Currents Ep320: Streamlining Utility Planning for Rapid Deployment

Podcast: Currents (Norton Rose Fulbright)
Host: Todd Alexander
Guest: Pierre Lafarge, CEO, SparkFund
Date: October 16, 2025

Episode Overview

This episode delves into the evolving landscape of utility-scale capacity procurement in the face of soaring demand from data centers, manufacturing, and electrification. Todd Alexander interviews Pierre Lafarge, CEO of SparkFund, exploring their "distributed capacity procurement" (DCP) model—a framework designed to enable utilities to quickly deploy distributed energy resources (DERs) like batteries at scale, streamlining planning, procurement, and deployment to meet rapid load growth. The discussion emphasizes practicalities, regulatory frameworks, and SparkFund’s role as a service provider and ecosystem enabler.

Key Discussion Points & Insights

1. Understanding Distributed Capacity Procurement (DCP)

• What is DCP?
  Pierre explains that DCP involves utilities procuring and deploying distributed energy resources—mainly batteries, some gensets, and solar—directly onto the grid, targeting places of congestion or high demand to add capacity quickly and cost-effectively.
  • Quote:

    "It's easier to build a bunch of small things faster, get them permitted and interconnected, and you can target them to areas of congestion... and get them built on time and on budget. And that's what SparkFund helps utilities get done."
    (Pierre, 01:08)

• SparkFund acts as a "buyer's rep" for utilities, handling fragmented deployments across many locations, and manages competitive bidding for standardized battery systems.
  • Quote:

    "We act as an extension of their traditional procurement systems... We handle all the fragmentation at the grid edge."
    (Pierre, 01:36)

2. Deployment Model & Target Participants

• Who can participate?
  DCP typically involves medium-scale assets (500 kW–2 MW, average 1 MW/4 MWh), sited at commercial hosts (e.g., grocery stores, warehouses), rather than individual homes.
  • Quote:

    "We focus on medium format batteries... think a shipping container, batteries."
    (Pierre, 03:42)

• Hosts are paid to allow asset placement, similar to land leases for wind farms or telecom equipment.
• Process:
  • Identify optimal host sites
  • Pay hosts a lease
  • Utilities or large customers may own the assets
  • Bids are solicited from regional vendors for build-out

3. Why Utilities Should Embrace DCP (Benefits & Limitations)

• DERs and batteries aren't the only solution but can meet 10–20% of peak grid capacity for targeted, rapid deployment.
• They function as “time machines and transporters”—charging during low demand, delivering capacity during constraints.
  • Quote:

    "Batteries are sort of both time machines and transporters... Right. So batteries are sort of both time machines and transporters."
    (Pierre, 04:44)

• Not a replacement for large, centralized projects but a complementary tool in grid planning.

4. DCP vs. Traditional Approaches

• Traditional programs that rely on retail customer adoption of batteries/DERs tend to be slow, small-scale, and opportunistic.
• DCP provides a utility-controlled, planned, and scalable method—enabling better system planning and predictable capacity.
  • Quote:

    "...selling an individual customer a new battery or a solar panel is hard and slow... it's slow to deploy... they're often smaller systems that are sized to that customer's load, not the needs of the grid..."
    (Pierre, 08:19)

• Utilities can forecast and plan, regulators can prudently review costs and alternatives.

5. Role of Non-Utility Parties

• Hosts: Provide sites, receive annuity payments but avoid risk/obligation for the asset.
• Vendors/OEMs: Bid competitively for standardized projects, supporting local economic activity.
• Regulators: Review and approve DCP plans, ensuring cost-effectiveness and prudent investment.
  • Quote:

    "We bundle up hosts... and we turn those into tranches that companies can bid competitively into to supply. And we do that on a recurring monthly, quarterly basis..."
    (Pierre, 10:26)

6. Ownership & Financing Structures

• Flexible:
  • Utility may own and rate-base the battery (like lines or substations)
  • Third-parties or large customers (hyperscalers) can co-invest or fully fund
  • Tolling/other finance structures possible
  • Key: Predictability and aggregation at scale enable inclusion in grid planning.
  • Quote:

    "Ownership is flexible though... What really matters for a distributed capacity procurement is putting it into planning at multi hundred megawatt scale enough to confidently impact the system's capacity..."
    (Pierre, 11:29)

7. Where DCP Works Best

• Areas with grid constraints, rapid economic growth, complex or slow permitting for centralized projects.
• DCP is increasingly applicable as constraint and growth become more widespread across the US.
  • Quote:

    "Where there's capacity constraint is also where there's economic growth and new development... it can truly add 10 to 20% of peak capacity, it's a very big tool..."
    (Pierre, 13:12)

8. Business Model & Market Trends

• SparkFund offers a capital-light, specialized services approach, coordinating fragmented grid expansion and engaging hundreds to thousands of sites and vendors.
• Expected boom in battery deployment, driven by manufacturing, electrification, and AI/data center loads.

9. Regulatory Framework

• DCP aligns with existing regulatory models—utilities submit plans, regulators approve (with updated distribution-level analytics).
• Minimal regulatory innovation or reform required; just expanded utility planning and approval for granular distribution analysis.
  • Quote:

    "...it's using utilities exactly as they were intended to exist. Right. Distributed capacity procurement is just putting new capacity resources into planning, organizing procurements that are regulatorily approved..."
    (Pierre, 15:31)

10. Impact of Policy & Market Certainty

• New reconciliation bill and federal incentives (ITC for batteries) lower costs, but the value of batteries is robust regardless of subsidies.
  • Quote:

    "I think batteries are really critical tools to get more out of the grid we have faster. And so preserving those tax credits is certainly going to lower the cost of the batteries to ratepayers."
    (Pierre, 16:50)

11. Magic Wand: Regulatory Wish

• Lafarge urges regulators to proactively approve funding for granular distribution grid analysis—enabling confident planning and unlocking grid value.
  • Quote:

    "...utility regulators giving utilities approval for the recovery of the analysis part... a very low cost way to get a whole lot of value when you understand that system."
    (Pierre, 17:50)

12. Where to Learn More / Participate

• Interested parties can contact SparkFund, see recent regulatory filings (Xcel Energy in Minnesota, Exelon in Maryland), and find information at sparkfund.com.
  • Quote:

    "...this concept is pretty straightforward. You need more capacity. Some of it can be distributed. It's easier to build small things, put it in planning at scale and go and go procure it in just the same way that we've procured utility scale assets for decades."
    (Pierre, 19:42)

Memorable Quotes & Moments

• On planning philosophy:

  "Utilities plan their systems. They have the superpower of long term thinking. Right. They're one of the last institutions in our society that can really think 5, 10, 15 years in advance."
  (Pierre, 06:15)

• On distributed vs. centralized:

  "Centralized resources like large wind farms, utility scale solar, gas plants, nuclear... transmission lines are going to be 70 or 80% of the solution here. Right. This is not a replacement for or better than the traditional utility playbook..."
  (Pierre, 13:39)

• A playful jab at industry white papers:

  "No one actually reads white papers. You just know they exist and then use them as industry objects to discuss. They're like trading cards."
  (Pierre, 05:52)

Important Segment Timestamps

| Timestamp | Segment | Key Topic | |-------------|-------------------------------------------|--------------------------------------------------------| | 00:41–01:29 | DCP explained | What is distributed capacity procurement | | 01:29–03:13 | The SparkFund model | How SparkFund supports utilities and host selection | | 03:15–04:19 | System sizes, target hosts | Which businesses/sites are best for deployment | | 05:31–06:55 | White paper findings | Planning and scale, role of SEPA research | | 07:22–09:11 | DCP vs. other approaches | Why DCP is faster/more scalable than retail programs | | 09:24–10:51 | Value chain & non-utility actors | Process, recurring bidding and aggregation | | 11:20–12:52 | Asset ownership arrangements | Flexibility and planning implications | | 13:11–14:13 | Where DCP works best | Geographic and situational advantages | | 15:07–16:21 | Regulatory framework | Fitting into current rulebooks | | 16:43–17:33 | Policy, incentives, and market outlook | Impact of federal incentives and certainty | | 17:49–19:00 | Regulatory wish-list | The need for granular grid analysis funding | | 19:09–19:53 | Getting involved, market traction | Where to participate, recent filings, industry momentum |

Conclusion

Pierre Lafarge presents DCP as a pragmatic, scalable tool for utility-led grid expansion—leveraging competitive private sector deployment of DERs while fitting within established utility planning and regulatory structures. The discussion highlights both the limitations and transformative potential of distributed resources as a complement to centralized infrastructure. Regulatory support for enhanced distribution planning and analysis emerges as a key enabler of this evolving procurement landscape. Interested parties—including utility planners, regulators, and commercial real estate holders—can find more at sparkfund.com or follow regulatory filings in Minnesota and Maryland.