AEP Launches the Latest Utility Contest for Cleantech Startups

American Electric Power launched the latest utility contest last
week for startups with technologies that could help solve its
various future grid challenges, with the potential for investment
and real-world deployments as the prize. 

Through April 7, AEP’s IlluminationLAB program is
taking applications from startups with solutions in four key
technology categories — customer experience, grid optimization,
electric mobility, and efficiency, operations and maintenance —
as well as a “wildcard” category for unexpected entries. 

From this pool of applicants, AEP will pick up to 20 teams to
attend a May “bootcamp” where they can work with AEP executives
“to define a clear use case for collaboration.” Teams will then
advance of a 10-week proof-of-concept program to build the test
case for its technology with some of the company’s top R&D
executives, where they “will access data, gather insights and aim
to test their products/services in live customer

The program will culminate with a demo day in September, where
companies will present their progress over the 10 weeks, and
present proposals for “future engagement with AEP.” While it
doesn’t specify what that engagement might look like, it does
include potential funding from AEP, as well as from L Marks, the
UK-based technology accelerator program advisor that’s organizing
the program. 

As a segment of the broader world of utility investment in
technology innovation, contests like AEP’s IlluminationLAB are a
a relatively tiny slice of the pie. On the early-stage investment
side of things,
energy startup incubators
abound, from broader public-private
partnerships such as Massachusetts’ Greentown Labs and Hawaii’s
Elemental Excelerator, to specifically utility-driven endeavors
like Enel’s
Innovation Hub
 or Shell’s
GameChanger Accelerator

At the larger scale, utilities are making investments and
acquisitions themselves, as with the rush of money from
European energy companies
into grid edge startups, or joining
forces to back startups that meet their future strategic needs, as
Energy Impact Partners
’ investment and credit funds. 

Utility contests have yielded some big opportunities for a
handful of startups. One noteworthy example is Virtual
, a Kentucky-based startup that was one of five to win
Vermont utility Green Mountain Power’s Inspire Space contest in
2016. Later that year, GMP picked Virtual Peaker’s software
to orchestrate
the distributed energy
 resources — Nest smart
thermostats, Tesla Powerwall residential batteries and smart water
heaters enabled by startup Aquanta — that it’s offering
customers to help manage local and system-wide grid needs. 

Elta Kolo, grid edge analyst with Wood Mackenzie Power &
Renewables, noted that contests like these are a good way for
startups to manage the particular challenges of doing business with
utilities, such as the longer-than-usual sales cycles and lengthy
rounds of testing needed before a promising technology can be
deployed at scale. As for the opportunities, “just look at

Shell’s strategy
of invest, and then acquire,” she

AEP has previous experience in the startup accelerator space as
co-sponsor of the Columbus Smart
City Accelerator
 in 2017, which provided winning companies
access to up to $100,000 in investment from venture capital firm
NCT Ventures. This effort was part of a broader push launched
in2016, when the city won a $40 million Department of
Transportation grant to develop a “model for connected cities of
the future,” along with a $10 million grant from Microsoft
co-founder Paul Allen’s Vulcan Inc. to “focus on
decarbonization of the energy and transportation sectors.” 

AEP Ohio is bringing its own
ratepayer-funded investments
to the Columbus Smart City
project. Last year, state utility regulators approved its plan to
spend $10 million on electric vehicle charging infrastructure
infrastructure rebates and support, as well as $10.5 million to
pursue microgrid projects with third parties. Late last year, AEP
Ohio picked EV charging network companies ChargePoint and Greenlots
as its EV infrastructure program partners, opening applications for
a program that’s expected to nearly
double the number of EV charging
 stations in Ohio, or about
300 Level 2 EV charging stations and at least 75 DC fast-charging

AEP picked electric mobility as one of its four areas of
interest for startups applying to IlluminationsLAB, noting that
it’s seeking “technologies that are increasing the adoption of
electric mobility by customers and reduce the costs for the
infrastructure needed to support this adoption.” On the grid
optimization front, it’s seeking technology that can “cheaply
control and/or shift energy peaks locally rather than across the
entire grid and in turn benefit our customers financially.”

The utility’s interest in “efficiency, operations and
management” startups is focused on “transferring traditional
processes into a digital world as much as possible,” as well as
tapping the opportunities to aggregate this more accurate data to
improve efficiency.

The contest’s rather vague guidance for startups with
“customer experience” innovations simply notes that most of
AEP’s communications with its customers are via bill and mobile
applications focused on energy consumption, billing and outage
information, and that it wants to be “more proactive to better
understand consumer behavior and provide personalized

Source: FS – GreenTech Media
AEP Launches the Latest Utility Contest for Cleantech Startups