Samsung is betting that this emerging island can tame the grid with software and batteries

The electrical grid has changed more in the past decade than in the previous five decades. Solar, wind and batteries have pushed power generation away from monolithic producers. But fundamentally, the network still suffers from the same challenges.

“The problem with the grid is a peak problem. Most of the time you’re fine, you have plenty of power. But in those peak hours, you may not have enough power,” Michael Phelan, co-founder and CEO of GridBeyond, told TechCrunch.

Today, this shortage is acutely felt by technology companies and data center developers, who require large amounts of electricity to train and run AI models.

“But if you have enough energy stored in the battery or you have an industrial load that you can bring down — which is hundreds of megawatts — you can start building that hyperscaler,” Phelan said.

GridBeyond builds hardware and software to connect disparate parts of the grid together to act as larger virtual power plants. The startup already operates about 1 gigawatt of solar, battery, wind and hydropower, and on the demand side, it has “several gigawatts” across commercial and industrial facilities, Phelan said.

To expand its portfolio, GridBeyond recently raised a €12 million ($13.8 million) equity round led by Samsung Ventures, the company exclusively told TechCrunch. Other participating investors include ABB, Act Venture Capital, Alantra’s Energy Transition Fund, Constellation Technology Ventures, EDP, Energy Impact Partners, Enterprise Ireland, Klima, Mirova and Japanese electronics and software company Yokogawa.

The startup has installed device controllers in battery and renewable energy plants along with large commercial and industrial facilities in Australia, Ireland, Japan, Ireland, the UK and the US.

Like many virtual power plant companies, Dublin-based GridBeyond started on an island. When Ireland started adding wind power, “they had this problem where they were an island and they had to balance the grid. So it was very convenient for them to have things like flexible loads that they could bring to market,” Phelan said.

Grid operators have long asked heavy users to limit their power use during extreme heatwaves. For example, paying users generously reduces demand to the maximum extent. This practice is cheaper than building new transmission lines or power plants. This practice has expanded with the rise of renewable energy sources, allowing industrial and commercial customers to reduce usage at night or when the winds subside.

More recently, batteries have added a new dimension. GridBeyond operates several large energy storage facilities, including a 200 MW battery in California. The new source of flexible supply helps offset declines caused by renewable energy.

Batteries have another advantage: they are much quicker to respond to demand than traditional peaking power plants, which can take minutes to reach operating mode. This allows the company to quickly buy and sell energy in a form of arbitrage.

It also opens up new possibilities for data centers. Many data centers do not consume power continuously, but rather peak during AI training. These events can cause oscillations on the network. “You know the thing that led to the collapse of the Spanish network, which is what people don’t want,” Phelan said. Batteries in data centers can absorb much of this load, making it easier to place the facility on the grid so it doesn’t cause unwanted fluctuations.

By connecting them to a nearby virtual power station or using batteries installed on site, “obviously it’s easier for them to get connected,” he said.

Updated at 5:30 PM ET: The article has been updated to clarify that the investment came from Constellation’s venture arm, Constellation Technology Ventures.