Reactive Technologies has raised £25m in a funding round led by M&G Investments, BGF and Breakthrough Energy Ventures for the global expansion of its technological solutions in support of the renewable energy transition.
UK and Finland-based Reactive Technologies has announced a fundraising of £25m (€23m) led by M&G Investments, alongside investments from UK and Ireland growth capital investor BGF and climate tech investor Breakthrough Energy Ventures. The latter is part of Breakthrough Energy, the Bill Gates-founded umbrella company focused on accelerating innovation in sustainable energy.
Reactive said the funding would be used towards growing the company’s operations internationally and increasing its commercial and technical workforce in order to advance the realisation of contracted projects worldwide using its grid resilience technology.
The company’s range of technological solutions, which include GridMetrix, a technology designed to accurately measure critical grid stability characteristics such as inertia, system strength and oscillations, are aimed at helping grid operators, electric utilities, and regulators transition to net zero.
First-time investor M&G, who invested through Catalyst, a £5bn purpose-led private assets strategy investing in companies addressing environmental and social challenges, confirmed to Impact Investor that its investment represented the substantial majority share of the round, but the firm would not be drawn on the exact amount.
Zachary Webb, head of EMEA investments in Catalyst at M&G Investments explained that the energy transition was a central theme to Catalyst’s strategy.
“We are proud to support Reactive Technologies on its mission to accelerate the decarbonisation of electricity grids globally. The company’s scalable technology, which allows the monitoring of power system stability in real time, is key to unlocking higher penetration of renewables whilst maintaining the stability and reliability of electricity grids,” he said.
The Catalyst team manages the strategy on behalf of the £129bn Prudential With-Profits Fund. Earlier this month, Impact Investor reported on its investment into a blended finance vehicle supporting economic growth in Southeastern Europe.
Rising complexity of electricity grids
Reactive said that as global renewable energy deployment accelerated, grid operators were having to grapple with challenges related to grid stability, such as diminishing inertia and system strength.
The company’s GridMetrix technology aims to address these challenges by enabling system operators to monitor power system stability in real time, allowing them to reduce renewable curtailment, prevent blackouts, and optimise spending on balancing services, while also reducing unnecessary carbon emissions, it says.
Marc Borrett, CEO for Reactive Technologies, told Impact Investor that achieving net zero could be broken down into three categories –building more renewable power, connecting more renewable power to the power grid and operating the power system on high levels of renewable power.
“The first two are known but the third is unknown. It is this fundamental change to how electrical power grids operate that is core to achieving net zero and grid operators have to solve the challenge of maintaining a safe and reliable power system whilst it is decarbonising,” he said.
Borrett explained that replacing stable fossil generation with intermittent renewable generation created an inherently less stable power grid. In the absence of real-time data informing power grids of their stability and ability to safely use greater proportions of renewable energy, grids often had to resort to curtailing or disconnecting renewables, effectively putting a brake on net zero and increasing the costs of managing the power system.
“By providing real-time stability data, as Reactive have shown in the UK, real, national-scale impact can be achieved,” he said.
Focus on the UK
In the UK, where Reactive has deployed its GridMetrix technology with the National Grid Electricity System Operator (National Grid ESO), it is estimated to be saving approximately 18 million tonnes of CO2 annually for the country’s power system, equivalent to approximately 5.5% of total annual UK CO2 emissions. This equates to savings of around £14.4m over a 12-month period.
The company said it expected CO2 savings to rise even more significantly as greater measurement data enabled National Grid ESO to safely operate with lower levels of stability.
Last month, for the first time, the UK’s national grid ran virtually entirely free of fossil fuels for an hour, according to the National Grid ESO, a target that Reactive said was deemed unachievable five years ago.
Globally, Reactive estimates that its technology has the potential to mitigate 1,450 million tonnes of CO2 annually.
Commercial growth
To date, Reactive has deployed its technology with grid operators in the UK, North America, Australia and Taiwan with a number of contracts in progress in the Middle East.
The company’s most recent market entry was into the US where it was contracted for a large-scale demonstration project in New York state.
Borrett said funding and support for the project had come from the New York State Energy Research and Development Authority, the New York Grid Operator and multiple other New York-based utilities, who he said all saw the same challenges ahead, as offshore wind capacity is set to quadruple by 2035 and solar deployments double in the next two years alone.
“We are now seeing these same challenges affecting more and more power systems around the world as they see ever growing amounts of renewable plants being built at increasing speed and scale,” he said. “By providing real-time measurement of the power system’s stability (inertia) the New York Grid Operator can safely maximise the amount of renewable energy on the system whilst maintain[ing] reliable and secure operations.”
Reactive said it has additional projects on the horizon in the US, Asia and Europe.
