Swell Energy Receives $120M for Virtual Power Plant Expansion

January 06, 2023 by Stephanie Leonida

Swell Energy has won $120 million in new funds to continue supporting utilities and homeowners through the energy transition with virtual power plants.

Swell Energy has announced its win of $120 million in a funding round led by Greenbacker Development Opportunities Fund I, L.P. (GDEV) and SoftBank Vision Fund 2. An Ares Infrastructure Opportunities fund and Ontario Power Generation Pension Fund also participated in the funding round. Swell will use the newly won funds to build on its virtual power plant (VPP) programs.


Wind turbines.

Wind turbines. Image used courtesy of Pixabay


California-based Swell Energy provides energy management and smart grid solutions for homes and businesses. Swell’s Distributed Energy Resource Management System (DERMS) allows its customers to connect DERs to utilities, maximize DER value, and turn these resources into grid-edge power plants.


VPPs and Smart Energy Provision

VPPs aggregate DERs or decentralized power-generating units within a network. As seen for microgrids, these DERs can be wind farms, solar parks, energy storage systems, and combined heat-and-power units. 

Unlike microgrids, VPPs are integrated into the grid. Microgrids are usually off-grid but can be grid-connected. In this scenario, they are designed to be islanded (or disconnected from the grid) to work independently should the grid be out of action.

VPPs can be created using assets linked to any part of the grid. Microgrids are usually restricted to a specific geographical location, such as an island or town. Aggregation software is used to manage VPP operations, providing functions that mimic those of conventional power plant control rooms.

While microgrids are more geared toward end-user power supply, VPPs target wholesale markets with no specific regulation required. 

Through VPPs, Swell brings customers, utilities, and third-party service providers together. Swell uses its artificial intelligence (AI) and machine learning (ML)-driven software platform, GridAmp, to bring together and coordinate DERs. The interconnected network of energy assets can provide grid stability through flexible power management, potentially reduce grid operating costs, and help customers save on their energy bills.


Benefits of VPPs 

Through VPPs, GridAmp aims to co-optimize grid services for utility cooperatives, retail energy providers, investor-owned utilities, municipal utilities, community choice aggregation providers, and end-users. 

GridAmp incorporates weather forecasting, utility/market information concerning energy demand and value, customer device data (such as home energy meters), installer partner data, and device application program interface (API).



A house equipped with solar panels.

A house equipped with solar panels. Image used courtesy of Pixabay

Swell’s VPPs and GridAmp software are designed to help utilities manage transmission congestion and integrate renewable energy assets. VPPs serve as a demand response solution, balancing the electricity supply on the network by regulating energy loads during peak demand. Using VPPs can help utilities meet sustainability targets while continuing to meet consumer demand for low-carbon, low-cost, and reliable energy. 

By enabling flexibility in power provision to accommodate renewables, VPPs could help efforts concerning the decommissioning of fossil fuel infrastructure to make way for the energy transition.

Swell offers utilities a non-wires solution that uses cloud-connected technology to aggregate DERs, helping to reduce the unwanted burden on transmission and distribution systems and avoid or defer costly infrastructure upgrades.

To date, Swell’s total equity capitalization amounts to $152 million. This sum includes prior investments made by Aligned Climate Capital, an Ares Infrastructure Opportunities fund, Third Sphere, and others.