Introspective Systems, a Portland-based startup working on cutting-edge artificial intelligence applications, recently announced it has kicked off a commercialization project with an Israel-based partner to develop and test software to control micro energy grids.

The news follows an announcement last December that Introspective Systems and a Jerusalem-based R&D partner, Brightmerge, had been selected to receive a $2 million grant from the joint U.S.-Israeli Binational Industrial Research and Development (BIRD) Foundation to pursue the project.

The companies will leverage their respective areas of expertise to create an end-to-end AI-based solution for microgrid design, development, and operations, according to the company’s announcement. Brightmerge brings proprietary algorithms, while Introspective Systems has an AI-powered energy simulation engine.

“The process of developing microgrids can be costly,” Kay Aikin, Introspective Systems’ CEO, said in a statement. “It begins with a feasibility study reaching hundreds of thousands of dollars, even before any design, procurement, and installation.”

Aikin said microgrids are more effective than traditional centralized grids at matching variable energy generation and demand. That has become increasingly important as localized energy generation via renewable sources like solar and wind have become more common. Traditional energy grids were designed with centralized generation control that provide economies of scale that minimize the cost of delivering electricity. These energy grids, which were built on non-variable energy generation resources (think oil- and gas-fired power plants), were easily able to match the fluctuating demand from energy consumers. However, with the rise of renewable energy sources, now both the generation and load can vary, a complication these centralized grids have a harder time handling.

“After spending almost 20 years in the renewable energy industry, it has been clear to me for a long time that microgrids are the architecture of the future energy system,” Daniel Schwab, Brightmerge’s founder and CEO, said in a statement. “We are at the early stages of a complete overhaul of the entire energy system that was based on a 100-year-old design using outdated technologies and methodologies. Brightmerge and Introspective Systems have the industry knowledge and technological know-how to provide seamless solutions that bring entire economies into the digital age of energy.”

The eventual commercial product the companies are developing will be marketed to microgrid developers, owners and engineering companies, according to Aikin. She expects the company’s first commercial sale will be the control system for the Isle au Haut microgrid. Brightmerge, she said, is also working on a large microgrid project in Israel.

The first production versions are expected to be ready at the beginning of 2021, according to the companies’ announcement.