The United States electricity grid is on the verge of its most significant transformation in generations. Power sector consulting firm Grid Strategies forecasts 5.7% average annual electricity use growth in the U.S. between 2025 and 2030, driven primarily by data centers and accelerating industrial, building, and transportation electrification. If realized, this would represent the highest sustained rate of electricity usage growth since the adoption of air conditioning in the 1960s. 

Much of this growth will take place within regions served by an independent system operator (ISO) or regional transmission organization (RTO), which today manage approximately two-thirds of the US’ electricity load. These markets use various auctions and price signals across a web of hubs and nodes to balance electricity supply and demand across a transmission-constrained grid. These prices not only balance real-time supply and demand but also signal to generation, load, and transmission developers where best to build new infrastructure. 

While these auctions are excellent for clearing markets, energy companies of all stripes must make decisions based on their assessment of future prices. Energy traders must understand how unexpected events, such as deviations from load or supply forecasts or unexpected outages on grid infrastructure, will impact prices. Generation developers and investors with a longer time horizon must account not just for today’s nodal energy and capacity prices but for how they might evolve across decades of technological, economic, and policy uncertainty. Curtailment risk, congestion risk, and basis risk all compound the difficulty. Today, companies use a mix of black-box forward-curve providers, expensive consultant-led simulations, legacy simulation platforms, and internal spreadsheets to shape investment decisions. These tend to be slow, expensive, and inherently limited in their capabilities.

Distill Energy combines probabilistic power flow, long-horizon fundamentals, and a forward evolving grid model in a dynamic grid simulation platform to help energy and congestion-rights traders, renewable energy and grid developers, and financiers assess price and congestion risk from one hour to many years into the future. 

A massive and rapidly growing market faces unprecedented forecasting complexity

• Building out a grid that can resiliently support projected load growth will require a level of investment not seen in generations. According to Deloitte, investments could total US$1.4 trillion from 2025 to 2030.

• At the same time, developers, investors, and traders in restructured markets face a myriad of uncertainties as they work to meet this moment. In the short term, unexpected outages, variations in renewable generation, and demand spikes can all move prices far away from their mean. In the longer run, the price at a given node can be impacted not only by where and when new load and generation come online, but also by factors such as transmission buildout, natural gas prices, economic activity, and policy. 

• Developers signing VPPAs with large loads must also forecast and manage basis risk, which is the difference between the settlement price at the Hub (what VPPA prices are usually tied to) and the specific node at which their asset interconnects.

The status quo fails to meet the needs of this moment

• Forward curves projecting a few potential nodal price outcomes reflect the industry standard. While required by most financiers, these black-box outputs offer limited flexibility around assumptions and little ability to model correlated risks or scenario-specific outcomes.

• Existing complementary software solutions are cumbersome, typically requiring specialized technical expertise and lacking the flexibility to run the volume of probabilistic scenarios needed for rigorous risk analysis.

• Many developers turn to consultants for specialized supplemental analysis for items such as basis risk and curtailment risk. However, these tend to be both slow and expensive.

Distill Energy brings probabilistic, flexible, and accessible power market simulations to the whole ecosystem

• Distill Energy’s platform is technically differentiated by the way it combines robust power flow modeling with cutting-edge uncertainty quantification techniques. This provides users a probabilistic spread of price outcomes. 

• The platform also distinguishes itself in its flexibility. Users can customize various fundamental inputs such as fuel prices or demand, allowing them to apply their own proprietary views of the world. The platform can also model risk against specific binary outcomes, such as whether a particular transmission line or data center gets built, or show the magnitude and range of the price impacts of an unexpected event like a specific transmission line or generator going offline. 

• Distill Energy can also surface hard-to-identify correlated risks across asset portfolios, allowing for more resilient portfolio construction. 

Powerhouse Ventures is proud to co-lead Distill Energy’s $2.5M pre-seed round alongside Pale Blue Dot, with additional participation from Stepchange and strategic angel investors. We look forward to working with CEO and Co-Founder David Kozak, CTO and Co-Founder Matt Parno, CPO and Co-Founder Sonya Gustafson, and the entire Distill Energy team to bring rigorous, probabilistic power market intelligence to developers, financiers, traders, and grid planners.