The transition to more sustainable energy sources is a process that requires time and ongoing effort. Despite this, the chances of moving forward more quickly are increasing. The Swedish startup Greenely has identified one of these opportunities (not to be confused with the French Greenely carbon emissions monitoring company). It is currently finalizing a round of financing of Serie A for a total of 8 million euros with the aim of expanding its energy management platform to neighbouring Nordic countries.
The energy technology company serves approximately 200.000 households in its local area. It offers free energy usage analysis along with energy optimization services that enable customers to achieve savings on their electricity usage. For example, this includes more efficient charging of electric vehicles when the cost of energy is lower, as well as access to government incentives because Greenely can reduce energy demand on the grid by automatically optimizing (aggregating) customers’ energy demand.
Currently, these energy-enhancing services are only offered to customers who contract their energy supply with Greenely. However, the company plans to remove this condition as the new European regulations are implemented in its local market, which is expected to happen before the end of the year.
The startup also offers its energy customers the option of installing a home battery (currently marketed by Pixii Home) in order to store energy for later use. This alternative allows households to adapt to variations in wholesale electricity prices and optimally manage when they turn to the grid to reduce their energy costs.
Greenely's platform has been developed to integrate and manage energy consumption in homes equipped with solar systems and heat pumps. For example, users with home batteries and solar panels installed have the possibility of trading surplus energy when the price of electricity is high, and storing it when it is cheaper, for later use or sale.
Paying customers receive a dynamic electricity rate with hourly pricing and the opportunity to use what Greenely calls its “virtual residential power plant” (VPP) technology. This system allows customers to participate in balancing the electric grid, thereby contributing to its stability and unlocking opportunities to generate revenue through government payments.
“We make sure that our customers save a lot of money,” says CEO and co-founder Tanmoy Bari. “Using our platform and virtual power plant technology, consumers can generate revenue in innovative ways.”
“We incorporate all of these elements on a broad scale in order to access these frequency markets and ultimately stabilize the national grid. This leads to the government reimbursing us for the funds, which are also passed on to consumers. In this way, consumers can realize significant savings, while at the same time being able to generate income through our platform today.”
According to Bari, the average savings in energy consumption is 250 euros per customer per year, although he stresses that this figure represents an average value. A household using an electric vehicle could save up to 400 euros per year thanks to the platform's ability to optimise charging.
For customers using battery storage, there is an opportunity to generate revenue by working with Greenely to help balance energy demand on the grid. According to Bari, if the VPP technology had been fully operational by 2023, users could have received more than €3.000 in compensation payments last year. It is important to consider the price of the battery, although it is estimated that a household would recoup the investment in a home battery within “two to three years.”
Developing an energy platform
Greenely has not always been involved in this energy-efficient industry. The company was established nearly ten years ago with the initial intention of providing a tool for energy service companies to improve customer satisfaction. However, over time, the team identified the possibility of developing “the consumer experience for the energy consumer of the future,” as Bari put it, which meant that Greenely would evolve into an energy provider.
Today, the new company’s approach somewhat resembles that of companies such as Octopus Energy in the UK or, in its own country, digital energy startup Tibber. However, Greenely’s aim is to go beyond competing directly as an energy provider. It aims to become an “energy platform” layer that customers of other providers can also use to achieve savings and earn additional revenue on top of the services they receive.
Unbundling the service in this way could give Greenely the opportunity to establish itself as a more autonomous agent, operating on behalf of customers to lower their energy costs and help them generate revenue. As an electricity provider, the company could increase its profits when customers' bills are higher.
It also provides a way for the startup to expand, increase its influence on energy management and demand, and possibly help accelerate the decarbonisation process in Europe by facilitating the implementation of incentives for households to fulfil their role.
“We don’t identify ourselves as an energy provider,” Bari emphasizes. “We see ourselves as an energy platform.”
“We are working on developing the optimal experience for consumers and have made significant progress towards that goal. We consider our proposition to be the most innovative on the market and we are working on expanding it to other markets.”
“We have not seen anyone else take this action,” he says of the VPP strategy. “We have been preparing our service for this for a long period of time, as we believe that energy provision is a significant revenue model today. However, we believe that there are several additional opportunities that we can explore. Our main goal is to reach as many consumers as possible and to establish the largest virtual power plant in Europe, which requires the participation of a large number of consumers on a platform. Therefore, we do not want to limit ourselves to just having customers using our energy service.”
According to Bari, the new funding will enable Greenely to extend its platform to homeowners in Finland and Norway as a first step in its international expansion, taking advantage of a unified market for frequency balancing services in those countries.
In addition, the company is also considering other European markets where smart meters have been well received, such as France and the UK. While Bari mentions that the startup can adapt to regulatory variations in the management of energy markets in Europe, he stresses that the presence of smart meters is critical to the success of its approach. Therefore, a market such as Germany, with a low adoption of smart meters, is not contemplated in its current planning.
“The goal is to establish the largest residential virtual power plant in Europe and offer it to consumers,” he explains. “It is a logical step, given that electricity is a basic necessity for everyone. Therefore, the market, like other markets, is quite large and can reach many consumers. We are currently continuing to add customers in Sweden, where there are more than 2 million single-family homes and more than 4 million households.”
The markets are very large in the Nordic countries, but the goal is to be the main player in Europe.
Greenely’s Series A funding was led by Belgian investment firm Korys, with participation from existing investor Luminar Ventures and other existing shareholders. Greenely has so far raised approximately €15 million, including this latest round and a €2,5 million seed funding round in 2019.
In a joint statement on the Series A funding, Brieuc de Hults, Chief Investment Officer at Korys, and Quentin Dupont, Investment Manager, said: “Greenely is an exceptional company, intent on transforming the way households consume electricity and positively contributing to a net-zero future, representing the type of impact company we want to support. We are pleased to partner with Tanmoy and the team on this exciting next stage for Greenely and support their geographic and product expansion.”
