Demand-side response (DSR) firm Upside Energy has secured £545,000 of seed funding from investors to expand its management team and run a pilot project with National Grid.

The company is aiming to sell balancing services to grid operators by aggregating DSR from households and small businesses.

The UK based start-up originated in the Nesta Dynamic Demand Challenge, a so-called ‘hackathon’ to stimulate the creation of new DSR products, technologies and services.

Its service will make use of energy stored by devices its customers already own such as electric vehicles, batteries attached to solar panels, domestic heating systems and back-up power supplies for IT equipment.

Upside Energy has already received grants totalling £810,000 from the Department of Energy and Climate Change and Innovate UK, among others.

The company has been testing its technology for several months and started a real-world trial four weeks ago, using Innovate UK’s funding, which will last for another six to eight weeks.

It is hoping to begin the National Grid pilot later this quarter, getting 1MW of DSR signed up by the end of 2016. It then plans to start commercial operations at the beginning of 2017, and is aiming to reach 27MW of capacity in the first 12 months.

In February Danish firm Dong Energy launched a DSR service for its business customers.