Electricity companies back startups that can squeeze more power through the grid

Energy utilities are ramping up their investments in technologies that can squeeze more performance out of the electricity grid, as power connectivity becomes an increasingly big bottleneck in the energy transition.

“The biggest challenge with renewables today is interconnection to the grid,” says Pradeep Tagare, head of National Grid Partners, the corporate venturing arm of UK-based energy system operator and utility National Grid. “In some regions of the US, it can easily take a few years for a renewable project to be connected to the grid.”

As governments set targets for decarbonising electricity systems, startup investments and R&D projects are happening behind the scenes to alleviate the hold-ups.

Technologies that increase the capacity of existing transmission lines, for example, are a focus for electricity providers. These near-term solutions for improving grid efficiency help companies skirt the high costs of building new transmission lines and distribution – lines that carry electricity at low voltage to consumers. It also gets around the long time it takes to permit and then build new infrastructure, which can take decades.

One of National Grid Partners’ investments is in Line Vision, a provider of power line sensor technology that can increase the capacity of existing transmission lines by up to 40%.

National Grid, which also operates on the US east coast, has deployed the technology in New York and is looking at doing the same in the UK. “We can actually increase the capacity on existing lines by 20% to 30%,” says Tagare. “Twenty percent to 30% is not going to solve the problem but it is a step in the right direction,” he says.

The CVC has also invested in Total Solution Conductor, a startup that replaces old materials in high-voltage transmission lines with next-generation superconductors that double transmission lines’ capacity without the need to retrofit towers or other infrastructure.  

“It is very promising because it can solve the immediate term, one-to-five year problems with a 2X or a 3X capacity increase,” says Tagare.

EDP Ventures, the CVC arm of the Portugal-based utility, is also looking at investments in technologies that can optimise the existing grid infrastructure to increase loads on the system. It invested in US startup, Splight, for example, that uses artificial intelligence to reduce bottlenecks in transmission capacity and allow more renewable energy generation on the grid. The startup raised $12m in a seed funding round in July 2024.   

“If you start digitalising the grid more and more, sensing with software, you start having a more real time view of the grid. Only that allows you to decrease the curtailment requirements that the system operator from time to time issues,” says Frederico Goncalves, head of EDP’s investment arm.  

Goncalves acknowledges that technologies to optimise the existing grid are only a short-term solution. As more renewable generation comes onto the electricity system, it means all kinds of investment will be needed in new infrastructure.  

The UK is in particular need of grid upgrades to meet the government’s target of generating 95% of electricity from clean energy sources by 2030. The government’s Climate Change Committee says the UK needs five times the amount of solar it has today by 2030, four times the amount of offshore wind and two times the amount of onshore wind to meet its goal.  

The government plans to accelerate planning and consenting for connecting renewable energy to the grid. This includes the build-out of underground transmission lines that can be more easily consented than overground ones, which often face opposition from communities living near where the transmission lines are planned.

The case for digital twins

The UK is particularly hampered by transmission bottlenecks as most of the clean energy projects coming from offshore wind is built in Scotland in the north of the UK while most of the energy is needed in the south where electricity use is highest.

Because of the large number of connections and renewable energy development, technologies that allow developers to understand how the grid will look when their projects are ready to connect are critical, says Bethany Foster, energy systems innovation lead at Innovate UK, the country’s national innovation agency, which researches and tests grid technologies to meet clean energy goals.

“There are a lot of complex flexibility programmes which require a lot of real time visibility. An innovator can’t come into the energy landscape if they don’t understand where the new supply and demand centres are going to be and where the constraints are,” she says.  

These kind of spatial planning tools, which include digital twin technologies that provide a virtual replica of a physical system now and in the future, are going to be “very valuable for the future planning and consent processes,” says Foster.

Innovate UK has funded a project called Phased Switch System, a technology that seeks to integrate new offshore wind energy without causing grid imbalances. It has also funded a project called REACT, led by Scottish and Southern Electricity Networks, an electricity distribution network, which creates an interactive geospatial map of the transmission lines in Scotland to allow developers to see where they can potentially connect to the grid.

A large amount of intermittent renewable energy increases the need for so-called ancillary services that can dispatch power when there is little wind or sun. Clean dispatchable technologies that the government is looking at include hydrogen and renewable gases and fuels generated from carbon capture, utilisation and storage technology.

“Renewable gases give us an opportunity to clean up some of the demand for natural gas whilst we continue to accelerate connections. Not everyone is going to be able to electrify straight away, but they can at least reduce some of their carbon emissions in the meantime,” says Foster.

All types of battery storage is needed

Battery storage technologies will be integral to balancing an electricity grid increasingly reliant on intermittent renewable energy. Foster says all types of battery storage must be developed including gaseous storage of hydrogen, low-carbon renewable gases and biogases.

Investors and innovators should be looking at the specific needs of customers for battery technologies because countries like the UK have a diverse customer and generation profile, says Foster.

“Customer needs are going to differ in every location depending on what utilities they have access to, the ease of electrification, the ease of getting new connections and whether they can connect to batteries or hydrogen generation facility,” says Foster.

10 years out

Energy companies are also looking at longer-term technology solutions that will require an overhaul of the electricity grid system. These include superconducting transmission line technology that will be critical for connecting AI data centres, for example. Quantum computing can play a role in modelling scenarios for protecting mission critical assets. And AI technology is being tested for automating planning documents to streamline the review and permitting process.  

National Grid is working with startup VEIR, for example, to evaluate superconductor technology for upgrading grids. The company claims its next-generation superconducting transmission lines can deliver up to 10 times more power than conventional lines at the same voltage level.    

While VEIR’s technology could be deployed in the near term for specific uses such as connecting a data centre that needs high capacity lines, it is a technology that is further out, says Tagare.

“It requires a complete overhaul of the existing infrastructure, and that is going to take a long time,” says Tagare.