The red tape revolving around how electric power utilities work in most places around the world means that consumers spend a lot of money on electricity bills, although very little of it goes towards the actual cost of the service. But Seattle-born startup Drift is on a mission to change this via direct supplier-to-customer networks – with the advantages of solar power. Drift’s solution is currently being tested in New York City, where it is linking independent upstate power producers with New Yorkers with the objective of removing unnecessary costs.
Two key tools for this to happen are solar panels or home storage systems that allow households to self-operate without depending on either utilities or authorities. The second tool is the internet, which allows new forms of trading relationships that are more peer-to-peer, or in this case, supplier-to-customer.
Using machine learning, high-frequency trading, and a blockchain digital ledger for handling power trades, Drift claims it is able to reduce the prices of electricity bills by 10 to 20%. New Yorkers pay $4.33 per month, in addition to the costs of supplying the power from wholesale markets. While traditional electric power utilities increase electricity bills based on the amount of power used, Drift makes money by signing up more customers, not by increasing what it charges per customer.
“We are completely incentivized to lower the cost of energy. We want to find more local sources, more efficiencies, and strip out the middle man. We don’t lose money if your power bill goes down. But we probably won’t sign up many people if your bill goes up,” Drift CEO Greg Robinson says.
Drift is an “energy buying team for everyone else,” as Robinson puts it, as it follows in the footsteps of tech giants who have engineered themselves similar strategies to narrow their spending. “Google and Amazon are taking control of their own power buying, going around the utilities’ administrative bureaucracy to buy directly from power makers, or they’ll develop their own plants,” he breaks down. “We’re basically that energy buying team for everyone who can’t afford an energy buying team.”
Drift is signing up small hydro producers, home developers with excess solar power, as well as large buildings with high-demand times. The start-up approaches these producers by saying that they can provide a market for their small-scale supply where traditional buyers can’t.