Pressures Are Mounting On An Already Struggling Power Grid

Power is one of the largest and most critical markets in the US, with over $500B in spend and $3T of US market capitalization. The correlation between energy consumption-per-capita and GDP-per-capita is one of the strongest in all of economics, demonstrating both the sector’s criticality to economic progress and durable growth. Yet the delivery infrastructure that underlies this progress, the grid, is straining under unprecedented pressures stemming from peak load constraints and the system’s synchronous nature (requiring generation, transmission, and consumption at the same time). The power market is undergoing several tectonic shifts at once.

Foremost among them is the energy transition: Solar has become the lowest marginal cost source of electricity, reshaping how, when, and where power is generated. In just a decade, the cost of solar PV cells has fallen by more than 50% and its share of US generation has grown from 1% to 7%. This surge of variable generation is testing the limits of a grid designed for energy sources that are predictable, continuous and controllable. While providing cost advantages, solar drives greater volatility into the system given peak generation (mid-day) and consumption (evening) are at different times. As a result, generation sources and transmission are sized for peak demand but often sit underutilized, a structural inefficiency that solar makes even more pronounced. At midday, solar output can overwhelm the system, forcing projects to curtail output because the grid cannot absorb it.

Equally consequential is the inflection in energy demand. After decades of close-to-flat energy demand, new drivers are pushing demand upward, such as the electrification of buildings and transportation and the explosive growth of data centers and AI. Annual growth in consumption is expected to average ~1.5% between 2020-2050, up from just ~0.5% between 2000-2020. In Texas specifically, demand is forecast to grow double digits over the next two years. Meeting this demand requires expanding generation capacity, but beyond generation, transmission is the key constraint. The average U.S. transmission line is 40 years old, and much of the network was never designed for the scale of today’s load. Transmission congestion is already impeding the addition of new generation capacity, with developers facing interconnection queues that stretch five years or more due to high costs. The result is a widening shortfall: We are building an order of magnitude less transmission than the DOE targets, a gap that will materially impact grid reliability.

The growing volatility of climate further strains our existing infrastructure. Rising global temperatures are amplifying both the frequency and severity of extreme events, from summer heat waves to winter storms and hurricanes. These shocks stress the grid on both sides; demand spikes as millions of homes and businesses turn on air conditioning or heating, while supply is disrupted as thermal plants freeze, transmission lines fail, or utilities preemptively shut off power to reduce wildfire risk. In Texas, Winter Storm Uri in 2021 forced outages for millions as gas plants went offline in subzero temperatures, while in California, record heat waves in 2022 pushed the system to the brink of rolling blackouts. As climate volatility increases, the grid must not only scale to withstand less predictable peaks and disruptions.

Together, the rapidly changing supply mix, accelerating demand growth and heightened volatility are exposing the structural limits of the existing grid, creating both an urgency and opportunity for a new class of solutions.

Batteries: A Shock Absorber For The Grid

Batteries are emerging as the clearest solution to our country’s grid challenges. Batteries allow decoupling time of generation from the time of consumption, allowing electricity to be stored when supply is abundant and released when demand peaks. While providing value across all forms of generation, this flexibility directly addresses the challenges of intermittent renewables.

Utility-scale storage represents the majority of battery capacity deployed today, but we believe behind-the-meter batteries (those located at residential and commercial locations), are critical to scaling past the grid’s constraints. While utility-scale batteries allow time-shifting of generation, behind-the-meter batteries further enable time-shifting of transmission. We think this is critical since transmission capacity is the grid’s most intractable bottleneck.

Through this decoupling, batteries can serve as a mechanism to increase utilization of existing generation and transmission resources. If today’s generation/transmission capacity is limited by peak loads, batteries can increase the serviceable peak by time-shifting underutilized non-peak capacity.

By utilizing existing behind-the-meter interconnects, they also bypass the interconnection queue, enabling much faster deployment than centralized assets. Although each device is smaller than a utility-scale battery, aggregated fleets of behind-the-meter batteries can unlock grid-scale capacity, with the added economic benefit of being able to serve demand directly.

What makes batteries even more compelling is how quickly the economics are improving. As demand for batteries grows, the hardware is progressing through a “Wright’s Law” exponential cost reduction curve  -- lithium-ion battery prices have fallen at a 20% CAGR since 2017 (and 40% in 2024 alone). At this pace, batteries are on track to evolve from a niche resource into the backbone of grid flexibility.

Base: Building the US’ Distributed Battery Network

Base is reimagining what a power company can be. Through its network of home batteries, it provides both homeowners and utilities with affordable, reliable power while stabilizing the broader system. It has built a “10x” customer value proposition: a close-to-free home battery that keeps the lights on during outages and lowers monthly electricity bills. Behind the scenes, Base’s proprietary software optimizes when those batteries charge and discharge, buying energy when it’s cheapest and selling it back to the grid when it’s most needed. The result is a system that doesn’t just help individual households, but also makes the entire grid more resilient and efficient.

Energy is a commodity product and, therefore, the dominant strategy is low cost disruption. To this end, Base is taking a fully verticalized approach spanning hardware design, manufacturing, software, and installation/servicing operations. This is an ambitious undertaking and today, half of Base’s team is engineers, reflecting the breadth and depth of expertise required to solve each individual challenge in-house. This approach enables Base to offer the cheapest and fastest-to-deploy storage on the market.

The software platform was purpose-built for the complexities of modern power markets. Base has solved a difficult distributed networking challenge, enabling sub-second telemetry across thousands of devices, a capability that provides both operational reliability and a data advantage for energy trading at scale. With this architecture, Base can deliver ancillary services to the grid, services traditionally only provided by centralized plants, turning home batteries into dependable grid resources. Base’s co-founders, Zach Dell and Justin Lopas, bring rare, complementary expertise to this opportunity. Zach worked on grid-scale battery financing projects where he saw firsthand why the economics often broke down. Justin led manufacturing at Anduril and was a lead engineer at SpaceX, scaling complex hardware programs under extreme performance and cost constraints. Together, they’ve been able to assemble a world-class interdisciplinary team around a shared passion and ambition for Base’s mission to redefine the grid.

The name “Base” speaks clearly to the team’s ambition to elevate battery dispatchable power from “peak shaving” to a reliable and critical component of the modern grid.

We are proud to partner with Zach, Justin, and the rest of the Base team as they build America’s next-generation power company. The challenges facing the grid are immense, but so is the opportunity to reinvent it.