Exclusive: Former watch trader is now building the AWS of grid storage, Terralayr
The startup's technology is a twist on the virtual power plant concept, in which batteries are aggregated and portions of the whole are sold off to various customers.
Philipp Man was burned out. He had founded a watch trading company with his flatmate, but the grind was wearing him down.
“We did that for ten years,” Man said. “It’s very difficult to keep yourself motivated when you know the whole reason for your operation is to sell expensive stuff to wealthy people.”
Revolutionizing the Energy Industry: The Rise of Terralayr
The energy industry is undergoing a significant transformation, driven by the increasing adoption of renewable energy sources and the need for more efficient and sustainable power management. Amidst this shift, a new startup, Terralayr, is poised to disrupt the traditional energy trading landscape.
Founded by a former jet fuel trader at Glencore, Terralayr is a virtual power plant that aggregates grid-scale energy storage assets, bundles them, and sells capacity to power providers. This innovative approach is designed to address the inefficiencies and high costs associated with traditional energy trading, creating a more sustainable and efficient future for the industry.
The Problem with Traditional Energy Trading
The traditional energy trading model is flawed, according to Terralayr's founder. "The industry, while still very nascent, has been built the wrong way around," he said. "Today, people build a battery, and then somebody else trades it." This approach creates inefficiencies and high costs for both battery owners and power providers. For instance, battery owners often struggle to find buyers for their excess capacity, leading to wasted energy and revenue. Meanwhile, power providers face the challenge of managing their output to meet demand, which can result in costly penalties for failing to match their forecast.
The Virtual Power Plant Solution
Terralayr's innovative approach is similar to Amazon's cloud service, AWS, which aggregates computing resources and sells fractions of them. Terralayr aggregates grid-scale energy storage assets, bundles them, and sells capacity to power providers. This allows battery owners to sell their capacity to the highest bidder, without having to manage the trading process themselves.
The startup's platform operates as an exchange, connecting battery owners with power providers, and charges a small percentage fee based on revenues. Additionally, Terralayr takes a portion of the upside if it can operate the battery more profitably than a competitor.
How it Works
Terralayr's platform operates as an exchange, connecting battery owners with power providers. The startup's algorithm matches excess capacity from battery owners with the demand from power providers, ensuring that energy is sold to the highest bidder. This approach eliminates the need for battery owners to manage the trading process themselves, reducing costs and increasing efficiency. For power providers, Terralayr's platform allows them to fill gaps in their output, avoiding costly penalties for failing to match their forecast.
Expansion Plans
Terralayr has already made significant progress, with seven megawatt-hours of capacity on the grid and another 40 megawatt-hours expected to be turned on soon. The startup has signed development agreements for over 200 sites in Germany, totaling over seven gigawatts, or about 3% of Germany's total generating capacity. Terralayr is also eyeing U.S. markets, particularly California and Texas, and has raised €77 million in funding to support its expansion.
A Generational Opportunity
Terralayr's founder believes that the company is poised to capitalize on a generational opportunity. "We believe this is a generational opportunity," he said. "The industry is changing rapidly, and we're well-positioned to take advantage of that change." With its innovative approach and strong funding, Terralayr is well on its way to revolutionizing the energy industry and creating a more sustainable and efficient future. As the energy landscape continues to evolve, Terralayr is poised to play a leading role in shaping the future of energy trading and management.
Article