Are Microgrids Finally Ready for Prime Time? Viridity Makes its Case

When a lot of people think of microgrids, they think of self-sufficient communities.

Viridity Energy, among others, is trying to get you to think of them as more of a tool for solar and demand response.

The company--which raised an undisclosed second round from Intel Capital and Braemar Ventures--says its software exists to create "unified power assets" out of buildings and corporate campuses. The software essentially monitors power consumption and power production (in the case of renewable assets) within a given community (i.e. microgrids) and applies demand response rules and algorithms to conserve energy.

It then sells these power assets into the wholesale market. The utility is shielded from the underlying complexity and everyone is happy. The company has worked with Siemens on a number of projects, including one at Drexel University.

Last year, ABB, the electical equipment giant, bought Viridity competitor Ventyx for $1 billion. Other companies--such as demand response king EnerNoc and smart meter technology maker Silver Spring Networks--are building out energy management portfolios that will let them combine demand response and demand management with building control. Ultimately, it will be a seamless web.

From a practical perspective, microgrids and virtual power plants can be considered the same thing. In both cases, software is used to simplify a management headache by consolidating assets under a single roof. Microgrids, however, can represent a marketing challenge. It sounds like you are trying to bring power to one of those villages in Mad Max. Shifting the dialog to "unified power assets" or "virtual power plants" makes it easier to understand the possibilities. An aircraft carrier, a military base, a college campus, even a datacenter can be seen more easily as both part of a larger grid and something entirely distinct.

For Intel, Viridity potentially also represents another path to get into the market for processors for the grid. When Intel sticks to processors, it generally does well. When it tries to move into other markets, like the SpectraWatt fiasco, the results aren't so hot.