The Great Energy Coordination Problem

Today, we are proud to announce a $12M round in Fuse. Fuse is a core contributor to Project Zero, a renewable energy DePIN designed to solve the great energy coordination problem.

Fuse is a full-stack renewable energy company built by Alan Chang and Charles Orr, who were both early employees at Revolut. Alan and Charles were pivotal to the early growth of Revolut, and set their sights on solving the energy crisis in 2022. Over the past few years, Fuse has built the tech-enabled energy company of the modern age: building robust data and engineering systems with a goal to service customers at superior cost and efficiency compared to status quo three-letter utilities behemoths.

At the moment, Fuse operates utility-scale solar and wind plants, a Distributed Energy Resource (DER) installation business, and services tens of thousands of households in the UK as a regulated supplier of electricity.

But this isn’t enough. In order to meet the world’s rising demand for energy, we need to add 4,000 terawatt-hours of generation capacity every year for the next decade—which is roughly equivalent to building the entire U.S. power grid from scratch annually. An additional $4 trillion of annual investment is needed through 2030 for grid modernization, storage, and transmission infrastructure—which is more than the GDP of Germany or Japan each year.

The problem gets even worse when you layer in geopolitical complexities: thousands of jurisdictions, mountains of red tape and regulatory bodies, and a sea of market players, each with their own incentives and constraints. We’re staring down the barrel of a massive energy problem in the decade ahead. A fresh approach is needed, and that’s where Project Zero comes in.

Project Zero is a renewable energy DePIN designed to accelerate the expansion and utilization of Decentralized Energy Resources (DERs) by rewarding network participants for shifting demand to renewable hours, supporting e-mobility utilization, and generating new capacity via solar panels or batteries.

Energy generation and coordination is one of the biggest opportunities of our lifetime, and it won’t be solved only through traditional rails or structures. While running Fuse, Alan and Charles realized that crypto-enabled capital formation mechanisms are critical to the path forward. Project Zero is precisely that: the incentive layer that acts as a substrate for coordination across the most fragmented portions of the energy value chain.

The Fragmented Energy Stack

The prevailing trend in the energy sector is one of horizontal aggregation within specific segments—such as generation, transmission, or retail—rather than vertical integration across the value chain.

Installers like Trinity focus on the deployment of Distributed Energy Resources (DERs) but do not engage in direct energy retail operations. Conversely, retail energy providers such as NRG Energy typically do not offer DER installation services unless these are bundled with conventional power generation. Vistra Corp — a major U.S. power generator with a diverse asset base that includes natural gas, coal, nuclear, and solar — operates several retail brands, such as TXU Energy, Ambit Energy, and Dynegy, but suffers from suboptimal utilization in coordinating supply and demand across its generation portfolio. Each of these entities operates largely independently, limiting their ability to achieve maximum operational returns to scale.

These inefficiencies are particularly acute. Inconsistent data formats and incomplete consumption telemetry get in the way of real-time monitoring and demand forecasting for grid operators. Fragmented licensing frameworks across jurisdictions prevent scale economies for renewable resource installers and services operations. Information silos prevent proper pricing and risk management for retailers.

Fuse is approaching the retail energy supply chain from first principles and intentionally operating at each layer of the stack to minimize the efficiency loss between each step in the generation to distribution lifecycle. They are hyper-focused on the mission of providing cheap, clean energy at mass scale, and working backwards to that end.

In the immediate future, this means going after two specific problems:

1. Consumer Transition Inertia — How do we encourage people around the world to change their consumption patterns to more effectively load balance the grid as part of demand response programs, and further adopt residential renewable products and DERs (i.e., electric vehicle (EV) chargers, batteries, solar inverters, heat pumps, smart thermostats)?
2. The Retail Energy Distribution Standards Problem — How do we bridge the disjointed processes between retail energy providers, grid operators, virtual power plants, and DER installation service providers that have historically made it difficult to produce economies of scale via geographic expansion in the retail energy business?

Project Zero complements Fuse’s vertically-integrated strategy by serving as an incentive layer for consumers to opportunistically shift energy consumption and build out net new renewable capacity.

Aggregating Energy Assets at Scale

Fuse wants to turn homeowners into conscious, active participants in their energy choices.

The planet needs engaged, responsive consumers of its resources — not ones who think of energy usage as a line item on a monthly bill. Fuse accelerates this shift by building delightful consumer energy experiences, while mediating the distribution of Project Zero incentives, to influence consumption patterns and encourage new capacity installation.

As an energy retailer with a direct relationship to the customer, Fuse is structurally well positioned to capture and distribute the value created from solving some of the hardest coordination problems in the space: facilitating Demand Response Programs (DRPs), running VPPs, building low-latency metering systems, and spearheading new interoperable data standards.

Demand Response Programs

Fuse can capture the underutilized potential of DRPs by modulating energy consumption at the edge in dynamic response to grid conditions. Despite the ability of DRPs to reduce peak electricity demand by 20%, the overwhelming majority of eligible households globally do not participate in these programs. This represents millions of kWh that could be shifted or reduced during peak periods, massively lowering operational costs.

When electricity demand is high or there is a shortfall in supply, Project Zero can distribute token incentives - and not just discounts - to owners of energy resources in-network (smart appliances, water heaters, thermostats, combined heat-and-power systems, solar panels, batteries) to reduce or shift their consumption. This capacity to balance allows Fuse to stabilize the grid, bringing supply and demand sides in line with each other at critical times.

Source: NYC DCAS

These consumption shifts can facilitate gains of upwards of $3,000 per megawatt-hour of reduced demand per household. At scale, a portion of the proceeds of these programs can be distributed back to consumers in the form of token incentives which can be used to lower energy bills, or be traded directly for immediate rewards.

As an increasing number of households opt-in to dynamic consumption shifting via Project Zero protocol incentives, Fuse can make substantial bids in DRP events. This allows Fuse to offer a larger, more predictable load reduction or shifting capacity, which we believe utilities and grid operators are willing to pay a premium for.

Virtual Power Plants

DER installers (solar panels, battery storage, EVs, smart appliances) often fail to collaborate with energy retailers on the optimal sizing and configuration of systems for homeowners. Not only does this lead to a lower DER penetration rate in markets where it is desperately needed, the systems are often disjointed from the overall grid entirely.

In Fuse’s vision of the world, Zero incentivizes the buildout of new renewables capacity across households, and ensures that the net new resources are being used as efficiently as possible. This allows Fuse to act as its own VPP, combining all DERs into a single, flexible entity that can provide valuable grid services.

When the grid faces high demand or supply shortages, Fuse instructs DERs to either increase energy production or discharge stored electricity (e.g., solar and battery storage systems in a VPP can discharge or absorb electricity quickly to help maintain grid frequency within a narrow range, or smart thermostats and water heaters can be temporarily shut off or adjusted to provide demand-side response).

As a VPP, Fuse participates in the wholesale energy markets, aggregating its DER footprint in local markets to bid in larger, more predictable size than as a pure energy retailer. Fuse can also offer services like voltage support, which are critical for grid stability. These services can generate significant revenue, often up to $100,000 per megawatt capacity per year.

By enhancing the reliability of these services through advanced metering and enrichment-based analytics, we expect Fuse to secure more favorable contracts and higher payments from grid operators. The intention would then be that the proceeds from these open market operations filter back to users contributing their assets to the network.

Advanced Metering and Real-Time Data

A persistent problem for energy generators and retailers is the lack of real-time data on plant outages, demand fluctuations, and other factors that directly impact energy production. Without this data, pricing energy correctly and profitably becomes a major challenge.

Fuse bridges this gap by utilizing its direct relationship with consumers to gather stochastic, minute-by-minute data. This real-time information feeds into Fuse's advanced billing engine, informing all pricing decisions which we believe will enable the company to participate in wholesale markets with superior profitability. This means cheaper, cleaner energy for every market the network serves.

With its expanding customer footprint and clear line of sight into the grids that service them, we believe Fuse is better positioned than most to participate profitably in energy markets, and as a result assist others along the way.

Constructing Open Protocols

At scale, Project Zero is an open platform that provides visibility into all energy resources generated and consumed, that any party in the energy value chain can permissionlessly access.

As Fuse accumulates an increasing set of energy assets at the edge, Project Zero begins to serve as a powerful, credibly neutral protocol layer. This is the first order correct approach to building global energy systems for the 21st century: accessible energy resources connected via a consistent, interoperable data standard on top of which anyone can build products and services.

The Path To Energy Abundance

Fuse’s unfair advantage against the giants in the space lies in tactically removing the cogs in the machine via crypto coordination primitives. This approach should more effectively acquire and engage users in a closed-loop generation and distribution process, priming Fuse to become a novel global energy retailer: one that not only trades power more profitably through asymmetric data and systems improvements, but also incentivizes renewables adoption and ultimately rewards its customers at each step of the process.

Alan and Charles have deep operating expertise in regulated, consumer facing environments. The Fuse team is a collection of customer obsessed builders and market operators, singularly focused on solving the most pressing energy problems of our age.

In gradual steps, Fuse seeds Project Zero as its first core contributor in building an open, shared platform, and brings us one step closer to energy too cheap to meter. To learn more, visit www.zero2050.com.