The problem Futugrid is trying to solve

“The electricity system must always be balanced: as much generation as consumption. If the balance is out of place and no reaction is taken, there will be one big blackout and the system will collapse,” explains Toomas Valge, co-founder and CEO of the company. While Elering, which manages electricity grids across Estonia, is prepared to organise blackouts affecting whole towns or districts in critical hectares in order to maintain balance, Futugrid’s solution is slightly less troublesome.

“It’s basically the same thing, but we’re just doing it at a micro level. So instead of turning off 10 houses, we’re turning off 10 electric boilers,” says company co-founder and electrical engineer Leino Schnur. Specifically, Futugrid is currently testing a solution to help balance the electricity grid through households. The solution, consisting of a smart plug and software, helps balance consumption on the one hand and save money on the other.

Energy costs for household consumers are constantly rising. With this solution, everyone should win, the start-up founders believe. “The more these devices are deployed in Estonia, the less blackouts will be needed to balance generation and consumption capacity,” adds Valge. “I wouldn’t want to predict it, but there is a very high probability that the first large-scale blackout is not far off. After that there will be a change, probably in our whole attitude.”

Futugrid, which started three years ago with the idea of optimising the charging of electric cars, reached the 2020 target. to today’s idea. As the uptake of electric cars finally seemed too slow to change the energy mix, it seemed sensible to look at the same problem from a different angle.

In addition to Toomas Valge and Leino Schnur, the founders also include IT expert Igor Maksimov, who has previously been part of the IT teams at Elion and Cleveron, for example.Together, they came up with a solution that focuses on an existing resource, i.e. residential consumers, whose energy use could be managed much more rationally than today.

“If we look at the big picture of energy consumption in Estonia and the Baltics, we can say that about 28-30% of the energy consumed is consumed by households, with the remainder coming from industrial and commercial consumers,” he said.” he said. says White. And for domestic consumers, all electrically powered appliances, such as hot water boilers, electric radiators, underfloor heating, heat pumps and refrigeration appliances, are so-called inert appliances. These are devices that can be switched off in a way that does not cause significant inconvenience to the consumer,” he says.

To date, a pilot solution has been completed, consisting of two parts: hardware and software. On the hardware side, Futugrids has developed a smart plug that connects energy-intensive appliances in homes to the electricity grid. The smart plug is connected to software that monitors the operation of the devices and can manage their use in the way that makes the most sense. Consumers will also be able to configure the software themselves through the user interface, for example by deciding whether they are willing to take slightly cooler water to maximise savings.

The prototype developed by Futugrid is being tested today in half a dozen Estonian households, and the results so far show that the start-up’s solution can save up to 40 percent on electricity costs. According to the founders, the solution is “as simple as possible” to use. This also differentiates Futugrid from its competitors, who are also trying to balance the electricity system in one way or another through residential consumers. “Everything is done via GSM,” explains Schnur. “Others have to set it up on their home wifi and that requires a certain skill that Grandma Maali doesn’t quite have. Anyone can get our solution up and running,” she says.

Although Futugrid is now, metaphorically speaking, only a few steps away from mass production, the road to the current solution has not been a straight line, admit Valge and Schnur. The biggest barriers to starting a business are external. “It all started with the corona, which broke supply chains. And, of course, influenced by the war in Ukraine. So we have been directly affected by the ‘chip crisis’,” says White. “When we got to the actual production of our device, we were able to do some test batches and then it turned out that certain key components were no longer available. Or rather, their availability was postponed for an unknown period. As a result, we had to redesign the product and replace components,” he said. he says. “An extreme example is when a component that originally cost eight dollars suddenly disappeared from the warehouse and came back for $360 a piece. After a while it was gone again and came back at $64 a piece. Now, by the end of the year, I think it will suddenly be available again for eight dollars. It is these absurd anomalies that have affected us the most.”

However, things have gone well despite the difficulties, says Schnur. “We very much hope that by the first quarter of next year we will be ready for real production. Then we can start to offer this solution fully on the retail market. At the moment, those 50 plugs are still in the homes of friends and relatives,” says Schnur. “So we have three S’s in the circle: friends, relatives and siblings” adds White with a laugh.

Currently, Futugrid is mainly focused on creating the integration between the start-up’s IT system and Elering’s IT system. According to the founders, getting in touch with Elering initially required some work, but today it is clear that the electricity grid operator is also interested in starting the venture. Futugride’s business model is that the consumption management service is free of charge to the end-user, with the company planning to generate revenue from the frequency market. “Our core business is still the provision of Elering’s regulation service, and that is where we get our fees,” notes Valge. However, he admits that the solution is not available to households completely free of charge. “We still want the end user to pay us money for the plug. The very simple reason is that the free stuff stays on the shelf afterwards,” says White. “But it’s certainly a price at which the end consumer will get that money back in less than a year.”

Angel investors don’t want to mess with iron So far, Futugrid has grown largely on the back of the founders’ wallets and grants. The start-up has received support from EAS and the Estonian-Norwegian Green ICT Cooperation Programme at various stages, and is also collaborating with TalTech and TripleDev OÜ. This summer, the start-up also raised €150 000 in a pre-funding round. According to Valge, the investors were private individuals. “Three Fs again,” he says with a laugh, again referring to friends, relatives and “fools”. “And most importantly, we did quite a lot of pitches in the first half of the year and you can see from that that as soon as we started talking about hardware, a lot of angel investors had a block in front of them: “What? What? No, we don’t want to do iron!”. But we do!” White grins. Without the iron, the Futugris can’t simply validate their solution, he says. But validation has many benefits, say the founders. “The world isn’t enough,” Schnur boldly describes the company’s ambitions.

With an eye to the near future, the founders say that this year’s goal is to test the integration of Elering with a total of 300 home appliances. “Next year we want to start mass production and by mid-year we could have around 5,000 units in circulation. And with this, we have actually been able to prove on Estonian soil that the system works,” says Schnur.

Once the solution has been validated on a pilot site in Estonia, the next steps are the Baltic States and Scandinavia. Futugrid has the following markets wide open to the world, say the founders. For example, there is talk today of Brazil, which will have electricity exchange tariffs from this year, and South-East Asia also looks promising. “With a sense of humour, we could say that our market is in the countries with the highest number of electric generators sold per 100 000 inhabitants,” adds Schnur.