Fuse is a full-stack renewable energy company that operates utility-scale solar and wind power plants, as well as distributed energy installation business.
Author: Shayon Sengupta, Investment Partner at Multicoin Capital, and Tushar Jain, Co-founder of Multicoin Capital
Translator: 0xxz@Jinse Finance
On September 12, 2024, Multicoin completed a $12 million investment in Fuse. Fuse is a core contributor to Project Zero, a renewable energy DePIN aimed at solving significant energy coordination issues.
Fuse, founded by Alan Zhang and Charles Orr, both early employees of Revolut and key figures in Revolut's early development, has been focusing on addressing the energy crisis since 2022. Over the past few years, Fuse has built a modern tech-oriented energy company: establishing robust data and engineering systems with the goal of providing services to customers at a better cost and efficiency compared to current utility giants.
Currently, Fuse operates utility-scale solar and wind power plants, distributed energy (DER) installation business, and serves tens of thousands of households in the UK as a regulated electricity supplier.
However, this is not enough. To meet the world's growing energy demand, we need to add 4,000 terawatt-hours of electricity generation annually over the next decade—roughly equivalent to building the entire US grid from scratch each year. By 2030, an additional $4 trillion investment will be needed annually for modernizing the grid, storage, and transmission infrastructure—exceeding the annual GDP of Germany or Japan.
When combined with the complexity of geopolitics, the problem becomes even more severe: thousands of jurisdictions, mountains of red tape and regulatory bodies, and numerous market participants, each with their own incentives and constraints. Over the next decade, we will face significant energy challenges. We need a new approach, and this is where Project Zero comes in.
Project Zero is a renewable energy DePIN designed to accelerate the expansion and utilization of renewable energy and decentralized energy resources (DER) by rewarding network participants for shifting demand to renewable energy time, supporting the use of electric mobility, and generating new electricity through solar panels or batteries.
Energy production and coordination represent one of the greatest opportunities in our lifetime, and this cannot be solved solely through traditional railroads or structures. While operating Fuse, Alan and Charles realized that a cryptosupported capital formation mechanism is crucial for future development. This is exactly what Project Zero is: the incentive layer serves as the foundation for coordinating the most fragmented part of the energy value chain.
Fragmented Energy System
The mainstream trend in the energy industry is horizontal aggregation within specific segments (such as generation, transmission, or retail), rather than vertical integration across the value chain.
Installers like Trinity prefer to focus on the deployment of distributed energy resources (DER) but do not engage in direct energy retail business. Conversely, retail energy suppliers like NRG Energy typically do not provide DER installation services unless these services are bundled with traditional generation. Vistra Group—a large US generation company with a diversified asset base including natural gas, coal, nuclear, and solar—operates multiple retail brands such as TXU Energy, Ambit Energy, and Dynegy, but faces inefficiencies in coordinating the supply and demand of its generation portfolio. These entities operate largely independently, limiting their ability to achieve maximum operational returns at scale.
These inefficiency issues are particularly severe. Inconsistent data formats and incomplete consumer telemetry hinder real-time monitoring and demand forecasting for grid operators. Fragmented licensing frameworks across jurisdictions hinder economies of scale for renewable resource installation and service operations. Information silos hinder retailers from proper pricing and risk management.
Starting from first principles, Fuse is addressing the retail energy supply chain and intentionally operating at every layer to minimize efficiency losses at every step from generation to distribution in the lifecycle. They are highly focused on the mission of providing large-scale, low-cost, clean energy and continuously strive for it.
In the near future, this means addressing two specific issues:
Consumer transition inertia—how do we encourage people around the world to change their consumption patterns to more effectively balance grid loads as part of demand response programs and further adopt residential renewable products and distributed energy (i.e., electric vehicle chargers, batteries, solar inverters, heat pumps, smart thermostats)?
Retail energy distribution standard issues—how do we bridge the disjointed processes between retail energy suppliers, grid operators, virtual power plants, and DER installation service providers that historically made it difficult to achieve economies of scale through geographic expansion via retail energy business?
Project Zero complements Fuse's vertical integration strategy by providing an incentive layer for consumers to seize the opportunity to transform energy consumption and build new renewable energy capacity.
Aggregating Energy Assets at Scale
Fuse aims to make homeowners conscious and active participants in energy choices.
The Earth needs resource consumers who are actively engaged and responsive, rather than those who view energy usage as a monthly line item on a bill. By creating a delightful consumer energy experience, Fuse accelerates this transition while mediating the allocation of incentives for zero-emission projects to influence consumption patterns and encourage the installation of new capacity.
As an energy retailer directly related to customers, Fuse is in a favorable position structurally to capture and distribute value created by solving some of the most challenging coordination problems in the field: promoting demand response programs (DRP), operating VPPs, building low-latency metering systems, and leading new interoperable data standards.
Demand Response Programs (DRP)
Fuse can capture underutilized DRP potential by adjusting edge energy consumption and dynamically responding to grid conditions. Despite the ability of DRP to reduce peak power demand by 20%, the vast majority of eligible households worldwide do not participate in these programs. This means that during peak periods, hundreds of megawatt-hours of power can be shifted or reduced, significantly lowering operating costs.
When power demand surges or supply is insufficient, Project Zero can issue token incentives (not just discounts) to owners of energy resources within the network (smart appliances, water heaters, thermostats, cogeneration systems, solar panels, batteries) to reduce or shift their consumption. This balancing ability enables Fuse to stabilize the grid and keep supply and demand aligned at critical moments.
Source: New York City DCAS
These consumption shifts can promote reduced electricity demand per household, resulting in up to $3,000 in benefits per megawatt-hour. At scale, a portion of the benefits from these programs can be returned to consumers in the form of token rewards, which can be used to lower energy bills or directly redeemed for immediate rewards.
As more households choose dynamic consumption shifts through Project Zero protocol incentives, Fuse can participate in a large number of bids in DRP activities. This enables Fuse to offer greater and more predictable load reduction or transfer capacity, for which we believe utilities and grid operators are willing to pay a premium.
Virtual Power Plants (VPP)
DER installers (solar panels, battery storage, electric vehicles, smart appliances) often cannot collaborate with energy retailers to provide homeowners with the optimal system scale and configuration. This not only leads to a lower market penetration rate for much-needed distributed energy, but also often results in these systems being completely disconnected from the overall grid.
In Fuse's vision, Zero incentivizes households to build new renewable energy capacity and ensure the most efficient utilization of net new resources. This enables Fuse to act as its own VPP, aggregating all DERs into a single flexible entity capable of providing valuable grid services.
When the grid faces high demand or supply shortages, Fuse instructs DERs to increase energy production or release stored power (for example, solar and battery storage systems in a VPP can discharge or absorb energy rapidly to help maintain grid frequency within a narrow range, or temporarily shut off or adjust smart thermostats and water heaters to provide demand-side response).
As a Virtual Power Plant (VPP), Fuse participates in wholesale energy markets, aggregating its DER footprint in local markets to bid at a larger and more predictable scale than pure energy retailers. Fuse can also provide services such as voltage support, crucial for grid stability. These services can generate substantial revenue, often up to $100,000 per megawatt per year.
By enhancing the reliability of these services through advanced metering and rich analytics, we expect Fuse to secure more favorable contracts and higher returns from grid operators. The goal is to ensure that the benefits of these publicly market operations flow back to the users contributing assets to the network.
Advanced Metering and Real-Time Data
A long-standing issue for energy producers and retailers is the lack of real-time data on plant outages, demand fluctuations, and other factors directly impacting energy production. Without this data, pricing energy correctly and profitably becomes a significant challenge.
Fuse addresses this gap by collecting random, minute-by-minute data through its direct relationship with consumers. This real-time information is input into Fuse's advanced billing engine, providing information for all pricing decisions, which we believe will enable the company to participate in wholesale markets with higher profitability. This means that every market for network services can access cheaper, cleaner energy.
With an expanding customer base and control over the grid serving its customers, we believe Fuse is better positioned than most companies to profit in energy markets and ultimately help others.
Building Open Protocols
At scale, Project Zero is an open platform that provides visualization of all energy production and consumption resources, accessible to any party in the energy value chain without permission.
As Fuse accumulates more and more energy assets at the edge, Project Zero begins to act as a powerful, trusted neutral protocol layer. This is the right way to build a 21st-century global energy system: connecting accessible energy resources through consistent, interoperable data standards, upon which anyone can build products and services.
The Path to Energy Abundance
Fuse's advantage over industry giants is its clever removal of the gears in the machine through cryptographic coordination primitives. This approach should more effectively attract users and involve them in the closed-loop generation and distribution process, making Fuse 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 customers at every step of the process.
Alan and Charles have deep operational expertise in regulated consumer-facing environments. The Fuse team consists of customer-centric builders and market operators focused on addressing the most urgent energy issues of our time.
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