Investing in Daylight
Energy is a collection of highly regulated monopolies in the US today, and one we believe is ripe for disruption. In recent years we’ve seen a secular shift towards broader deployment of distributed energy resources (DERs) like solar panels, batteries (often in a Tesla powerwall-like form factor), smart thermostats, and other connected devices. Energy utilities have little visibility into these resources and it can take days, sometimes even months, to aggregate the information. With grid management so dependent on the unknown state of distributed energy resources, there is a large untapped market for better information about connected devices at the edge of the grid.
DERs are often used to reduce load on the electrical grid, or even supply power to the grid, during times of peak demand. Their source is usually an individual household or business that has no clear incentive to provide that support when it’s needed. Solving this collective action problem could be invaluable for our energy grid.
Enter Daylight. Daylight is building a decentralized protocol that will allow developers to program the energy grid through distributed energy resources.
Daylight will initially begin by selling DER data to traditional energy companies seeking to better optimize the state of the grid. It plans to eventually enable anyone to build a virtual power plant, with access to information about DERs and the ability to control their deployment. A virtual power plant is an aggregate set of energy resources that acts as a source of energy for the grid. They are ideal for solving the collection action problem of individually owned DERs.
Imagine a home with a solar panel for generation, a battery used to charge an electric vehicle (the vehicle itself would also be considered a battery), and a smart thermostat. All those devices produce data, and Daylight’s protocol enables the homeowner to capture and sell it to traditional energy companies to better manage the grid.
That home could also store excess energy produced by the solar panel, discharge energy back to the grid in times of peak load, and respond to high load by changing the temperature setting on their thermostat. Many of these homes and buildings could be aggregated into a pool of energy resources and auctioned to a virtual power plant operator through Daylight’s decentralized marketplace. Instead of needing to pick a single centralized company to administer their energy assets, each home or business owner could delegate responsibility to whomever is paying the most, in real time. Likewise, anyone could purchase excess power from the Daylight-connected devices of their choice, creating a competitive market to provide lower-cost energy into the grid as a whole.
We first met Jason Badeaux, Daylight’s co-founder and CEO, several years ago. He had deep knowledge of the energy industry after years of investing in the space, and had become more interested in crypto. We’ve since spent countless hours together, and believe he’s one of the leading experts on decentralized network design for the physical world.
Jason is completed by co-founders Udit Patel and Evan Caron. Udit has a wealth of experience and expertise from helping operate NY’s grid, while Evan is a power trader by background, and has spent his recent career building and investing in bleeding edge energy innovation. We believe Jason, Udit, and Evan are ideally suited to modernize American energy infrastructure. They’re joined by a crack team of energy grid operators, smart contract engineers, and domain experts.
We’re thrilled to be partnering with Daylight and leading their Series A to build a better and more decentralized American energy grid!
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