The X factor in energy

One of the greatest challenges in today’s energy landscape isn’t generating electricity – it’s delivering it, especially as demand from energy-intensive sectors, like data centers, continues to surge.

“It’s like water flowing through a pipe,” says Michael Stadler, co-founder and CTO at Xendee. “You can have enough water, but if the infrastructure can’t carry it, it won’t reach where it’s needed.”

Upgrading transmission and distribution systems takes years, and the assets involved – transformers, substations, high-voltage lines – last multiple decades. This makes infrastructure investment a high-stakes decision. In the meantime, rising electricity prices are driven less by the cost of generating power and more by the cost of moving it.

Originally from Austria, Stadler sees a familiar challenge across Europe and the US: generating renewable energy is only half the solution – getting it to end users remains the bottleneck.

“That’s why we’re having this conversation,” he explains. “Should we keep investing in centralized infrastructure, or shift focus to microgrids that co-locate generation and demand? Microgrids can be faster to deploy and potentially more cost-effective.”

Centralized vs localized

Stadler observes a key difference in how regions are responding to energy infrastructure challenges. In the US, the concept of microgrids and the colocation of energy generation is becoming more mainstream, with widespread adoption across military bases, communities, and increasingly, data centers. These systems help alleviate pressure on the existing distribution grid and offer a more resilient, localized energy model.

In contrast, Europe remains more focused on expanding renewable generation and upgrading distribution networks, with less emphasis – so far – on decentralization strategies like microgrids.

“My guess is this will shift,” says Stadler. “If utilities move forward with large-scale infrastructure investments, and electricity rates double as a result, that creates serious problems – for inflation, for industry, for competitiveness. At some point, European utilities will also need to consider microgrids and colocating generation with demand. It’s a way to reduce costs and delay or avoid major infrastructure upgrades.”

Microgrids, not magic

As electricity demand surges, especially in regions with high data center density like Virginia’s famous “data center alley,” existing grid infrastructure is increasingly under strain. Microgrids, powered by distributed energy resources (DERs), present a viable solution by reducing reliance on centralized grids, integrating diverse generation and storage technologies, and enhancing load flexibility. They also improve power quality, reliability, and overall energy resilience.

DERs are typically used to manage load variability and system uncertainty, enabling cost savings and carbon reduction. However, deploying a microgrid is far from plug-and-play, as Stadler explains:

“It’s not like going to the supermarket to buy a microgrid. You need engineering expertise, an understanding of how these systems operate, and access to critical data – particularly your energy consumption patterns.”

Project X: Simplify

Founded in 2018, Xendee is a software company committed to standardizing and accelerating the development of DERs through a platform grounded in engineering workflows.

“Many people are building DER projects, but are they optimally designed? Are they financially viable? And how easy is it for engineers to manage the complexity of these systems?” asks Stadler.

Xendee’s platform is designed to guide users through the entire DER project lifecycle – from early feasibility studies to implementation and ongoing control. The software simplifies complex design tasks by integrating cost data, technology options, site-specific inputs, and control strategies into a single, user-friendly tool.

“All these elements come together seamlessly in one platform. You plan it, implement it, and then manage it – all within the same system,” Stadler explains.

Traditionally, DER system design could take years due to fragmented processes and tools. Xendee’s standardized, data-rich approach significantly reduces this timeline, enabling system designs to be completed in a matter of months, or even weeks:

“Our goal is to make these projects easier and faster to deploy. By standardizing the process, we can eliminate up to 90 percent of the design time and help scale clean energy more effectively.”

From X to Y

Planning a DER project requires access to a range of critical data points, such as detailed annual energy consumption patterns, electricity rates, local weather patterns, and solar radiation patterns for the whole year. Without these inputs, projects can stall before they even begin. As Stadler explains, Xendee aims to lower the barrier to entry by automating much of this complexity:

“At first, it may sound counterintuitive to reduce the level of technical knowledge needed, but that’s exactly the point – we streamline access to the data and tools so more people can execute successful projects.”

By using a site’s zip code, Xendee can estimate key parameters such as baseline electricity costs, solar potential, and relevant technology pricing. The Xendee platform then uses this data to automatically design a tailored microgrid configuration.

“In essence, we provide the ancillary information needed to make the process easier, scalable, and replicable, so users can move from concept to execution with confidence,” says Stadler.

Planning in phases

Implementing a DER project, especially for data centers, requires a long-term, strategic outlook. Stadler emphasizes the importance of multi-year energy system analysis to account for evolving demand profiles, infrastructure needs, and emerging technologies such as small modular nuclear reactors (SMRs). Xendee recommends a two-phase approach for data center energy planning:

Phase 1: Addressing immediate needs

With SMRs unlikely to be commercially available before 2030-2035, data centers facing power constraints cannot afford to delay action. Stadler advises deploying available technologies – such as batteries, generators, and renewable energy assets – today.

“You need to build a microgrid with the technologies available now. Our analysis shows that waiting for future technologies like SMRs can lead to financial losses due to increasing utility costs – if the utility can even meet your demand at all.”

This first phase not only addresses current energy needs, but also helps organizations build familiarity and operational experience with microgrids.

Phase 2: Preparing for future integration

Once technologies like SMRs become viable, they can be integrated into an existing microgrid framework.

“Start building the microgrid concept now – get people familiar with it, implement current technologies, and later, if needed, consider layering in SMRs when (or if) they’re available.”

Xendee’s whitepaper, “A guide to meeting energy demand for data centers with distributed energy and future small modular reactors,” explores this two-step approach in depth, illustrating its real-world impact on energy cost, reliability, and infrastructure planning.

The X factor

With two decades of experience in the DER space, Stadler has a deep understanding of the market’s technical and operational challenges – insights that directly shaped the creation of Xendee. From day one, the platform was designed to support the entire DER project lifecycle within a single, unified environment, eliminating inefficiencies caused by fragmented workflows.

“Some players focus on early-stage analysis – helping you estimate a project at the idea phase. Others specialize in detailed studies of specific components like the distribution system. And some handle control once technologies are deployed. But to our knowledge, no other player supports the entire journey – from concept to deployment – across all levels of complexity.”

To illustrate the problem, Stadler points to a common industry scenario: A project is initially modeled using a basic tool like Excel, then handed off to a vendor for deployment. But by the time the system is built, control strategies often deviate from the original assumptions made during the planning phase. This disconnect can lead to suboptimal performance, as the operational behavior of the system no longer aligns with the intended design objective, resulting in underperformance and lost value.

Xendee solves this by consolidating the entire planning, design, and control process into a single platform, making it more accessible for non-experts, and more efficient for seasoned engineers.

A key differentiator is that Xendee’s own engineering and support teams actively use the software in real-world deployments, not just for development or sales. This hands-on approach ensures the tool is practical, field-tested, and supported by people with firsthand experience in implementing complex DER systems.

Getting into the nitty gritty of Xendee

Stadler makes a strong case for adopting an integrated energy system design platform by highlighting Xendee’s ability to model more than 25 energy generation and storage technologies. These include region-specific solutions like heat pumps in the UK, as well as wind farms, photovoltaic (PV) systems, battery storage, electric vehicle charging stations, gas turbines (both distributed and utility-scale), and conventional building heating systems.

The platform consolidates technical and economic data, such as performance characteristics, capital costs, and operational expenses, eliminating the need for manual data collection and significantly reducing planning time.

Beyond generation and storage, the software identifies infrastructure constraints, such as undersized transformers or cables, early in the design process. This enables users to plan for necessary upgrades and ensure reliable power delivery from source to load.

What’s next

As regulations change in response to evolving political and technological landscapes, the demand for resilient, decentralized energy systems is growing. Xendee is seeing strong demand for renewables, particularly from data centers, which now drive many microgrid projects.

While some markets have slowed, rising loads from AI and electrification continue to strain infrastructure. Xendee’s DER platform helps clients respond with optimized, future-ready energy systems, proving that the case for microgrids is both timely and economically sound.

To learn more or schedule a consultation call, visit Xendee here.