Fuse is re-examining the retail energy supply chain from first principles to minimize efficiency losses at every stage of the generation-to-distribution lifecycle.
Author: Shayon Sengupta & Tushar Jain
Translation: DeepTechFlow
Today, we are excited to announce that Fuse has completed a $12 million financing round. Fuse is a core contributor to Project Zero, a renewable energy DePIN aimed at addressing significant energy coordination issues.
Founded by Alan Chang and Charles Orr, who were early employees at Revolut and made significant contributions to its early development. In 2022, they turned their attention to solving the energy crisis. In recent years, Fuse has built a modern, technology-driven energy company, with a strong data and engineering system aimed at providing services to customers at a higher cost efficiency, surpassing the existing three major utility giants.
Currently, Fuse operates large solar and wind power plants and is involved in the installation of distributed energy resources (DERs) as an electricity supplier in the UK, providing power services to tens of thousands of households.
However, this is still not enough to meet the challenge. To meet the continuously growing global energy demand, we will need to add 4,000 terawatt-hours of generating capacity annually over the next decade – equivalent to rebuilding an entire US grid every year. In addition, by 2030, an additional $21 trillion investment will be required annually for grid modernization, storage, and transmission infrastructure, exceeding the annual GDP of Germany or Japan.
The complexity of geopolitics makes the problem even more severe: thousands of jurisdictions, complex regulations and regulatory bodies, and numerous market participants, each with different incentives and constraints. We are facing enormous energy challenges in the next decade, requiring a completely new solution, and this is where Project Zero comes in.
Project Zero is a renewable energy DePIN designed to accelerate the expansion and utilization of distributed energy resources (DERs) by rewarding network participants for shifting demand to renewable energy periods, supporting the use of electric vehicles, and adding new capacity through solar panels or batteries.
Energy production and coordination represent one of the greatest opportunities in our lifetime, but cannot be solved by traditional means alone. In operating Fuse, Alan and Charles realized that capital formation using encryption technology is key to future development. Project Zero is such an innovation: it serves as an incentive layer, providing a foundation for the most decentralized parts of the energy value chain.
Decentralization Trend in the Energy Industry
The current trend in the energy industry is horizontal integration in specific areas such as generation, transmission, or retail, rather than vertical integration across the entire value chain.
Installation companies like Trinity focus on the deployment of distributed energy resources (DERs) but do not directly engage in energy retail business. Conversely, retail energy suppliers such as NRG Energy typically do not provide DER installation services unless these services are combined with traditional power production. Vistra Corp is a major US power producer with diversified assets covering natural gas, coal, nuclear, and solar, operating multiple retail brands such as TXU Energy, Ambit Energy, and Dynegy, but its efficiency in supply-demand coordination in its generation portfolio is not high. These companies mostly operate independently, limiting their ability to achieve maximum scale benefits.
These inefficiencies are particularly severe. Inconsistent data formats and incomplete consumption data make it difficult for grid operators to conduct real-time monitoring and demand forecasting. Distributed licensing frameworks in different jurisdictions hinder the scalable development of renewable resource installers and service operators. Information silos impede rational pricing and risk management for retailers.
Fuse is re-examining the retail energy supply chain from first principles and intends to operate at every stage of the supply chain to minimize efficiency losses at every stage of the generation-to-distribution lifecycle. They are focused on the mission of providing large-scale, affordable, clean energy and are working to reverse-plan to achieve this goal.
In the near term, this means addressing two specific issues:
Inertia in Consumer Transformation – How do we encourage global consumers to change their consumption habits to more effectively achieve grid load balancing in demand response programs and further adopt home renewable products and distributed energy resources (DERs) such as electric vehicle (EV) chargers, batteries, solar inverters, heat pumps, and smart thermostats?
Retail Energy Distribution Standardization Issue – How do we integrate the dispersed processes between retail energy suppliers, grid operators, virtual power plants, and DER installation service providers, which have made achieving economies of scale through geographic expansion difficult in the retail energy business?
Project Zero complements Fuse's vertical integration strategy by serving as an incentive layer, helping consumers to flexibly adjust energy consumption and develop new renewable energy capacity.
Large-Scale Integration of Energy Assets
Fuse aims to transform homeowners into conscious and active participants in energy choices. What the planet needs are consumers who actively respond to resource usage, rather than those who simply treat energy consumption as a monthly bill item. By creating a delightful consumer energy experience and managing the allocation of incentives for Project Zero, Fuse accelerates this transformation, influencing consumption patterns and encouraging the installation of new capacity.
As a direct-to-consumer energy retailer, Fuse has a structural advantage to capture and allocate the value created by solving some of the most complex coordination issues in the field, such as promoting Demand Response Programs (DRPs), operating Virtual Power Plants (VPPs), establishing low-latency metering systems, and leading new interoperability data standards.
Demand Response Programs (DRPs)
Fuse fully taps into the potential of Demand Response Programs by dynamically adjusting energy consumption at the edge of the grid. Although DRPs can reduce peak power demand by 20%, most eligible households globally do not participate in these programs. This means that hundreds of megawatt-hours of power can be shifted or reduced during peak periods, significantly lowering operational costs.
When power demand surges or supply is insufficient, Project Zero can provide token incentives to owners of energy resources in the network (such as smart appliances, water heaters, thermostats, cogeneration systems, solar panels, and batteries) to reduce or shift their electricity consumption, rather than just offering discounts. This balancing capability enables Fuse to stabilize the grid at critical moments, keeping supply and demand in sync.
The shift in consumption patterns can help each household earn over $3,000 for every megawatt-hour of reduced demand. In large-scale applications, a portion of the benefits from these programs can be returned to consumers through token incentives, which can be used to reduce energy bills or directly redeemed for instant rewards.
As more households choose to dynamically adjust their electricity consumption through the incentive measures of Project Zero, Fuse can offer more competitive bids in Demand Response Programs (DRPs). This allows Fuse to provide greater and more predictable load reduction or shifting capabilities, for which we believe utility companies and grid operators would be willing to pay extra.
Virtual Power Plants (VPPs)
Residential installers of distributed energy resources (DERs) (such as solar panels, battery storage, electric vehicles, and smart appliances) often fail to collaborate with energy retailers, resulting in suboptimal system scale and configuration for households. This not only leads to low penetration rates of DERs in the market but also causes these systems to be disconnected from the overall grid.
In Fuse's vision, Project Zero drives households to add new renewable energy capacity through incentive measures and ensures that these new resources are efficiently utilized. This enables Fuse to operate as a Virtual Power Plant, integrating all distributed energy resources into a flexible entity that provides valuable services to the grid.
When the grid faces high demand or supply shortages, Fuse instructs distributed energy resources (DERs) in the Virtual Power Plant to increase energy production or release stored power. For example, solar and battery storage systems in the Virtual Power Plant can rapidly release or absorb power to help maintain grid frequency within a narrow range, while smart thermostats and water heaters can be temporarily shut off or adjusted to respond to changes in demand.
As a Virtual Power Plant, Fuse participates in wholesale energy markets, aggregating its DER footprint in local markets for larger and more predictable bidding, rather than solely as an energy retailer. Fuse can also provide services such as voltage support, which is crucial for grid stability. These services can bring substantial income, typically up to $100,000 per megawatt capacity annually.
By enhancing the reliability of these services, leveraging advanced metering technology, and analytics-based approaches, we expect Fuse to obtain more favorable contracts and higher returns from grid operators. Ultimately, the benefits of these open market operations will be returned to users who contribute assets to the network.
Advanced Metering and Real-Time Data
One ongoing challenge for energy producers and retailers is the lack of real-time data on factors such as power plant failures, demand fluctuations, and other factors directly impacting energy production. This makes accurately pricing energy for profit a significant challenge.
Fuse fills this gap by collecting random, minute-by-minute data directly from consumers, thus providing real-time information to support all pricing decisions in Fuse's advanced billing engine. We believe this will enable the company to achieve higher profitability and participate in wholesale markets. This means that every market covered by the network can access cheaper and cleaner energy.
As the customer base expands and there is a clearer understanding of the grid serving them, we believe Fuse is better positioned than most companies to profitably participate in energy markets and can help other participants in this process.
Building Open Protocols
In large-scale operations, Project Zero is an open platform that provides transparency to all generated and consumed energy resources, with no permission required for any participant in the energy value chain to access.
As Fuse accumulates more and more energy assets at the edge of the network, Project Zero begins to act as a powerful 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, allowing anyone to build products and services on top of it.
The Path to Energy Abundance
Fuse's unfair advantage in competing with industry giants lies in strategically eliminating barriers in machines through encrypted coordination primitives. This approach should more effectively acquire and engage users in the closed-loop generation and distribution process, preparing Fuse to become a new type of global energy retailer: not only trading electricity more profitably through asymmetric data and system improvements, but also incentivizing the adoption of renewable energy and ultimately rewarding its customers at every step.
Alan and Charles have deep operational experience in regulated consumer environments. The Fuse team consists of customer-centric builders and market operators focused on addressing the most urgent energy issues of our time.
Fuse is gradually nurturing Project Zero as its first core contributor to establish an open shared platform, bringing us closer to "energy too cheap to meter." For more information, please visit www.zero2050.com.
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