Author: Shayon Sengupta & Tushar Jain
Compiled by: TechFlow
Today, we are excited to announce that Fuse, a core contributor to Project Zero, a renewable energy DePIN designed to solve major energy coordination problems, has closed a $12 million funding round.
Fuse was founded by Alan Chang and Charles Orr, who were early employees of Revolut and made important contributions to its early development. In 2022, they set their sights on solving the energy crisis. In recent years, Fuse has built a modern technology-driven energy company, built a powerful data and engineering system, and aims to serve customers more cost-effectively, surpassing the existing three major utility giants.
Currently, Fuse operates large-scale solar and wind power plants and is engaged in the installation of distributed energy resources (DERs), serving tens of thousands of homes as an electricity supplier in the United Kingdom.
Yet this is still not enough to meet the challenge. To meet the world’s growing energy needs, we will need to add 4,000 terawatt hours of new generating capacity every year over the next decade—the equivalent of rebuilding the entire U.S. electric grid every year. In addition, an additional $4 trillion will be needed each year through 2030 for grid modernization, storage, and transmission infrastructure—more than the annual GDP of Germany or Japan.
The problem is compounded by geopolitical complexity: thousands of jurisdictions, cumbersome regulations and regulators, and a multitude of market participants, each with different incentives and constraints. The energy challenges we face over the next decade require a radical new approach, and that’s where Project Zero comes in.
Project Zero is a renewable energy DePIN that aims to accelerate the expansion and utilization of distributed energy resources (DERs) by rewarding network participants for shifting demand during renewable energy hours, supporting the use of electric mobility, and adding new capacity through solar panels or batteries.
The generation and coordination of energy is one of the biggest opportunities of our lifetime, but it cannot be solved by traditional means alone. While running Fuse, Alan and Charles realized that capital formation using crypto is key to future growth. Project Zero is just that: an incentive layer that provides the foundation for coordinating the most fragmented parts of the energy value chain.
Decentralization trend in the energy industry
The current trend in the energy industry is towards horizontal integration within specific areas, such as generation, transmission or retail, rather than vertical integration across the entire value chain.
Installers like Trinity focus on the deployment of distributed energy resources (DERs) but do not directly engage in the retail energy business. Conversely, retail energy providers such as NRG Energy do not typically offer DER installation services unless those services are combined with traditional power generation. Vistra Corp, a major U.S. power producer with diversified assets covering natural gas, coal, nuclear and solar, and operates multiple retail brands such as TXU Energy, Ambit Energy and Dynegy, is not efficient in coordinating supply and demand across its generation portfolio. Most of these companies operate independently, limiting their ability to achieve the greatest scale benefits.
These inefficiencies are particularly acute. Inconsistent data formats and incomplete consumption data make it difficult for grid operators to conduct real-time monitoring and demand forecasting. Fragmented licensing frameworks across jurisdictions hinder the scale-up of renewable resource installers and service operations. Information silos hamper retailers’ ability to price and manage risk.
Fuse is rethinking the retail energy supply chain from first principles and intentionally operating at every step of the supply chain to minimize efficiency losses at every stage of the life cycle from generation to distribution. They are focused on their mission to deliver affordable, clean energy at scale and are working backwards to achieve this goal.
In the near term, this means addressing two specific issues:
Inertia of consumer transformation – How can we encourage global consumers to change their consumption habits to more effectively balance grid loads in demand response programs and further adopt household renewable products and distributed energy resources (DERs) such as electric vehicle (EV) chargers, batteries, solar inverters, heat pumps, and smart thermostats?
The Retail Energy Distribution Standards Problem – How do we integrate the fragmented processes among retail energy providers, grid operators, virtual power plants, and DER installation service providers that have historically made it difficult to achieve economies of scale in the retail energy business through geographic expansion?
Project Zero complements Fuse’s vertical integration strategy by serving as an incentive layer, helping consumers flex their energy consumption and developing new renewable energy capacity.
Large-scale integration of energy assets
Fuse wants to transform homeowners into conscious, active participants in their energy choices. The planet needs consumers who are proactive about their resource use, not those who simply see energy use as an item on their monthly bill. Fuse accelerates this transformation by creating a delightful consumer energy experience and managing the distribution of Project Zero incentives to influence consumption patterns and encourage the installation of new capacity.
As a direct-to-customer energy retailer, Fuse is structurally positioned to capture and distribute the value created by solving some of the most complex coordination problems in the sector: such as facilitating Demand Response Programs (DRPs), operating Virtual Power Plants (VPPs), building low-latency metering systems, and leading new interoperability data standards.
Demand Response Programs (DRPs)
Fuse unlocks the full potential of demand response programs by dynamically adjusting energy consumption at the edge of the grid. Although DRPs can reduce peak electricity demand by 20%, the majority of eligible households around the world do not participate in these programs. This means that millions of kilowatt-hours of electricity can be shifted or reduced during peak periods, significantly reducing operating costs.
When electricity demand is high or supply is low, Project Zero can provide token incentives, not just discounts, to owners of energy resources in the network (such as smart appliances, water heaters, thermostats, combined heat and power systems, solar panels, and batteries) to reduce or shift their electricity use. This balancing ability allows Fuse to stabilize the grid at critical moments, aligning supply and demand.
Source: NYC DCAS
These shifts in consumption patterns could help each household gain more than $3,000 for every megawatt-hour of demand reduction. At scale, a portion of the benefits of these programs could be returned to consumers through token incentives that can be used to reduce energy bills or redeemed directly for instant rewards.
As more households choose to dynamically adjust their electricity usage through incentives from the Project Zero protocol, Fuse will be able to make more competitive bids in Demand Response Programs (DRPs). This allows Fuse to provide greater and more predictable load reduction or shifting capabilities, which we believe utilities and grid operators are willing to pay a premium for.
Virtual Power Plant (VPP)
Installers of distributed energy resources (DERs) such as solar panels, battery storage, electric vehicles and smart appliances often fail to work with energy retailers to provide the best system size and configuration for households. This not only results in low penetration of DERs in markets where they are needed most, but these systems are often disconnected from the overall grid.
In Fuse's vision, Zero provides incentives for households to add new renewable energy capacity and ensures that these new resources are used efficiently. This enables Fuse to operate as a virtual power plant, integrating all distributed energy resources into a single flexible entity, thereby providing valuable services to the grid.
When the grid faces high demand or low supply, Fuse instructs distributed energy resources (DERs) to increase energy production or release stored power. For example, solar and battery storage systems in virtual power plants can quickly release or absorb power to help maintain grid frequency within a narrow range; while smart thermostats and water heaters can temporarily shut down or adjust in response to changes in demand.
As a virtual power plant, Fuse participates in wholesale energy markets, aggregating its DER footprint in local markets to bid at a larger and more predictable scale, rather than acting as a pure energy retailer. Fuse can also provide services such as voltage support, which is critical to the stability of the grid. These services can generate significant revenue, typically up to $100,000 per megawatt of capacity per year.
By enhancing the reliability of these services, with the help of advanced metering technology and a rich analytics-based approach, we expect Fuse to be able to obtain more favorable contracts and higher remuneration from grid operators. Ultimately, the benefits of these open market operations will be passed back to the users who contribute assets to the network.
Advanced metering and real-time data
An ongoing problem facing energy producers and retailers is the lack of real-time data on power plant failures, demand fluctuations, and other factors that directly impact energy production. This makes accurately and profitably pricing energy a major challenge.
Fuse fills this gap by building direct relationships with consumers and collecting random, minute-by-minute data. This real-time information is fed into Fuse's advanced billing engine, which powers all pricing decisions. We believe this will enable the company to achieve higher profitability and participate in wholesale markets. This means cheaper, cleaner energy in every market covered by the network.
With an expanding customer base and clear visibility into the grid that serves them, we believe Fuse is better positioned than most to profitably participate in the energy market, and therefore be able to help other players in the process.
Building an open protocol
Operating at scale, Project Zero is an open platform that provides transparency into all generated and consumed energy resources, without permissioned access by any party in the energy value chain.
As Fuse accumulates more and more energy assets at the edge, Project Zero begins to function as a strong and trusted neutral layer. This is the right way to build a global energy system for the 21st century: connecting accessible energy resources through consistent, interoperable data standards that anyone can build products and services on top of.
The Path to Energy Abundance
Fuse’s unfair advantage over industry giants is in tactically removing friction from the machine through cryptographic coordination primitives. This approach should more effectively acquire and engage users in the closed-loop generation and distribution process, positioning Fuse to become a new kind of global energy retailer: one that not only trades electricity more profitably through asymmetric data and system improvements, but also incentivizes renewable energy adoption and ultimately rewards its customers at every step.
Alan and Charles have deep operating experience in regulated consumer environments. The Fuse team is a group of customer-driven builders and market operators focused on solving the most pressing energy issues of our time.
Fuse is nurturing Project Zero as its first core contributor to build an open and shared platform and bring us closer to energy that is “too cheap to meter.” For more information, visit www.zero2050.com.
