A Seattle-based startup is taking some of the most talked-about technology applications — machine learning, high-frequency trading, and peer-to-peer selling — and applying them to retail energy markets.
The 15-person company, called Drift, is attempting to change electricity delivery in deregulated markets by connecting consumers directly to energy producers on a cryptographically-secure system (think blockchain), allowing it to granularly match a customer's environmental or cost preferences.
Drift is made up of engineers who've worked at Amazon, Google and Microsoft; a data scientist from Argonne National Laboratory; a head of marketing from Uber; and a former FERC attorney.
Greg Robinson, the co-founder and CEO, said the platform was designed to “ruthlessly lower costs in the supply chain” and provide a more customized experience for people looking for energy choice.
Robinson is the former CTO of Questar Energy Systems, where he developed software to control solar tracking systems.
After beta testing for the last couple months, Drift is officially launching in New York City as an energy services company. The startup is seeking out residential and small-commercial customers, while also working with generators to build out the supply side of its platform.
The customer side of the business is familiar. Drift acts like a competitive energy supplier in deregulated markets. The only difference is customization and frequency.
Drift delivers bills on a 7-day cycle, with detailed information on fees and sources of energy. Customers have their own web dashboard that allows them to track transactions and choose whether they want zero-carbon energy or lowest-cost energy. And they don't have the pressure of a contract.
“We have no contracts. They should not exist. We show customers what’s going on all the time. If they want to sign up on a Tuesday and leave on a Wednesday, they could. That would suck, but it means we didn’t do our job correctly,” said Robinson.
The back end of the system is more complicated.
Drift is building a network of power plants and distributed energy systems, and constructing a daily supply curve based on customer energy use and weather. “We're trying to match them more granularly than an Independent System Operator can do it.” said Robinson.
All transactions are tracked on a ledger similar to blockchain — although Drift is not currently using a public blockchain like other startups experimenting with peer-to-peer energy sales. (“If I were a marketer, I'd call this a blockchain,” said Robinson.)
Here's how the company describes the process once it has developed the supply curve: “It then turns to its network of peer-to-peer energy producers — ranging from iconic skyscrapers to hydroelectric dams and wind and solar farms — to procure power for consumers. In the event that demand outstrips supply, Drift uses high frequency trading to reduce or eliminate price spikes altogether.”
Robinson said the company can slash administrative fees by more than 10 percent through its unique aggregation method.
If those buzzwords aren't enough, here's how Drift is described on the website: “Think of us as the energy industry’s farm-to-table movement. We use better algorithms and automation to eliminate middlemen, fees and bureaucracy. And we always put you first. With Drift, you have more choice and control over your energy.”
The concept fits well in New York, where regulators are attempting to “platformize” the grid and create new opportunities for distributed energy companies to provide services. Drift is currently working with wholesale generators, but plans to expand the platform to behind-the-meter systems.
Drift has raised $2.1 million from a wide variety of investors, including First Round Capital, Lerer Hippeau Ventures, SV Angel, Joe Montana's Liquid 2 Ventures, Third Kind Venture Capital, Acequia Capital, Kal Vepuri, and Joshua Schachter.
Three years ago, David Crane penned a heartfelt letter to his shareholders about serving customers differently.
“There is no Amazon, Apple, Facebook or Google in the American energy industry today,” he lamented. He wanted NRG, a competitive energy supplier making a big play for retail customers, to become that company.
“The 'Big Four' offer their own product or service in a manner that is more comprehensive, seamless, intuitive and, in the case of Apple, visually elegant, than their respective competitors. They enable, they connect, they relate, they empower,” wrote Crane.
Shareholders never bought into that vision. But now Drift — a startup literally made up of product engineers from those companies — is trying to make it a reality.