guernsey: Hey James. Thanks for having me. I'm Dana Guernsey and I am chief product officer at Bolton.
[00:01:21] James Dice: All right. I'm so excited to have you on, can you start by giving us a little background? What'd you do before volt?
[00:01:28] Dana Guernsey: Cool. I'll start at the top. So I studied mechanical engineering at Dartmouth for both undergrad and grad. And I think that was when I first found my way to the like environmental mission side of the power sector, which I don't think it was obvious at the time.
Unique chance to come at it from the angle of how can we make this work cool as the college kids do, I guess, but it was right around the time when the Prius was gaining traction. And if you, if you recall, it was more or less dislike egg on wheels and definitely had a stigma of not being high performance.
So as an engineering student, Afforded this choice to do a culminating experience project. Excuse me. I worked on a project converting an old formula student race car into a hybrid. Okay. And so, yeah, so it appealed to me immediately because it was, if a race car could be green and outperform the traditional internal combustion engine cars, then maybe the whole industry could see that being green or clean was actually better on all fronts.
Which of course is what Tesla has now done. So I'd like to do it in a joke. I was ahead of my time, because this was 2006 prior to when the Roadster came out in oh eight. So I feel like maybe Elan doesn't give me enough credit. And so then I was realizing then what a fascinating space clean tech was. I heard about this company EnerNOC which many of your listeners are probably familiar with it's now.
And I was drawn to the business model. Innovation of EnerNOC, it wasn't a new invention. It was just a new way of doing old things. And I'd never heard of paying customers to use less energy. And I just thought it was super cool and something I wanted to be a part of. So that was like the beginning. I then stayed there for seven years.
I read eventually their whole international energy markets group. And I think just through that time, I realized how interesting the problem space, the power sector was. The electric grid itself, right? I think it's been called this like greatest feat of the 20th century, which is very valid in my book.
The level of complexity, the magnitude of the market, the fragmentation of the markets. We talk about Balkanize markets and this responsibility to keep the lights on, to keep the economy going too big to fail. And yet I bet most people just go through their day, not thinking twice about the privilege that it is to just on demand.
Relatively no bounds use as much electricity as they want and their homes and their businesses. And they definitely don't think about like the systems and markets and how supply and demand needs to be perfectly balanced, say for some energy storage every minute. So it's pretty wild. All this to say, I think the power sector and clean tech at large are this opportunity to do well by doing good.
And if the 20th century grid was already a feat of modern engineering, then we're sure in for something with the 21st century grid, probably just going to be a dislike jaw, dropping metamorphosis and the whole thing. We're at this inflection point with 21st century technology, that's all here. And then this like really, really aging, old, like dumb set of infrastructure.
We should come back to that point, like just the current state of the grid. so, so that was, that was how the passion spark and how I ended up in this space. Super briefly after EnerNOC I joined a battery storage startup called Ambry. that, which is developing a new type of long duration grid, scale storage storage.
I was drawn to, again, it was just this other side of the grid grid services and transactive grid space compared to the more traditional flavor of demand response at the time, the 2014, because I spent a few years there and ultimately they were a little earlier on in the commercialization process than what I was looking for.
And so I found my way back to. Distributed energy resources more broadly via voltage. All right.
[00:05:28] James Dice: Yeah. I was on the phone with Peter Lafarge, who you might know a CEO of spark fund a couple of weeks ago. And he called, you know, the expectation of always on electricity. He called it Provision of cliquey, like the lights light switch.
And it will just want the power to come on when you flip the light switch. And that, that phrase has been like sticking in my head provision.
[00:05:53] Dana Guernsey: Good one. Yeah. People take it for granted, right? You don't think about it. You just turn your license on or your blow dryer or your, production line, whatever it is.
[00:06:01] James Dice: Totally. All right. So tell me about voltage. What is, what is voltage.
[00:06:07] Dana Guernsey: What is oldest? Alright, well, so in one sentence, voltage is a technology platform that connects distributed energy resources to electricity markets in returns for cash. So we somewhat literally plug energy things into energy markets for the purpose of earning money for our customers, while also creating a more resilient and flexible grid.
So this might be a good chance if you want to zoom out to the big picture for a moment We've got this aging antiquated grid. It's old, it was built for a different world, where there were centralized power plants and they sent power kind of just in one direction.
Right. And so fast forward, that's not the case anymore. More and more things are moving to the grid edge to the distribution piece of it that actually delivers the power to homes and businesses. And you layer in like climate stress and climate emergencies. And then you layer in the fact that we need to accommodate the higher and higher penetration of renewables and electric vehicles.
And the grid that it said it's spring, right? So that's the problem statement. And then on the flip side, if you want to talk like solution or what do we do about it? We do have these abundant and cheap renewables, which are awesome. Solar prices, wind prices have come way down. 21st century technology and it and computing powers.
And we have thousands and thousands of existing assets that aren't being utilized as efficiently as they could be. The analogy I give sometimes is Airbnb. Airbnb is platform. You used to have all of these existing apartments or houses, and when you weren't using them, Nothing came of it. And now you have a platform Airbnb where you can monetize them.
So, so similar with DER's, there are all these resources out there, whether it's a physical office building that might have operational flexibility, whether it's HVAC controls in a commercial property or production lines. And it's in a manufacturing facility or the nest thermostat in your home, or is it.
Nissan leaf charging, your garage, like these are energy assets, but we don't, it's not their primary jobs. Almost like it's a side gig for them to be grid services or grid transactive. And so they need, they need a platform that they can plug into that removes all the complexities of how those transactions connect, but that when they're not performing their primary use case can help support the grid as an existing.
So, what we've done is built, this is we've built a cloud-based technology platform to orchestrate all of this. We kind of the connected tissue of that.
[00:08:47] James Dice: Got it. And what's, what's your role? So you came from the mechanical engineering background. What's your role at the company?
[00:08:54] Dana Guernsey: So I lead our product group and so behind the scenes, it's a ton of complicated product that we're building, which is, which is where our job comes in. So. We want to make this platform very, very simple for our customers.
And the reason that that's a need is because what we're doing is actually very, very, very complex. These markets are fragmented. Each one is its own snowflake. It's nontrivial. Bring simplicity out of that chaos. So the product team is defining our product offerings, scoping out exactly what it is that we need to build.
A, I have an energy markets group in my organization as well. That manages all that. Distributed energy resource portfolios and market participation. They're truly the, the, the energy affectionately, you know, the energy nerds who know everything about how the energy markets work and create those commercial offers.
Based on how it kind of works behind the scenes, you know, 800 to 7,000 page tariff. And yeah, so they're in the thick of it day to day. We're also working on new partnership offering as we continue to build the company and like push the frontier of what the arts can do.
[00:10:02] James Dice: Got it. Got it. Very cool. Yeah. When, when you, when you say platform, you actually mean it. I think there's like a little bit of a epidemic in the smart buildings world. When people say platform, they're not actually, and I've ranted about this in the podcast before people will stop beating the dead horse about this, but you're actually connecting a bunch of customers and their DER's on one side of the platform.
With all of the different energy markets and abstracting away the complexity on both sides for both players in the marketplace. So when you say platform, that's what you're
talking
[00:10:36] Dana Guernsey: about. You just nailed it.
That's all we do. And do folks have an understanding of like what the I'm assuming folks have an understanding of what the RS are?
[00:10:49] James Dice: So yeah, if, if this is their first episode, I'll just talk to them. You can refer back to the show notes and we'll have our auger thing else we've done on DER's. People can go deeper if they want to.
But it's essentially. Any, any device that can be connected that has some sort of demand offering that it can provide to the grid. Is that, is that a fair definition?
[00:11:12] Dana Guernsey: Yeah, I would actually expand on that as a tiny bit. I'm gonna, I'm gonna use the. categories, the focus, the federal energy regulatory commission.
Sure. Everyone probably knows. Well, but there's four key categories. So there's, there's demand response, which is really flexible load. And so it doesn't need to be a device to be a flexible load or. We call demand response. There is distributed generation and that's increasingly like where all the micro grid development is happening.
And lots of talk about resiliency and reliability. There's energy storage, which includes electric vehicles, which at the end of the day, our batteries on wheels and from a, from a grid services perspective, and actually energy efficiency is a der and can be monetized in wholesale markets as well as capacity.
It serves the same use case of say like base-load capacity, because you're just clipping off the bottom of that stack, the amount of energy that's needed. So those four things make up. DER's. And if you want to walk out for a second. So last fall, I think probably folks have heard of this, but last fall, their major ruling for the industry came out of FERC about DER's order 22, 22 or 2, 2, 2, 2, or two by four, And that's really paved the way for all these VR types to aggregate and compete against traditional resources in the organized wholesale markets. And in essence, it blows open the doors all at once for these assets to have unencumbered access to the markets and for Pez directed the markets to pay for them for their services.
So now. Nest or Honeywell thermostat in essence can compete right alongside an aging coal plant. And if you get enough of them together, they form a virtual power plant, which is another word thrown around, which, which basically it's just an aggregation of DER's that can directly displace the traditional power plant, which is.
Yeah,
[00:13:04] James Dice: it's really cool. And I'll also put in the show notes, we did a ridiculous ongoing series called the lens, taking whatever happens in the news and dissecting it, what it means for building people. And I did a, I did a version on for 22, 22. So put that in the show notes as well. This does matter to you behind the meter people and that's why we're digging it into today.
So hopefully. Hopefully, that's pretty obvious. So tell me about the ways in which a building owner and let's kind of frame it uh, from their perspective might enroll in, in what you guys do.
[00:13:38] Dana Guernsey: So any building. Has some form of operational flexibility. They might also have behind the meter devices, the smart thermostats or building management systems or any sort of other flexible load control. Any of those can be aggregated through our platform or through other der providers offerings.
Sold to the wholesale market. They're sold to the wholesale markets. The same way that a power plant would sell their megawatts so that the consumption of power or the reduction in consumption on the part of these buildings can get paid by the wholesale market operators, the same way a power plant would.
So just to give you like a very specific example, let's say you are a commercial real estate property, or a building, and you are. And you're using probably a typical building, these five megawatts of power rule of thumb, probably 10 to 20% of that is flexible when it comes to the programs that they might participate in in New York, Â it's roughly $300,000 per megawatt per year.
For that flexibility. So say one out of the five megawatts is the flexible part of that building either through a building management system or some other sort of behind the meter control, that's where $300,000. And that's what we do is we help those businesses tap into that. We get paid by the market operator as if we were a power plant and we share some of that payment with the, with the end cap.
[00:15:05] James Dice: Makes total sense. So does this apply, tell me about where this applies geographically and then types of buildings, sizes of buildings, different types of businesses. Where does this apply?
[00:15:16] Dana Guernsey: Well, do you graphically? I mean, there's a whole international world in this and every system has. And energy market that, that the physics level of it is run in the same way.
There's capacity, there's energy, there's ancillary services focus on north America. That's where the bolt is. Footprint is. So we are in every one of the nine organized wholesale markets today in north America. And any facility. Again, I go back to any facility that has some sort of flexibility or control or behind the meter.
Der can it. And that goes all the way up to huge steel manufacturing plants down through commercial real estate properties and schools. And we started a treatment plants and retailers, big box stores all the way down through your home. And so all of those, all of those types of things and all of those businesses, Distributed energy resources when you think about it.
And so what we're doing is we're just equipping them to act as such and then plugging them into the markets to get paid for that. Okay.
[00:16:19] James Dice: So what does a typical project look like? And maybe you could talk about like, if there, is there a certain case studies that people can kind of hang their hat on successful case studies.
[00:16:29] Dana Guernsey: So as a platform, any project that we do usually has two sides of it. So I'll give you an example of something that was new for us on both sides. So last year we became the first distributed energy resource aggregator in FTP, the Southwest power pool, which covers something like, I don't know, 16, 17 states in center of the country.
And we became a market participants to provide what's called operating reserves, which every market needs. Operating reserves are procured for the reason that there needs to be a balancing backstop to the day to day, minute to minute fluctuations on the grid. Okay. We talked about the grid being balanced.
Every second. Of course, there are slight imbalances and so balancing resources, their operating reserves address that they get used a couple of times a month on average. And they're relatively short in duration. They're just like quick fixes. So we became a micro participant in Southwest power pool. One of our many customers is a national big box retailer.
And so at the same time, we were standing up a fully loaded end to end integration with them. So we enabled all their facilities in the STP footprints to automatically respond to these grid events, by changing our HVAC step points and gall and end to end signal from SPP to voltage all in real time to these stores.
And back again, we're streaming these especially signals and telemetry. And if you were, you were standing in the store, you would never notice it because there's. They're so short in duration and SPP is, is uniquely in need of this because there's so much wind capacity there. And wind is intermittent. And we can't tell the wind when to blow or the sun when's the shine.
And so in order to have these higher and higher renewable penetration levels, you also need to have more and more flexible load and more and more operating reserves. So that was a project we were proud of in, in SAP.
[00:18:23] James Dice: Okay. So I'm standing in best buy and I'm like looking for my new TV and the thermostat just shifts a couple degrees on the set point.
Is that.
[00:18:32] Dana Guernsey: That's it. And you would never know because there's this like the thermal mass of that best buy in that example. And, and given how short in particular, these are in duration, you can turn the whole HVAC system off for 10 minutes and no one would notice. No, no, no, no notice. And so you can actually get like a whole lot of juice out of those types of programs.
When you're talking HVAC control, we also serve retail stores like that in longer duration programs where they're called capacity programs or for emergency they'll, you know, there'll be two to four to six hours in nature. And for that, we'll set back the set points, but just not as aggressively to we'll send it back a couple of degrees and again, no one really notices.
But in aggregate that can have a huge impact.
[00:19:17] James Dice: Totally. And what's the tech stack look like? Are these, it probably depends on what's installed, but I guess if they have a connected thermostat, you can connect to that remotely. If there's more of like a building automation system, you might have to have something local, like a gateway.
How does, how does that process work and integrating with these systems?
[00:19:36] Dana Guernsey: we have a set of external API APIs. So if there's an existing system, anyone who's got an existing building management system, we can connect directly to that. If they don't have that, we can install a hardware device. We call it our volt lit and that effectively sits on top of the utility metrics.
Counting pulses and a pulse most simply is to sit from it. It's a change of state and it's a counter and it represents the amount of energy that has gone past the meter. Do you imagine those like circular. The utility meters. So if you're counting pulses, you can translate that into how much energy is consumed by the customer on an annual basis.
And so we actually install our booklet and we can collect 30 seconds interval meter data that we then stream to our cloud based platform and can show our customers in real time. So one of the other benefits that that folks get out of it is it's simply the access to their data. And they can do all sorts of energy savings, things with that and alerts on, on high demand days and, and you name it.
[00:20:41] James Dice: Okay. And then what about to the HVAC system? Does the volt that then connect into the BMS? Is that.
[00:20:49] Dana Guernsey: Yeah, it can either be done through the volt led or through some API, depending on really, depending on what the customer wants, our, our team will work with with whatever they, their preferences.
[00:20:59] James Dice: Got it. And then how, how about, how does the monetization work then?
What, how, how does the customer pay or get paid?
[00:21:07] Dana Guernsey: is where it gets even more fun because we pay our customers by and large. And so the way it. You know, most simply is each megawatt will generate some dollar values that your per year call it $50,000 per year. A portion of that comes the cashflow that Constable this, and we share a portion of that with our customer.
And so we're in the business of actually paying our customers, which is like a mind shift. You have to get around because we're getting paid as if we were a power plant by the grid operators, and then we're paying our customers to participate. So from a, you know, why do this perspective? Well, cause we're going to pay you and you don't have to do anything.
There's no upfront costs. We make it very simple starting with a one page agreement and keep it like really layman's terms. Cause we get it. Customers are not in the business of managing energy, right? They, that that's our business. The customers are in the business of managing their business and energy is an afterthought.
And yet it can be a huge expense. And so if we can help them reduce that expense by literally paying them, it, it gets their attention. And so that's how we go to market. And that's how we that's how it works in terms of paying it.
[00:22:18] James Dice: Cool. And you're, you're saying this applies in other countries besides the U S too.
There's a huge, pretty, not huge. There's a, there's a big fault nexus following in APAC and Europe as well. And I think one of the current concerns I always had talked about FERC and talk about, you know, local markets. This is, I'm assuming this is coming to them too. Is that right?
[00:22:39] Dana Guernsey: Yes. In fact, it's already there.
So Japan, the market, I think they've committed to procure something like four gigawatts. So DER's by 20, 24. Don't hold me to that. Something like that. Korea is a market, highly industrialized Australia, certainly Europe, Germany and other countries. Yeah. I think the best way to answer that question is that we need to recognize the primary.
Reasons for being for our customers or their devices. An example of the future would be that when every electric vehicle is also providing grid services, first and foremost, the electric vehicle needs to. Driving around, you know, well, the driver might be driving it or the car might be driving the driver, whichever way you have it in the future.
But the primary use case is that the owner needs to get from place a, to B and that's most important. And so we take that into account. When we talk about buildings to the.
Primary function of the day is something we'll work out with our clients. If it's an industrial facility, for example, they might have a huge production run and that is their priority. And that's that's okay. And that's part of the power of aggregation because it's always going to be somebody's day where they just really need to opt out.
And option value is really important. We need to be able to give people that option value within reason. And that's where. Our sales team and our customer success team come into play because there's this real human elements of it. We need to understand what motivates the customer. And we need to work with them to create a curtailment plan that works.
It doesn't work if we're disrupting a business, right? Our incentives are very aligned. We want them to be able to earn money so we can all share in it.
So from the very beginning, taking the time to understand. By industry vertical, what those needs are and what types of per talent plan works or doesn't work. You know, it works to change HVAC settings, a couple of degrees for a few hours. We know this to be true. It works. When prices are high enough to send people home for the day and not make the widgets we noticed to be true.
And so we, we turned it into a very straightforward, compelling, economic opportunity. Is it worth it? Is it worth X dollars per hour to you to do Y and we really make a formula for them because again, we're dealing with businesses. And so we get right down to the economics of it so that we're not. Doing anything other than giving them the best economic outcome.
[00:25:13] James Dice: That makes sense. That reminds me of kind of like the old, old days of demand response. Not like. Driven demand response, but like whole building control system driven demand response. You have like a program that you press play on and someone has to like design that. Right. I've done several of those control sequences.
Where, when, when it's time we press this button right here and then things happen. Right. Right,
[00:25:37] Dana Guernsey: right. Alarm bells. Yeah. I'm this button and yeah. And there's versions of that for every type of der. You got to define the primary use case. So one more example would be, let's say you've got a solar plus storage installation, call it behind the meter or wherever we want to be.
Probably the reason that that resource was developed was to help offset demand, charges, and cycle daily to make the most use out of the solar. They're probably looking at. The ITC, there's probably all sorts of reasons. We got to understand why was that asset put there to begin with? And then you can realize, okay, well, like overnight that asset's not doing anything, so maybe we can help it generate a higher return for its owner because overnight there's actually still good services value.
And so we really have to be able to Tetris that together. In order to make it work for the customer and to make it simple for them. So one of the things we do is we have a very simple like scheduling interface where folks can just tell us I'm available and not available. Like always keep me out during these hours of the day, whatever it is.
And we can work with that. And then at the portfolio level, you can, you know, as we get big enough, the flywheel effect starts to come into play because now you've got this like bigger saying, even though it's very Mixed in terms of its composition, it actually becomes even more powerful because you don't just have one thing.
Like it's a portfolio. Totally.
[00:27:02] James Dice: Yeah. I'm glad to hear that. It's not. There's no illusions of this being like perfectly automated and like cookie cutter, it sounds like it's like what the building industry really would need, which is like, you're, you're engaging a certain stakeholder in their day to day jobs.
Right. And you're tailoring the solution to that building's needs and the outcomes that they're trying to enable essentially.
[00:27:26] Dana Guernsey: Exactly. And we've got accounts where the needs at the corporate level even can vary from the need that like the building level. And so we'll work with those building chief engineers to make sure that at the building level, they're also bought into the strategy.
Because again, if they're not then like it doesn't work. But then when you show them the economics, you just start and complete by showing them the money. It's very Jerry Maguire, show them like, like it just, it really does ground people in why are we doing this? And then you get their attention. And then you can also explain, well, there's these reliability benefits.
And we look at what happened just recently. We've had all of these environmental climate crises between wildfires. California blackouts last August and Yuri, winter storm Yuri wiping out Texas in February and even just Ida. I think there are people, there are people, Louisiana still doesn't have all its power back on.
And so it's also very front of mind that there's a resiliency component here to the as well. And as you get deeper and deeper into those conversations I like to think it becomes more and more of a no brainer.
[00:28:30] James Dice: Nice. Very cool.
Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
This course is also for you. The alumni are raving about the content, which they say pulls it all together, and they also love getting to meet the other students on the weekly zoom calls and in the private chat room, you can find out more about the course@courses.nexus lab. Start online. All right, back to the interview
so how about the other side of the marketplace for people that don't know how to the nuances to that piece?
Well, what are the extent of sort of keys to success to sort of aggregating or I think a bit more like abstracting away, the complexity of monetizing that flexibility that you're creating
[00:29:26] Dana Guernsey: you mean on the wholesale market side? Yeah. Yeah. I mean, look like when I, when I brag about our team, I think it's, it's always twofold.
It's that we have this extraordinary tech talent and we also have extraordinary energy market expertise. You need folks who are energy market experts. You need folks who understand the terrorists, who live and breathe them, who follow their evolutions, who. Who just know it. And then you also need those, the technology and the platform capabilities to actually connect to these markets.
Because as you get into these more sophisticated products, the, the ER is 2.0 and 3.0, and it's not just those emergency programs. It's all the time. It's the ancillary services type functions. You, the grid operators expect that you're streaming them real time. And that you can't just do that with, you know, what the utility meter does and they expect that you can receive their dispatch signals in real time and send back to them how your resource is performing.
Just the same way that. A single power plant would. And so the technology layer they're mixed with the energy market, extra seats actually manage that portfolio is where it becomes so important on like that other side of, you know, the other, not the der side, the actual market side.
[00:30:46] James Dice: Totally.
[00:30:46] Dana Guernsey: Yeah. And then you have to do that for each market separately because each one it's like, they're so fragmented. And different. And if they sometimes even pride themselves on, you know, we'll mention, oh, well, well PJM or Keiser does it this way. And it, well, we're very different from TJ on the PI. So for X, Y, or Z reasons that it's not even relevant.
So if I could wave one magical regulatory laws, it would be to have single market design. That's not the case. And so each time we do, and this is, this is why. We believe we've run into different competitors, actually in different markets, because it's so hard to stand them all.
[00:31:22] James Dice: Totally. Yeah. And obviously this audience is a lot more familiar with the complexity on the building side.
Every building's different, every building owner's different, every procurement uh,
[00:31:33] Dana Guernsey: yeah, it's the same thing. That's a perfect parallel gene, because you can say all of that and then just talk about the markets themselves and the products within those markets.
[00:31:42] James Dice: Yeah. And that's why it's so exciting. You guys doing it kind of on both sides and that's why it's such a difficult problem as well.
It's probably highly, highly interesting every day. So you mentioned like the other ways to approach this problem. Other aggregators, can you talk about like we've had others on the podcast that have done similar things. Can you talk about how you guys approach the problem differently than other, other sort of aggregator or other platforms?
[00:32:06] Dana Guernsey: Yeah. Um, Let's see. So I think we're unique in that we're able to serve DER's on a national scale with a single platform. So for many of our customers that do have that national footprint, they don't necessarily want to work with different providers in different markets. They certainly don't want to do it themselves.
And so there's no one else right now that I'm aware of that can offer a single connection point to all of the north American electricity. Right. Through through their platform. So that's, that's one, I think another one is that some of our biggest competitors at their core to take an LX, for example, their energy services, energy services companies, they're not necessarily built as a tech company.
So they don't it's just a different DNA. And frankly, I hope, I mean, every, we need everybody to be successful in this space. So the answer here is more just about How I view volt, this is competitively different. And but certainly there's, I would hope faith for everybody.
[00:33:05] James Dice: Totally. The thing I'm wondering about this space is like from the building owners perspective, and maybe there's no answer to this, there can be But like, why should they care?
Right. And most of the reasons that I usually come up with, and, and I think that aligns with what we've talked about so far is like, they care because I'm going to pay you to provide this, this benefit. Right. And what I've always wondered and have been wondering is like, is that payment enough to.
Anywhere near the top of their priority list. Is that, is that a big challenge with like, yes, we're going to pay you and you should pay attention? Like how, how does it, how do you guys get building owners to kind of show up and pay attention and care?
[00:33:48] Dana Guernsey: Look, the simplest the answer is that for the most part, it does make that cut and by layering in a lot of them, Program offerings.
It helps get us there too. So we talk about program stacking, so understanding where you can and can't do that and how, where you might stack versus we've. I like to say sometimes you can, you can be in multiple programs, but just like not in the exact same hour. Well look, there are also customers who just say, Nope, what I do is more valuable than that, and it's not worth my time and that's why we leave at the money and we really try to get to that answer.
Quickly and then move on. Cause it's, you know, it's not for 100% of the buildings out there, but I do think it's the vast majority of them that could benefit from it. just one more, just one more thing on that last point. I think when you then layer in a lot of. Customers are starting to have ESG goals and metrics and talk to them about the impact of what they're doing.
That they're adding to the reliability. They're reducing the carbon footprint of the grid off their building. And then you start talking resiliency. Wouldn't you prefer to be alerted. The grid is about to blackout and paid to curtail rather than not know it was happening and just get your power shot off.
Anyway, like we used to talk about that and people used to say, well, that will never happen. And you're just saying. To, you know, make you sign up for your program or whatever. And, but, but that's no longer, we're no longer met with that answer after California and Texas of late. So resiliency and the focus on micro grid development is a real thing.
And if you're going to do that, you should also be thinking about grid services.
[00:35:32] James Dice: Totally. So is where we're headed with this, you know, like when 2222 gets fully enforced throughout the country, I was going to ask, I was going to lead you, but I want to ask you kind of, where are we headed with this? You know, we start to talk about resiliency and carbon intensity of the grid in real time.
Like where are we headed with this where were the average building be when this is, this is fully implemented, however many years in the future.
[00:35:57] Dana Guernsey: All right. So we could do both predictions. This is fine. So, so like, I believe we can have a 100% carbon neutral grid. And if we have that, then like the marginal cost of energy is not relevant anymore, which means you need to re-imagine wholesale market structure altogether, and think a lot about load flexibility and this resource orchestration, right.
It's going to totally offense. What we know is our model today. Distributed energy resources and, and specifically grid transacted buildings are going to be very much at the heart of that. You're going to need an operating system or a platform to, to allow them to do that. And that's so we're building and boldest, but then you're each yes.
And just each building. I think they're going to just be much more in tune with energy and energy usage. They'll probably all have easy charging networks and you'll see much more micro grid development and probably someone at every building whose job it is to make sure that they're thinking about this.
And I just think that, like, I don't know if it's three years from now or five years or 10 years that this will all just be much more ubiquitous.
[00:37:11] James Dice: I like bold predictions. Yeah. So what, what have we missed so far? Like to ask this question near the end, when I don't know what I don't know. And so like what haven't I asked about yet?
[00:37:23] Dana Guernsey: by the year 2030. A statistic that might be relevant is that the combined lithium-ion battery capacity of electric vehicles in the U S will be more than twice the combined capacity of central power stations.
So we take all the coal, natural gas, hydro, et cetera, in the U S multiply it by two. And that's what will exist in American garages by the year 2030. And when we talk about like the direction of where we're going, And just where and how load is going to shift from this very centralized model that we've had to date.
It's going to totally change it. Like the system was originally built to adjust supply, to meet demand, everything about it was built that way, the market design, the physical infrastructure. And so now we're evolving it to also adjust demand to meet supply. Like supply is becoming more and more intermittent demand is becoming more and more flexible.
The whole thing is just getting up-ended. And I think for, for building owners, They can't just close their eyes and not realize that like, the building is very much part of that.
[00:38:29] James Dice: Yeah. And that doesn't include all of the behind the meter batteries. That just includes cars. You're saying. Wow. Yeah. And, and that's a discount the behind the meter mat batteries.
I'm like looking out over this parking lot right now and all the cars that are just sitting there all day, pretty much. So, yeah. Wow. That definitely puts it in perspective. For sure.
[00:38:54] Dana Guernsey: Yeah. And I think, I guess one other thing just to talk about is I just also think we're at this inflection point of people caring about this.
Like it has become a dinner table topic in a way that it hasn't just over the last six to nine months, you know, I think it started with the election cycle. Certainly some of the infrastructure bill planning helps, but also just it's like climate crisis after climate crisis and grid blackout. After grid blackouts, people are busy.
I have friends who know nothing about.
Energy sector calling and asking you questions. Hey, like is what you do adjusting what's happening right now in Texas. And I'm getting into these conversations. And so it's also manifesting itself in terms of just the inbound of people who want to work on this. We were getting, we used to be concerned about competing for tech talent, you know, with like Google and Facebook and whoever.
And I think something like a third of our teams actually come from tech giant. If people are just increasingly motivated to put their tech skills to work, to do something meaningful and be very mission oriented. But just like being in this space in general has never been more. It's just, it's still, it's never felt like there was as much momentum as there is right now, at least for me.
[00:40:07] James Dice: That's awesome.
Well, thanks for painting this picture for us. I really appreciate it. Do we want to wrap up with two truths and a lie?
[00:40:14] Dana Guernsey: Sure thing I've been, I've been waiting for this moment to stump you Dan.
All right. Now I've put a lot of thought into it. Is it more likely that the person puts the lie the first, second, third, and that you should, you should track that data and let me know. Okay.
Okay. Okay. Okay. All right. So two shifts in the line. Here we go. So one, I own an electric vehicle too. I have driven on a NASCAR race track, and three, my house is entirely light.
[00:40:47] James Dice: I want to say the lie is the NASCAR race track, but I'm so uncertain. This is the most uncertain I've ever been.
[00:40:57] Dana Guernsey: I have driven on a NASCAR racetrack. we took our, our hybrid electric race car from. My graduate program and we, we raced it. And so I was the, it was the lightest on the team at the time being one of the only females. And so I got to drive it for an acceleration run. We went zero to 60 in four seconds.
It was, it was awesome.
[00:41:25] James Dice: You know, you told me enough about your background for me to have intuited that one. And so I'm kind of ashamed of, of my performance.
[00:41:35] Dana Guernsey: All right. Well, you going to try, what's the other, what's the lie now?
[00:41:37] James Dice: Your house is all electric.
[00:41:40] Dana Guernsey: Oh man. That's true too. My house is all electric. We converted we're all electric. But I don't own an Evie and I would really like to somewhere. Okay. All right.
[00:41:51] James Dice: That has been a, that has been a truth or a lie on the podcast before. I can't remember who that was, but uh, damn I have only missed once and the other one was.
What I feel like was a little bit of a cheap shot. You just went straight forward though. And I still, I still failed so well done.
[00:42:09] Dana Guernsey: Well done.
[00:42:11] James Dice: Well, thanks so much. This has been awesome. Getting to know you and voltage. Uh, Thanks for coming on the
[00:42:16] Dana Guernsey: show. Of course. Thanks for having me.
[00:42:23] James Dice: All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.
âThe system was originally built to adjust supply, to meet demand. Everything about it was built that way, the market design, the physical infrastructure, everything.
Now we're evolving it to also adjust demand to meet supply. Supply is becoming more and more intermittent, demand is becoming more and more flexible.
The whole thing is just getting up-ended and for building owners, they can't just close their eyes and not realize that the building is very much part of that."
âDana Guernsey
Welcome to Nexus, a newsletter and podcast for smart people applying smart building technologyâhosted by James Dice. If youâre new to Nexus, you might want to start here.
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Episode 69 is a conversation with Dana Guernsey, Chief Product Officer at Voltus.
Dana is an energy markets expert at the forefront of integrating commercial and industrial distributed energy resources into electricity markets across the United States.
We talked about how platforms like Voltus are filling the gap between portfolios of buildings on one side and the electricity markets on the other. Each has its own complexity and Voltus is out to smooth that away for building owners in order to capture the value of each building's demand flexibility.
Definitely check out Dana's bold take on where building grid-interaction is headed in the not too distant future too.
You can find Dana Guernsey on LinkedIn.
Enjoy!
Music credit: Dream Big by Audiobingerâlicensed under an Attribution-NonCommercial-ShareAlike License.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
[00:00:03] James Dice: hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
[00:00:31] James Dice: This episode is a conversation with Dana Guernsey, Chief Product Officer at Voltus.
Dana is an energy markets expert at the forefront of integrating commercial and industrial distributed energy resources into electricity markets across the United States.
We talked about how platforms like Voltus are filling the gap between portfolios of buildings on one side and the electricity markets on the other. Each has its own complexity and Voltus is out to smooth that away for building owners in order to capture the value of each building's demand flexibility.
Definitely check out dana's bold take on where building grid-interaction is headed in the not too distant future too.
Without further ado, please enjoy the Nexus Podcast with Dana Guernsey.
Hello, Dana. Welcome to the show. Can you introduce yourself?
[00:01:14] Dana Guernsey: Hey James. Thanks for having me. I'm Dana Guernsey and I am chief product officer at Bolton.
[00:01:21] James Dice: All right. I'm so excited to have you on, can you start by giving us a little background? What'd you do before volt?
[00:01:28] Dana Guernsey: Cool. I'll start at the top. So I studied mechanical engineering at Dartmouth for both undergrad and grad. And I think that was when I first found my way to the like environmental mission side of the power sector, which I don't think it was obvious at the time.
Unique chance to come at it from the angle of how can we make this work cool as the college kids do, I guess, but it was right around the time when the Prius was gaining traction. And if you, if you recall, it was more or less dislike egg on wheels and definitely had a stigma of not being high performance.
So as an engineering student, Afforded this choice to do a culminating experience project. Excuse me. I worked on a project converting an old formula student race car into a hybrid. Okay. And so, yeah, so it appealed to me immediately because it was, if a race car could be green and outperform the traditional internal combustion engine cars, then maybe the whole industry could see that being green or clean was actually better on all fronts.
Which of course is what Tesla has now done. So I'd like to do it in a joke. I was ahead of my time, because this was 2006 prior to when the Roadster came out in oh eight. So I feel like maybe Elan doesn't give me enough credit. And so then I was realizing then what a fascinating space clean tech was. I heard about this company EnerNOC which many of your listeners are probably familiar with it's now.
And I was drawn to the business model. Innovation of EnerNOC, it wasn't a new invention. It was just a new way of doing old things. And I'd never heard of paying customers to use less energy. And I just thought it was super cool and something I wanted to be a part of. So that was like the beginning. I then stayed there for seven years.
I read eventually their whole international energy markets group. And I think just through that time, I realized how interesting the problem space, the power sector was. The electric grid itself, right? I think it's been called this like greatest feat of the 20th century, which is very valid in my book.
The level of complexity, the magnitude of the market, the fragmentation of the markets. We talk about Balkanize markets and this responsibility to keep the lights on, to keep the economy going too big to fail. And yet I bet most people just go through their day, not thinking twice about the privilege that it is to just on demand.
Relatively no bounds use as much electricity as they want and their homes and their businesses. And they definitely don't think about like the systems and markets and how supply and demand needs to be perfectly balanced, say for some energy storage every minute. So it's pretty wild. All this to say, I think the power sector and clean tech at large are this opportunity to do well by doing good.
And if the 20th century grid was already a feat of modern engineering, then we're sure in for something with the 21st century grid, probably just going to be a dislike jaw, dropping metamorphosis and the whole thing. We're at this inflection point with 21st century technology, that's all here. And then this like really, really aging, old, like dumb set of infrastructure.
We should come back to that point, like just the current state of the grid. so, so that was, that was how the passion spark and how I ended up in this space. Super briefly after EnerNOC I joined a battery storage startup called Ambry. that, which is developing a new type of long duration grid, scale storage storage.
I was drawn to, again, it was just this other side of the grid grid services and transactive grid space compared to the more traditional flavor of demand response at the time, the 2014, because I spent a few years there and ultimately they were a little earlier on in the commercialization process than what I was looking for.
And so I found my way back to. Distributed energy resources more broadly via voltage. All right.
[00:05:28] James Dice: Yeah. I was on the phone with Peter Lafarge, who you might know a CEO of spark fund a couple of weeks ago. And he called, you know, the expectation of always on electricity. He called it Provision of cliquey, like the lights light switch.
And it will just want the power to come on when you flip the light switch. And that, that phrase has been like sticking in my head provision.
[00:05:53] Dana Guernsey: Good one. Yeah. People take it for granted, right? You don't think about it. You just turn your license on or your blow dryer or your, production line, whatever it is.
[00:06:01] James Dice: Totally. All right. So tell me about voltage. What is, what is voltage.
[00:06:07] Dana Guernsey: What is oldest? Alright, well, so in one sentence, voltage is a technology platform that connects distributed energy resources to electricity markets in returns for cash. So we somewhat literally plug energy things into energy markets for the purpose of earning money for our customers, while also creating a more resilient and flexible grid.
So this might be a good chance if you want to zoom out to the big picture for a moment We've got this aging antiquated grid. It's old, it was built for a different world, where there were centralized power plants and they sent power kind of just in one direction.
Right. And so fast forward, that's not the case anymore. More and more things are moving to the grid edge to the distribution piece of it that actually delivers the power to homes and businesses. And you layer in like climate stress and climate emergencies. And then you layer in the fact that we need to accommodate the higher and higher penetration of renewables and electric vehicles.
And the grid that it said it's spring, right? So that's the problem statement. And then on the flip side, if you want to talk like solution or what do we do about it? We do have these abundant and cheap renewables, which are awesome. Solar prices, wind prices have come way down. 21st century technology and it and computing powers.
And we have thousands and thousands of existing assets that aren't being utilized as efficiently as they could be. The analogy I give sometimes is Airbnb. Airbnb is platform. You used to have all of these existing apartments or houses, and when you weren't using them, Nothing came of it. And now you have a platform Airbnb where you can monetize them.
So, so similar with DER's, there are all these resources out there, whether it's a physical office building that might have operational flexibility, whether it's HVAC controls in a commercial property or production lines. And it's in a manufacturing facility or the nest thermostat in your home, or is it.
Nissan leaf charging, your garage, like these are energy assets, but we don't, it's not their primary jobs. Almost like it's a side gig for them to be grid services or grid transactive. And so they need, they need a platform that they can plug into that removes all the complexities of how those transactions connect, but that when they're not performing their primary use case can help support the grid as an existing.
So, what we've done is built, this is we've built a cloud-based technology platform to orchestrate all of this. We kind of the connected tissue of that.
[00:08:47] James Dice: Got it. And what's, what's your role? So you came from the mechanical engineering background. What's your role at the company?
[00:08:54] Dana Guernsey: So I lead our product group and so behind the scenes, it's a ton of complicated product that we're building, which is, which is where our job comes in. So. We want to make this platform very, very simple for our customers.
And the reason that that's a need is because what we're doing is actually very, very, very complex. These markets are fragmented. Each one is its own snowflake. It's nontrivial. Bring simplicity out of that chaos. So the product team is defining our product offerings, scoping out exactly what it is that we need to build.
A, I have an energy markets group in my organization as well. That manages all that. Distributed energy resource portfolios and market participation. They're truly the, the, the energy affectionately, you know, the energy nerds who know everything about how the energy markets work and create those commercial offers.
Based on how it kind of works behind the scenes, you know, 800 to 7,000 page tariff. And yeah, so they're in the thick of it day to day. We're also working on new partnership offering as we continue to build the company and like push the frontier of what the arts can do.
[00:10:02] James Dice: Got it. Got it. Very cool. Yeah. When, when you, when you say platform, you actually mean it. I think there's like a little bit of a epidemic in the smart buildings world. When people say platform, they're not actually, and I've ranted about this in the podcast before people will stop beating the dead horse about this, but you're actually connecting a bunch of customers and their DER's on one side of the platform.
With all of the different energy markets and abstracting away the complexity on both sides for both players in the marketplace. So when you say platform, that's what you're
talking
[00:10:36] Dana Guernsey: about. You just nailed it.
That's all we do. And do folks have an understanding of like what the I'm assuming folks have an understanding of what the RS are?
[00:10:49] James Dice: So yeah, if, if this is their first episode, I'll just talk to them. You can refer back to the show notes and we'll have our auger thing else we've done on DER's. People can go deeper if they want to.
But it's essentially. Any, any device that can be connected that has some sort of demand offering that it can provide to the grid. Is that, is that a fair definition?
[00:11:12] Dana Guernsey: Yeah, I would actually expand on that as a tiny bit. I'm gonna, I'm gonna use the. categories, the focus, the federal energy regulatory commission.
Sure. Everyone probably knows. Well, but there's four key categories. So there's, there's demand response, which is really flexible load. And so it doesn't need to be a device to be a flexible load or. We call demand response. There is distributed generation and that's increasingly like where all the micro grid development is happening.
And lots of talk about resiliency and reliability. There's energy storage, which includes electric vehicles, which at the end of the day, our batteries on wheels and from a, from a grid services perspective, and actually energy efficiency is a der and can be monetized in wholesale markets as well as capacity.
It serves the same use case of say like base-load capacity, because you're just clipping off the bottom of that stack, the amount of energy that's needed. So those four things make up. DER's. And if you want to walk out for a second. So last fall, I think probably folks have heard of this, but last fall, their major ruling for the industry came out of FERC about DER's order 22, 22 or 2, 2, 2, 2, or two by four, And that's really paved the way for all these VR types to aggregate and compete against traditional resources in the organized wholesale markets. And in essence, it blows open the doors all at once for these assets to have unencumbered access to the markets and for Pez directed the markets to pay for them for their services.
So now. Nest or Honeywell thermostat in essence can compete right alongside an aging coal plant. And if you get enough of them together, they form a virtual power plant, which is another word thrown around, which, which basically it's just an aggregation of DER's that can directly displace the traditional power plant, which is.
Yeah,
[00:13:04] James Dice: it's really cool. And I'll also put in the show notes, we did a ridiculous ongoing series called the lens, taking whatever happens in the news and dissecting it, what it means for building people. And I did a, I did a version on for 22, 22. So put that in the show notes as well. This does matter to you behind the meter people and that's why we're digging it into today.
So hopefully. Hopefully, that's pretty obvious. So tell me about the ways in which a building owner and let's kind of frame it uh, from their perspective might enroll in, in what you guys do.
[00:13:38] Dana Guernsey: So any building. Has some form of operational flexibility. They might also have behind the meter devices, the smart thermostats or building management systems or any sort of other flexible load control. Any of those can be aggregated through our platform or through other der providers offerings.
Sold to the wholesale market. They're sold to the wholesale markets. The same way that a power plant would sell their megawatts so that the consumption of power or the reduction in consumption on the part of these buildings can get paid by the wholesale market operators, the same way a power plant would.
So just to give you like a very specific example, let's say you are a commercial real estate property, or a building, and you are. And you're using probably a typical building, these five megawatts of power rule of thumb, probably 10 to 20% of that is flexible when it comes to the programs that they might participate in in New York, Â it's roughly $300,000 per megawatt per year.
For that flexibility. So say one out of the five megawatts is the flexible part of that building either through a building management system or some other sort of behind the meter control, that's where $300,000. And that's what we do is we help those businesses tap into that. We get paid by the market operator as if we were a power plant and we share some of that payment with the, with the end cap.
[00:15:05] James Dice: Makes total sense. So does this apply, tell me about where this applies geographically and then types of buildings, sizes of buildings, different types of businesses. Where does this apply?
[00:15:16] Dana Guernsey: Well, do you graphically? I mean, there's a whole international world in this and every system has. And energy market that, that the physics level of it is run in the same way.
There's capacity, there's energy, there's ancillary services focus on north America. That's where the bolt is. Footprint is. So we are in every one of the nine organized wholesale markets today in north America. And any facility. Again, I go back to any facility that has some sort of flexibility or control or behind the meter.
Der can it. And that goes all the way up to huge steel manufacturing plants down through commercial real estate properties and schools. And we started a treatment plants and retailers, big box stores all the way down through your home. And so all of those, all of those types of things and all of those businesses, Distributed energy resources when you think about it.
And so what we're doing is we're just equipping them to act as such and then plugging them into the markets to get paid for that. Okay.
[00:16:19] James Dice: So what does a typical project look like? And maybe you could talk about like, if there, is there a certain case studies that people can kind of hang their hat on successful case studies.
[00:16:29] Dana Guernsey: So as a platform, any project that we do usually has two sides of it. So I'll give you an example of something that was new for us on both sides. So last year we became the first distributed energy resource aggregator in FTP, the Southwest power pool, which covers something like, I don't know, 16, 17 states in center of the country.
And we became a market participants to provide what's called operating reserves, which every market needs. Operating reserves are procured for the reason that there needs to be a balancing backstop to the day to day, minute to minute fluctuations on the grid. Okay. We talked about the grid being balanced.
Every second. Of course, there are slight imbalances and so balancing resources, their operating reserves address that they get used a couple of times a month on average. And they're relatively short in duration. They're just like quick fixes. So we became a micro participant in Southwest power pool. One of our many customers is a national big box retailer.
And so at the same time, we were standing up a fully loaded end to end integration with them. So we enabled all their facilities in the STP footprints to automatically respond to these grid events, by changing our HVAC step points and gall and end to end signal from SPP to voltage all in real time to these stores.
And back again, we're streaming these especially signals and telemetry. And if you were, you were standing in the store, you would never notice it because there's. They're so short in duration and SPP is, is uniquely in need of this because there's so much wind capacity there. And wind is intermittent. And we can't tell the wind when to blow or the sun when's the shine.
And so in order to have these higher and higher renewable penetration levels, you also need to have more and more flexible load and more and more operating reserves. So that was a project we were proud of in, in SAP.
[00:18:23] James Dice: Okay. So I'm standing in best buy and I'm like looking for my new TV and the thermostat just shifts a couple degrees on the set point.
Is that.
[00:18:32] Dana Guernsey: That's it. And you would never know because there's this like the thermal mass of that best buy in that example. And, and given how short in particular, these are in duration, you can turn the whole HVAC system off for 10 minutes and no one would notice. No, no, no, no notice. And so you can actually get like a whole lot of juice out of those types of programs.
When you're talking HVAC control, we also serve retail stores like that in longer duration programs where they're called capacity programs or for emergency they'll, you know, there'll be two to four to six hours in nature. And for that, we'll set back the set points, but just not as aggressively to we'll send it back a couple of degrees and again, no one really notices.
But in aggregate that can have a huge impact.
[00:19:17] James Dice: Totally. And what's the tech stack look like? Are these, it probably depends on what's installed, but I guess if they have a connected thermostat, you can connect to that remotely. If there's more of like a building automation system, you might have to have something local, like a gateway.
How does, how does that process work and integrating with these systems?
[00:19:36] Dana Guernsey: we have a set of external API APIs. So if there's an existing system, anyone who's got an existing building management system, we can connect directly to that. If they don't have that, we can install a hardware device. We call it our volt lit and that effectively sits on top of the utility metrics.
Counting pulses and a pulse most simply is to sit from it. It's a change of state and it's a counter and it represents the amount of energy that has gone past the meter. Do you imagine those like circular. The utility meters. So if you're counting pulses, you can translate that into how much energy is consumed by the customer on an annual basis.
And so we actually install our booklet and we can collect 30 seconds interval meter data that we then stream to our cloud based platform and can show our customers in real time. So one of the other benefits that that folks get out of it is it's simply the access to their data. And they can do all sorts of energy savings, things with that and alerts on, on high demand days and, and you name it.
[00:20:41] James Dice: Okay. And then what about to the HVAC system? Does the volt that then connect into the BMS? Is that.
[00:20:49] Dana Guernsey: Yeah, it can either be done through the volt led or through some API, depending on really, depending on what the customer wants, our, our team will work with with whatever they, their preferences.
[00:20:59] James Dice: Got it. And then how, how about, how does the monetization work then?
What, how, how does the customer pay or get paid?
[00:21:07] Dana Guernsey: is where it gets even more fun because we pay our customers by and large. And so the way it. You know, most simply is each megawatt will generate some dollar values that your per year call it $50,000 per year. A portion of that comes the cashflow that Constable this, and we share a portion of that with our customer.
And so we're in the business of actually paying our customers, which is like a mind shift. You have to get around because we're getting paid as if we were a power plant by the grid operators, and then we're paying our customers to participate. So from a, you know, why do this perspective? Well, cause we're going to pay you and you don't have to do anything.
There's no upfront costs. We make it very simple starting with a one page agreement and keep it like really layman's terms. Cause we get it. Customers are not in the business of managing energy, right? They, that that's our business. The customers are in the business of managing their business and energy is an afterthought.
And yet it can be a huge expense. And so if we can help them reduce that expense by literally paying them, it, it gets their attention. And so that's how we go to market. And that's how we that's how it works in terms of paying it.
[00:22:18] James Dice: Cool. And you're, you're saying this applies in other countries besides the U S too.
There's a huge, pretty, not huge. There's a, there's a big fault nexus following in APAC and Europe as well. And I think one of the current concerns I always had talked about FERC and talk about, you know, local markets. This is, I'm assuming this is coming to them too. Is that right?
[00:22:39] Dana Guernsey: Yes. In fact, it's already there.
So Japan, the market, I think they've committed to procure something like four gigawatts. So DER's by 20, 24. Don't hold me to that. Something like that. Korea is a market, highly industrialized Australia, certainly Europe, Germany and other countries. Yeah. I think the best way to answer that question is that we need to recognize the primary.
Reasons for being for our customers or their devices. An example of the future would be that when every electric vehicle is also providing grid services, first and foremost, the electric vehicle needs to. Driving around, you know, well, the driver might be driving it or the car might be driving the driver, whichever way you have it in the future.
But the primary use case is that the owner needs to get from place a, to B and that's most important. And so we take that into account. When we talk about buildings to the.
Primary function of the day is something we'll work out with our clients. If it's an industrial facility, for example, they might have a huge production run and that is their priority. And that's that's okay. And that's part of the power of aggregation because it's always going to be somebody's day where they just really need to opt out.
And option value is really important. We need to be able to give people that option value within reason. And that's where. Our sales team and our customer success team come into play because there's this real human elements of it. We need to understand what motivates the customer. And we need to work with them to create a curtailment plan that works.
It doesn't work if we're disrupting a business, right? Our incentives are very aligned. We want them to be able to earn money so we can all share in it.
So from the very beginning, taking the time to understand. By industry vertical, what those needs are and what types of per talent plan works or doesn't work. You know, it works to change HVAC settings, a couple of degrees for a few hours. We know this to be true. It works. When prices are high enough to send people home for the day and not make the widgets we noticed to be true.
And so we, we turned it into a very straightforward, compelling, economic opportunity. Is it worth it? Is it worth X dollars per hour to you to do Y and we really make a formula for them because again, we're dealing with businesses. And so we get right down to the economics of it so that we're not. Doing anything other than giving them the best economic outcome.
[00:25:13] James Dice: That makes sense. That reminds me of kind of like the old, old days of demand response. Not like. Driven demand response, but like whole building control system driven demand response. You have like a program that you press play on and someone has to like design that. Right. I've done several of those control sequences.
Where, when, when it's time we press this button right here and then things happen. Right. Right,
[00:25:37] Dana Guernsey: right. Alarm bells. Yeah. I'm this button and yeah. And there's versions of that for every type of der. You got to define the primary use case. So one more example would be, let's say you've got a solar plus storage installation, call it behind the meter or wherever we want to be.
Probably the reason that that resource was developed was to help offset demand, charges, and cycle daily to make the most use out of the solar. They're probably looking at. The ITC, there's probably all sorts of reasons. We got to understand why was that asset put there to begin with? And then you can realize, okay, well, like overnight that asset's not doing anything, so maybe we can help it generate a higher return for its owner because overnight there's actually still good services value.
And so we really have to be able to Tetris that together. In order to make it work for the customer and to make it simple for them. So one of the things we do is we have a very simple like scheduling interface where folks can just tell us I'm available and not available. Like always keep me out during these hours of the day, whatever it is.
And we can work with that. And then at the portfolio level, you can, you know, as we get big enough, the flywheel effect starts to come into play because now you've got this like bigger saying, even though it's very Mixed in terms of its composition, it actually becomes even more powerful because you don't just have one thing.
Like it's a portfolio. Totally.
[00:27:02] James Dice: Yeah. I'm glad to hear that. It's not. There's no illusions of this being like perfectly automated and like cookie cutter, it sounds like it's like what the building industry really would need, which is like, you're, you're engaging a certain stakeholder in their day to day jobs.
Right. And you're tailoring the solution to that building's needs and the outcomes that they're trying to enable essentially.
[00:27:26] Dana Guernsey: Exactly. And we've got accounts where the needs at the corporate level even can vary from the need that like the building level. And so we'll work with those building chief engineers to make sure that at the building level, they're also bought into the strategy.
Because again, if they're not then like it doesn't work. But then when you show them the economics, you just start and complete by showing them the money. It's very Jerry Maguire, show them like, like it just, it really does ground people in why are we doing this? And then you get their attention. And then you can also explain, well, there's these reliability benefits.
And we look at what happened just recently. We've had all of these environmental climate crises between wildfires. California blackouts last August and Yuri, winter storm Yuri wiping out Texas in February and even just Ida. I think there are people, there are people, Louisiana still doesn't have all its power back on.
And so it's also very front of mind that there's a resiliency component here to the as well. And as you get deeper and deeper into those conversations I like to think it becomes more and more of a no brainer.
[00:28:30] James Dice: Nice. Very cool.
Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
This course is also for you. The alumni are raving about the content, which they say pulls it all together, and they also love getting to meet the other students on the weekly zoom calls and in the private chat room, you can find out more about the course@courses.nexus lab. Start online. All right, back to the interview
so how about the other side of the marketplace for people that don't know how to the nuances to that piece?
Well, what are the extent of sort of keys to success to sort of aggregating or I think a bit more like abstracting away, the complexity of monetizing that flexibility that you're creating
[00:29:26] Dana Guernsey: you mean on the wholesale market side? Yeah. Yeah. I mean, look like when I, when I brag about our team, I think it's, it's always twofold.
It's that we have this extraordinary tech talent and we also have extraordinary energy market expertise. You need folks who are energy market experts. You need folks who understand the terrorists, who live and breathe them, who follow their evolutions, who. Who just know it. And then you also need those, the technology and the platform capabilities to actually connect to these markets.
Because as you get into these more sophisticated products, the, the ER is 2.0 and 3.0, and it's not just those emergency programs. It's all the time. It's the ancillary services type functions. You, the grid operators expect that you're streaming them real time. And that you can't just do that with, you know, what the utility meter does and they expect that you can receive their dispatch signals in real time and send back to them how your resource is performing.
Just the same way that. A single power plant would. And so the technology layer they're mixed with the energy market, extra seats actually manage that portfolio is where it becomes so important on like that other side of, you know, the other, not the der side, the actual market side.
[00:30:46] James Dice: Totally.
[00:30:46] Dana Guernsey: Yeah. And then you have to do that for each market separately because each one it's like, they're so fragmented. And different. And if they sometimes even pride themselves on, you know, we'll mention, oh, well, well PJM or Keiser does it this way. And it, well, we're very different from TJ on the PI. So for X, Y, or Z reasons that it's not even relevant.
So if I could wave one magical regulatory laws, it would be to have single market design. That's not the case. And so each time we do, and this is, this is why. We believe we've run into different competitors, actually in different markets, because it's so hard to stand them all.
[00:31:22] James Dice: Totally. Yeah. And obviously this audience is a lot more familiar with the complexity on the building side.
Every building's different, every building owner's different, every procurement uh,
[00:31:33] Dana Guernsey: yeah, it's the same thing. That's a perfect parallel gene, because you can say all of that and then just talk about the markets themselves and the products within those markets.
[00:31:42] James Dice: Yeah. And that's why it's so exciting. You guys doing it kind of on both sides and that's why it's such a difficult problem as well.
It's probably highly, highly interesting every day. So you mentioned like the other ways to approach this problem. Other aggregators, can you talk about like we've had others on the podcast that have done similar things. Can you talk about how you guys approach the problem differently than other, other sort of aggregator or other platforms?
[00:32:06] Dana Guernsey: Yeah. Um, Let's see. So I think we're unique in that we're able to serve DER's on a national scale with a single platform. So for many of our customers that do have that national footprint, they don't necessarily want to work with different providers in different markets. They certainly don't want to do it themselves.
And so there's no one else right now that I'm aware of that can offer a single connection point to all of the north American electricity. Right. Through through their platform. So that's, that's one, I think another one is that some of our biggest competitors at their core to take an LX, for example, their energy services, energy services companies, they're not necessarily built as a tech company.
So they don't it's just a different DNA. And frankly, I hope, I mean, every, we need everybody to be successful in this space. So the answer here is more just about How I view volt, this is competitively different. And but certainly there's, I would hope faith for everybody.
[00:33:05] James Dice: Totally. The thing I'm wondering about this space is like from the building owners perspective, and maybe there's no answer to this, there can be But like, why should they care?
Right. And most of the reasons that I usually come up with, and, and I think that aligns with what we've talked about so far is like, they care because I'm going to pay you to provide this, this benefit. Right. And what I've always wondered and have been wondering is like, is that payment enough to.
Anywhere near the top of their priority list. Is that, is that a big challenge with like, yes, we're going to pay you and you should pay attention? Like how, how does it, how do you guys get building owners to kind of show up and pay attention and care?
[00:33:48] Dana Guernsey: Look, the simplest the answer is that for the most part, it does make that cut and by layering in a lot of them, Program offerings.
It helps get us there too. So we talk about program stacking, so understanding where you can and can't do that and how, where you might stack versus we've. I like to say sometimes you can, you can be in multiple programs, but just like not in the exact same hour. Well look, there are also customers who just say, Nope, what I do is more valuable than that, and it's not worth my time and that's why we leave at the money and we really try to get to that answer.
Quickly and then move on. Cause it's, you know, it's not for 100% of the buildings out there, but I do think it's the vast majority of them that could benefit from it. just one more, just one more thing on that last point. I think when you then layer in a lot of. Customers are starting to have ESG goals and metrics and talk to them about the impact of what they're doing.
That they're adding to the reliability. They're reducing the carbon footprint of the grid off their building. And then you start talking resiliency. Wouldn't you prefer to be alerted. The grid is about to blackout and paid to curtail rather than not know it was happening and just get your power shot off.
Anyway, like we used to talk about that and people used to say, well, that will never happen. And you're just saying. To, you know, make you sign up for your program or whatever. And, but, but that's no longer, we're no longer met with that answer after California and Texas of late. So resiliency and the focus on micro grid development is a real thing.
And if you're going to do that, you should also be thinking about grid services.
[00:35:32] James Dice: Totally. So is where we're headed with this, you know, like when 2222 gets fully enforced throughout the country, I was going to ask, I was going to lead you, but I want to ask you kind of, where are we headed with this? You know, we start to talk about resiliency and carbon intensity of the grid in real time.
Like where are we headed with this where were the average building be when this is, this is fully implemented, however many years in the future.
[00:35:57] Dana Guernsey: All right. So we could do both predictions. This is fine. So, so like, I believe we can have a 100% carbon neutral grid. And if we have that, then like the marginal cost of energy is not relevant anymore, which means you need to re-imagine wholesale market structure altogether, and think a lot about load flexibility and this resource orchestration, right.
It's going to totally offense. What we know is our model today. Distributed energy resources and, and specifically grid transacted buildings are going to be very much at the heart of that. You're going to need an operating system or a platform to, to allow them to do that. And that's so we're building and boldest, but then you're each yes.
And just each building. I think they're going to just be much more in tune with energy and energy usage. They'll probably all have easy charging networks and you'll see much more micro grid development and probably someone at every building whose job it is to make sure that they're thinking about this.
And I just think that, like, I don't know if it's three years from now or five years or 10 years that this will all just be much more ubiquitous.
[00:37:11] James Dice: I like bold predictions. Yeah. So what, what have we missed so far? Like to ask this question near the end, when I don't know what I don't know. And so like what haven't I asked about yet?
[00:37:23] Dana Guernsey: by the year 2030. A statistic that might be relevant is that the combined lithium-ion battery capacity of electric vehicles in the U S will be more than twice the combined capacity of central power stations.
So we take all the coal, natural gas, hydro, et cetera, in the U S multiply it by two. And that's what will exist in American garages by the year 2030. And when we talk about like the direction of where we're going, And just where and how load is going to shift from this very centralized model that we've had to date.
It's going to totally change it. Like the system was originally built to adjust supply, to meet demand, everything about it was built that way, the market design, the physical infrastructure. And so now we're evolving it to also adjust demand to meet supply. Like supply is becoming more and more intermittent demand is becoming more and more flexible.
The whole thing is just getting up-ended. And I think for, for building owners, They can't just close their eyes and not realize that like, the building is very much part of that.
[00:38:29] James Dice: Yeah. And that doesn't include all of the behind the meter batteries. That just includes cars. You're saying. Wow. Yeah. And, and that's a discount the behind the meter mat batteries.
I'm like looking out over this parking lot right now and all the cars that are just sitting there all day, pretty much. So, yeah. Wow. That definitely puts it in perspective. For sure.
[00:38:54] Dana Guernsey: Yeah. And I think, I guess one other thing just to talk about is I just also think we're at this inflection point of people caring about this.
Like it has become a dinner table topic in a way that it hasn't just over the last six to nine months, you know, I think it started with the election cycle. Certainly some of the infrastructure bill planning helps, but also just it's like climate crisis after climate crisis and grid blackout. After grid blackouts, people are busy.
I have friends who know nothing about.
Energy sector calling and asking you questions. Hey, like is what you do adjusting what's happening right now in Texas. And I'm getting into these conversations. And so it's also manifesting itself in terms of just the inbound of people who want to work on this. We were getting, we used to be concerned about competing for tech talent, you know, with like Google and Facebook and whoever.
And I think something like a third of our teams actually come from tech giant. If people are just increasingly motivated to put their tech skills to work, to do something meaningful and be very mission oriented. But just like being in this space in general has never been more. It's just, it's still, it's never felt like there was as much momentum as there is right now, at least for me.
[00:40:07] James Dice: That's awesome.
Well, thanks for painting this picture for us. I really appreciate it. Do we want to wrap up with two truths and a lie?
[00:40:14] Dana Guernsey: Sure thing I've been, I've been waiting for this moment to stump you Dan.
All right. Now I've put a lot of thought into it. Is it more likely that the person puts the lie the first, second, third, and that you should, you should track that data and let me know. Okay.
Okay. Okay. Okay. All right. So two shifts in the line. Here we go. So one, I own an electric vehicle too. I have driven on a NASCAR race track, and three, my house is entirely light.
[00:40:47] James Dice: I want to say the lie is the NASCAR race track, but I'm so uncertain. This is the most uncertain I've ever been.
[00:40:57] Dana Guernsey: I have driven on a NASCAR racetrack. we took our, our hybrid electric race car from. My graduate program and we, we raced it. And so I was the, it was the lightest on the team at the time being one of the only females. And so I got to drive it for an acceleration run. We went zero to 60 in four seconds.
It was, it was awesome.
[00:41:25] James Dice: You know, you told me enough about your background for me to have intuited that one. And so I'm kind of ashamed of, of my performance.
[00:41:35] Dana Guernsey: All right. Well, you going to try, what's the other, what's the lie now?
[00:41:37] James Dice: Your house is all electric.
[00:41:40] Dana Guernsey: Oh man. That's true too. My house is all electric. We converted we're all electric. But I don't own an Evie and I would really like to somewhere. Okay. All right.
[00:41:51] James Dice: That has been a, that has been a truth or a lie on the podcast before. I can't remember who that was, but uh, damn I have only missed once and the other one was.
What I feel like was a little bit of a cheap shot. You just went straight forward though. And I still, I still failed so well done.
[00:42:09] Dana Guernsey: Well done.
[00:42:11] James Dice: Well, thanks so much. This has been awesome. Getting to know you and voltage. Uh, Thanks for coming on the
[00:42:16] Dana Guernsey: show. Of course. Thanks for having me.
[00:42:23] James Dice: All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.
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