Making a success of batteries

Tech image

The surge in interest in battery storage projects has highlighted a fundamental change in the energy market, as commercially viable systems become progressively more available. We explore critical success factors, from choosing the right battery to managing state of charge.

The deployment of physical energy storage assets can broadly be separated into two project categories. The first kind of project consists of grid-scale assets in “front of the meter”, which are usually implemented by industry partners on large grid connections. The second type is “behind the meter” batteries which provide an added layer of flexibility to energy consumption patterns of sites already connected to the electricity network – and offer tremendous potential to unlock previously inaccessible revenue streams for industrial and commercial customers.

Both project types require different approaches to select the best battery type and optimise operational strategy and performance over time.

Selecting the optimal battery operating strategy

Battery flexibility has the ability to unlock several non-mutually exclusive revenue streams. For example, a battery can be used to reduce site demand (for “behind the meter” projects), or export to Grid (for “front of the meter” opportunities) during peak price periods, reducing costs associated with wholesale, Duos, Triads and Capacity Market levy charges. Outside periods of peak tariffs, batteries can participate in the frequency response market and earn a revenue from National Grid for helping to dynamically balance electricity supply and demand.

The characteristics of Battery Energy Storage Systems (BESS) differ widely between manufacturers, with important factors to consider including capital and operating costs, power rating, energy storage capacity, energy density, cell chemistry, operating temperature, round-trip efficiency, self-discharge, degradation profile and tolerance to various depth of discharge. All these parameters have an influence on the economic viability of the project, so it is important to select the appropriate technical solution for a given project.

Once the different parameters are known, the determination of the most economical operating strategy becomes an optimisation problem in response to an aggregated electricity price signal and a potential frequency response revenue, under several constraints such as the battery technical characteristics and the site operational constraints (existing demand/generation on site if any, and import and export capacity).

The operating strategy might change over time, for example because one component of the price signal has changed, or if there is a new opportunity for flexibility that is more financially viable than current revenue streams. In that case the optimisation process will be performed again and the operating strategy modified accordingly.

Battery State of Charge profile
State of charge profile of a BESS doing peak price avoidance from 4PM to 7PM and participating in the frequency response market the rest of the time. The energy stored in the system is maximised before 4PM in order to optimise arbitrage revenues.

Choosing the right battery

The next crucial decision is choosing a battery that is optimal for a given project and operating strategy. The goal here is to select the battery that will be commercially viable under the constraints of a given project. For a “front of the meter” BESS the main factors driving the battery characteristics are the Authorised Supply Capacity (ASC) for importing and exporting, the capital and operational costs and the electricity tariffs for import and export.

There are additional parameters for a “behind the meter” battery. As most of these projects are implemented in sites with no or a small export capacity, the battery would respond to a low frequency event by discharging power into the site, reducing its overall energy consumption. It is therefore crucial to forecast the demand on site to choose the optimal battery size and tender an accurate power availability in the frequency response market.

The same approach can be used for generating sites (like wind or solar farms) where there must be sufficient potential for export in addition to the generating activity on site. The potential energy savings are also dependent on the demand and the site constraints, which might in return drive the optimal power/energy ratio of the BESS.

Managing battery state of charge and maintaining performance

Once installed, the challenge is to manage batteries while ensuring high performance following the operating strategy selected. A requirement of entering the frequency response market is to be able to provide the power tendered for 30 minutes at a time, which highlights the need for a performant state of charge management.

There is an inherent efficiency in BESS, with average efficiency ranging from 75% to 90 % for conventional systems. When used in the frequency response market, successive cycles of charge and discharge will progressively cause a net discharge of the battery, and ultimately cause the battery to be fully discharged if no corrective actions are taken. Similarly, if several large high frequency events happen in close succession, a frequency-responsive BESS might reach a high state of charge at which it will not be able to respond to high frequency events anymore.

Battery charge management graph
State of charge of a 1MW/2MW.h frequency responsive battery. An appropriate state of charge management helps keep the energy stored in the battery at an optimal level over time.

A control strategy should ensure that the battery state of charge always stays within appropriate boundaries in order to meet its contracted obligations at any given point in time. It should also ensure that the total throughput of the battery (which is the cumulative sum of discharge processes over time) is minimised while in operation. A reduced throughput decreases the wear and tear of the battery, enhancing the BESS lifetime.

At Open Energi we are working with several customers to successfully operate batteries in the frequency response market, optimising their operating profile to maximise revenues, applying designed state of charge management techniques, while limiting the degradation of the battery lifetime to the lowest value possible.

 

 

Why the UK needs an energy security rethink

London at night
Sebastian Blake
Sebastian Blake, Commercial Analyst, Open Energi

Blackout Britain is a headline which has become increasingly common over recent years. Many argue that decades of under investment in generation infrastructure has left the margin between demand and supply in the UK desperately short, raising the possibility of network outages at times of high power demand. Given the blame that would be landed at the Government’s feet were the lights to go out, energy security has been given top priority over the other facets of the energy trilemma; decarbonisation and affordability.

The Government’s solution to this was to devise the Capacity Market as a mechanism to encourage investment in new power plants, with yearly auctions for participants who can provide capacity over the winter peak. Crucially, auctions are held four years in advance of the capacity ‘go live’ date, to guarantee revenue and give investors the confidence they need to build new power stations.

There are, however, major flaws in the thinking behind such an approach. There is much evidence to suggest that the UK is in fact well supplied with power station capacity, that building more stations is unnecessary and that running the system more efficiently on tighter margins is a good thing. And by ensuring there is sufficient power plant capacity to meet the instance of highest demand in the year other potentially greater threats to security of supply are being ignored.

The graph below shows the frequency of the UK grid, which is the primary indicator of the system stability. The network is in balance when the frequency is hovering around the 50Hz mark, however any significant variation either side is a sign of a serious imbalance between generation and demand and could result in a potential shutdown of the network. This isn’t a distant threat: whole towns had to be shut off as an emergency measure in 2008 when grid frequency dropped to 48.8Hz.

Grid frequency graph

In this case, we can see what happed to the frequency when a large supply source – an interconnector between the UK and France – failed, leading to more power being drawn by consumers than was being supplied to the grid. To counteract the resulting frequency drop and avoid a system shut down, a series of automatic measures kicked into action, including turning up thermal power plants (coal and gas) and sending water reserves cascading through turbines of hydroelectric plants.

More recently on the 9th May 2016 there were 37 significant failures across 27 different coal and gas plants as well as the France interconnector; with each one disrupting frequency and testing the grid’s resilience. At one point in the day National Grid issued a warning that insufficient spare capacity would be available in an hour’s time. This is too short notice for a thermal plant to start up (which takes around four hours) so not something the Capacity Market would have helped with.

National’s Grid’s Head of Commercial Operation Cathy McClay has said managing the grid frequency is becoming an increasing headache for our island system. However, the technologies traditionally used to respond in these situations look increasingly unfit for the role. The best new candidate is demand side flexibility – in the form of batteries and demand side response – which offers numerous benefits.

 Energy storage and demand side response offer five core advantages over traditional solutions

  1. Speed of response: Demand side response and batteries can deliver their full power in under 1 second from receiving a request from the network. By comparison thermal plants and hydroelectric generators need around 10 seconds. As the interconnector example shows, this difference is crucial for avoiding a potential network shutdown and will be needed more and more due to continued reductions in system inertia.

 

  1. Decentralisation: Demand side response and batteries are distributed technologies meaning a required level of response can be made up from aggregating together many smaller sites. We have seen how relying on large centralised technologies (like the undersea link to France) poses increased risk to system stability as they represent significant single points of failure. Thermal power stations fail on a daily basis so individual plants cannot be relied upon for response; whereas with distributed technologies this risk is shared across many assets; if one fails the whole service is not compromised.

 

  1. No need for spinning reserve: Traditional providers are only able to achieve the 10 seconds or so when starting from an already running position, hence the generators must be operating at some partial output to provide the quick response. This impacts fuel efficiency by around 10-20%, greatly increasing costs and CO2

 

  1. Flexibility: The network can only absorb as much power as there is demand, so at times of low demand, National Grid must turn down clean and zero marginal cost power from renewable sources like wind to accommodate the thermal generators which must be kept running for frequency response. Demand side response and batteries overcome this problem.

 

  1. Low carbon: By maximising the use of demand side response and energy storage technologies, the UK will be able to achieve further growth in renewable generation; while reducing its reliance on interconnectors and its exposure to volatile gas prices.

 

The high capacity fossil fuel plants which have historically been used to respond to the demands of the grid are increasingly unfit for purpose in a modern electricity network, yet the Capacity Market fails to encourage the development or implementation of smarter, cleaner and decentralised solutions which would provide a more efficient means of addressing both our energy security and other elements of the trilemma.

Neglecting these alternative solutions via the Capacity Market will undermine exactly the thing Government is trying to advance: security of supply. National Grid should be applauded for its efforts to implement change through its Power Responsive campaign – designed to encourage demand side participation in the balancing markets – but many policy makers remain locked into the old paradigm of an archaic industry; no doubt weighed down by the stranglehold of well-established energy incumbency (better known as the Big Six).

For these parties, using distributed assets to balance the system still represents a significant departure from the orthodoxy of constructing and operating a few large centralised assets like Hinkley Point C, which will deliver 7% of all UK electricity when completed.

To achieve a real paradigm shift towards a secure, affordable and low carbon economy, we don’t even need to find new solutions. Distributed and demand side technologies are ready to deliver; we now need to change the supply-focused mind set of our policy makers and operators.

By Sebastian Blake, Commercial Analyst, Open Energi

A smart, flexible energy system call for evidence – Open Energi’s response

Transforming the UK’s energy future

In November 2016 BEIS and Ofgem published a call for evidence for a smart, flexible energy system. Together they recognise that a smarter and more flexible system offers significant benefits for consumers and the economy and that to make these changes successfully will require a co-ordinated approach.

We are pleased to share the letter accompanying our response below:

12th January 2017

Open Energi is delighted to submit this response to the call for evidence.

It is clear that the UK electricity system has a pronounced and immediate need for clean, fast, flexible power. This flexibility is essential to security of supply; providing the first line of defence in the frequent event of successive power plant and interconnector failures – a far more pertinent threat to Great Britain’s energy security than a perceived shortage of capacity. With the National Infrastructure Commission suggesting consumer savings equivalent to a reduction in the average household energy bill of £30-90 p.a, expediting smart power is also essential to delivering energy at a lower cost.

The good news is that Great Britain has a thriving energy technology sector with a vast portfolio of innovations that can step up to this immediate challenge of providing system flexibility. Open Energi, a dynamic UK tech firm, is one such innovator- a ‘scale up’ rather than a ‘start-up’- testament to UK strength in encouraging digital innovation and investment. Open Energi has been providing frequency response through the Firm Frequency Response (FFR) market from demand side loads since 2010 with the technology trialled in domestic refrigerators before that. Our growing portfolio of customers and processes has given us deep experience of connecting to a wide range of assets, including batteries. Open Energi is an aggregator of choice; we have a culture of openness, integrity and honesty which is reflected in the agreements we have with our customers and the methodologies we use to deploy our technology.

Our aim is to help National Grid maintain a safe supply of power to the nation and help the UK achieve its sustainability goals whilst simultaneously creating a new revenue stream for our customers. We are working with over 40 organisations, many in the FTSE 250, whose power loads we aggregate and provision, including Sainsbury’s, United Utilities, Aggregate Industries, Severn Trent, Welsh Water, Hanson, University of East Anglia and Tarmac. Open Energi is also partnered with Younicos, Camborne Energy Storage, Arenko, Powerstar and ITM Power.

But, demand-side energy tech faces major barriers in UK energy markets:

There are different technologies that can provide flexibility and it is clear that these technologies are not treated equally within the current regulatory, policy and fiscal regime (Policy Exchange, 2016)

  • Demand flexibility can be provided by both demand side response and battery storage technologies markets must not discriminate between energy stored in a fridge or a heated liquid vs. energy stored in lithium ion cells. Regulations must also be careful to capture behind the meter storage where electricity is not re-exported to the Grid but is consumed on site. If both technologies produce the same effect at the transmission level then they should be rewarded the same by these markets.
  • UK energy markets continue to favour existing power generators to a disproportionate extent. To fully realise the potential of demand-side flexibility to help balance the grid, save energy and offer lower costs for consumers, we need a level playing field. Without it,there is a very real risk that we will lead ourselves into multi-decade contracts for power plants, paying for a system which is already over capacity and which has no incentive to get any smarter. Ensuring access to the Balancing Mechanism for novel technologies is the most crucial task for regulators to ensure the development of a low cost, efficient future power system; and hence should be prioritised over other policy and regulatory goals.

Industrial and Commercial (I&C) demand flexibility has the most immediate potential for scale as compared to domestic and residential markets which do not currently have the market incentives. Industrial and Commercial demand flexibility must be a priority for government action in line with the ambition of the planned Industrial Strategy.

  • Open Energi has been a pioneer in demand side innovation to achieve a portfolio of 20MW of fast, reliable and clean demand side availability. However, in partnership with our existing I&C customers we could be unlocking 300MW and a full market of 750MW for FFR across the UK grid.

Companies like Open Energi cannot prequalify for the government Capacity Market and cannot compete directly against gas plants in the balancing mechanism. The fast, flexible power they provide is instead only accessible via tenders and procurements.

  • Unlike other energy projects, demand flexibility requires no state subsidy at all.
  • All that we ask at Open Energi is that the regulations are updated to ensure ‘demand side’ (when we turn demand up and down) is given the same treatment as ‘supply side’ (when new power is generated) in the existing energy markets.
  • Flexibility is being unlocked today, but needs to scale to deliver transformational impacts. Our modelling shows there is a massive 6GW of untapped flexibility already available in our energy system, which can be unlocked by smart demand side technology to rapidly provide flexibility to the grid.
  • Open Energi believes that securing independent access for demand-side aggregators to the Balancing Mechanism should be a priority for government; this is the primary market for UK flexibility with over £800mn in transactions p.a., is ostensibly technology agnostic and is suffering from pronounced volatility that is set to increase with the growth of renewables.
  • Open Energi’s ambition to open the markets to unlock flexibility aligns with our belief that it is the role of aggregators to drive innovation through technology development; not simply to act as a market access intermediary. We see this role – as UK innovators – as defining and valuable, no matter how much competition is fostered in the retail supply industry.

Faced with the urgent need for flexibility in our rapidly evolving power system and with the tech needed to solve it bound only by markets that aren’t fit for purpose, there is an immediate opportunity to unleash competition. Applying market mechanisms in the UK could dramatically change the game for energy security on the GB grid as early as next winter. With over 1GW of energy storage prequalified for National Grid’s recent Enhanced Frequency Response tender, of which only 200MW was purchased, it’s clear we have the appetite from investors to bring innovation to market. The challenge now rests with government to make regulation fit for purpose in a modern age of energy technology innovation.

Sincerely,

Lucy Symons

Director of Public Policy, Open Energi

New EEF report: DSR should “be one of the first options” for electricity security

Metal company scores win-win of cash and cost savings

Under Theresa May’s Government BEIS has been tasked with delivering a comprehensive industrial strategy, ensuring that the UK has secure energy supplies that are reliable, affordable and clean, and tackling climate change.

The UK’s manufacturing sector has an important role to play but a report published this week by the manufacturers’ organisation, EEF, found that its members’ confidence in the Government’s handle on security of supply is tepid at best. Only one third of its members agreed with the statement that “the Government has a long-term strategy to ensure security of supply” and just 3.6% felt energy infrastructure had improved in the last two years.

The report “Upgrading Power: Delivering a flexible electricity system” makes a series of recommendations for Government to help manufacturers play a part in boosting UK energy security and improve how our electricity system operates. Demand Side Response (DSR) is identified as one of the first options that should be looked to in achieving electricity security.

As the authors note “Continuing to be over-reliant on supply side options and leaving DSR options untapped is rather like having the heating on at home, deciding it’s too warm and then opening a window rather than turning the heating down. Both actions will achieve the intended outcome but the former wastes energy and money.”

In a recent EEF survey only 9% of respondents took part in some form of DSR activity – compared with 29% in a recent cross-sector survey conducted by Ofgem – citing varied reasons from insufficient financial incentive to those that had utilised all of the available flexibility on their sites. However, by the far the most common reason given was the complexity of the system and resulting lack of understanding within manufacturing companies.

The report found that even manufacturing companies well versed in the DSR markets find the system bewildering and unwelcoming to new entrants. One company commented that “it is genuinely stressful to be in a regulatory environment alongside the big six”, further noting that energy companies have entire departments to deal with these markets, whilst even a large manufacturing company may have only one individual covering energy.

Those manufacturers who are engaged in DSR activities adopt a common approach and hierarchy to maximise potential savings and revenue streams. Where possible, companies will seek out opportunities to reduce exposure to higher power (wholesale) prices first, followed by minimising their network costs (Triads and Distribution red band charges) and finally participate in specific DSR products.

To help unlock the estimated 9.8GW of DSR flexibility available in the UK EEF recommends first increasing the number of businesses acting on straightforward price signals through time-of-use tariffs. Beyond this it calls on the Government, National Grid and Ofgem to look at what can be done to reduce the complexity of specific DSR services and regulatory barriers to entry.

Finally, it highlights the forthcoming ADE code of conduct for aggregators as an important step which will improve manufacturers confidence in these companies. Open Energi strongly supports this move. Aggregators occupy a position of trust and have a responsibility to educate businesses and be open and transparent about the benefits that exist.

Donna Hunt, Head of Sustainability at Aggregate Industries summed this up in a recent interview with edie, saying “businesses want to see what the value-case is. They need the confidence and trust in it. It’s not new technology but it’s perhaps not at scale yet. That’s a big reason why Aggregate Industries is proud to be out there talking about how it works. We should be doing more of it because we need a more responsive energy system that works for everyone.

“We need to prove that value-case, share knowledge and open doors. We just need there to be a level playing field between the aggregators to remove the confusion so people are clear about how they can engage.”

Unlocking the full potential of DSR is going to take time but National Grid is looking to source 30-50% of balancing services from DSR by 2020, creating a potential revenue stream for businesses of around £1 billion. As the world strives to find ways of delivering energy which is clean, affordable, and secure, the more that can be done to facilitate DSR participation – from business of all sectors – the better.

EEF Report: Demand Side Response Recommendations

  • The Government should investigate how to maximise the DSR benefits for manufacturers of smart meters, half-hourly settlement and time-of use tariffs.
  • National Grid, as part of its charging review and in consultation with industrial energy consumers, should seek to reform the Triad charging system to deliver greater predictability for industrial energy consumers.
  • The Government should explore the incorporation of DSR aims and related electricity cost reduction strategies into energy efficiency schemes such as ESOS.
  • National Grid, in collaboration with energy consumers and the Government, should seek to reform the ancillary market to reduce complexity and create greater transparency.
  • Ofgem should amend the Balancing Settlement Code rules to allow participation of DSR in the balancing market.
  • The Government should reform the Capacity Market to allow easier access for DSR assets in future auctions.

Download the full EEF report “Upgrading Power: Delivering a flexible electricity system”

 

 

Demand flexibility is putting consumers in control

Tarmac has installed Demand Side Response at around 70 sites UK wide

A smart power revolution is underway putting your business in control of how, when and from where it consumes its energy. At last week’s Energy Live 2016 Open Energi’s David Hill explored how technology can unlock demand flexibility to deliver maximum value from your assets  – connecting industrial equipment, batteries and self-generation – and coordinating their behaviour in real-time to turn the vision of a smarter grid into reality.

David was joined by Steffan Eldred, Senior Energy Optimisation Manager at Tarmac, sharing their approach to demand flexibility.

Download a copy of the presentation.

The move to a low carbon economy coupled with rapid advances in technology and innovation are transforming electricity supply and demand. Grid agility and flexibility are essential as we move away from models of centrally dispatched generation and incorporate more intermittent renewable energy generation onto the system.

This flexibility can be provided in a variety of forms, from demand side response (DSR) and energy storage to new build gas generation. However, there is a clear merit order emerging in terms of both the carbon and consumer cost of these offerings.

DSR is the cheapest and cleanest form of flexibility. At its core, it is an intelligent approach to energy that enables aggregators to unlock flexibility in our demand for energy to build a smart, affordable and secure new energy economy.

Flexibility Merit Order shows Demand Side Response is lowest cost optionThe technology can be used to invisibly increase, decrease or shift users’ electricity consumption, enabling businesses and consumers to save on total energy costs and reduce their carbon footprints, while at the same time enabling National Grid to keep the system in balance.

It is part of a wider energy market picture that must focus on flexibility and achieving the lowest cost for consumers. If just 5 per cent of peak demand was met with flexible power, the response would be equivalent to the generation of a new nuclear power station, without the huge costs to consumers.

Tarmac is one business benefiting from this approach. The company has been a pioneer of DSR, partnering with Open Energi to install Dynamic Demand on over 200 bitumen tanks at 70 asphalt plans across the UK. What this means is the heating elements in each of those tanks, which keep the bitumen warm, can switch on or off in seconds to help National Grid balance electricity supply and demand.

Collectively Tarmac’s tanks are providing the grid with capacity that can be shifted in real-time, so they’re able to use more when there is a surplus – for example when it’s particularly windy – and less when there’s a shortfall. Its enabling Tarmac to help build a smarter, more responsive energy system which is paving the way for more renewable power and reducing the nation’s reliance on fossil fuelled power stations.

 

 

10 myths about Demand Side Response

Sainsbury's deliver demand side response from its stores UK wide

Demand Side Response  is a vital part of our transition to a zero carbon economy and has the potential to transform how we use and deliver energy. But there are some common misconceptions about how businesses can get involved and what it means for them. To help cut through these, Chris Kimmett, Commercial Director at Open Energi, tackles some of the most common myths about Demand Side Response (DSR).

Myth 1: It’s too disruptive

This myth is especially prevalent in the press where headlines such as “UK factories shut down to prevent winter blackouts” are not uncommon. But this is a very outdated perception and technology advances have changed the game completely. There are lots of processes that have a degree of flexibility, where technology can be used to temporarily increase or decrease consumption without impacting performance, for example heating, cooling and pumping.

Take the air conditioning in a typical office building. It will be designed to maintain the temperature between certain bands, for example 18-22 degrees centigrade. Turning the unit on or off for a short period won’t have any discernible impact on the temperature and technology can automate its response so as soon as it approaches its upper or lower limit it stops responding.

Some demand is genuinely inflexible, such as lighting. The good news is that as battery costs come down, businesses can use these to participate in different Demand Side Response schemes and switch to battery power during peak periods.

Myth 2: It’s all back-up diesel generators

It’s true that there is a lot of back up generation participating in certain DSR schemes. Short Term Operating Reserve (STOR) is a good example; 93% of the response comes from generation and 22% (743MW) of this is from diesel. That’s because there are a lot of organisations with back up diesel generators which for much of the time are under-used, so it makes sense to earn revenue from these where possible. However, there is also a significant and growing portion of real demand participating across a range of markets, coming from all kinds of different equipment, including fridges, pumps, chillers, motors, and fans. To date, we have connected over 60MW of demand flexibility from these types of assets across the UK, of which around a third is usually available at any one time.

Myth 3: There isn’t enough value to make it worthwhile

There are lots of businesses out there participating in DSR who would disagree with this statement. In a recent Energyst Media survey, 81% of businesses said they participated in DSR to generate revenue and National Grid’s PowerResponsive website features a range of case studies. These businesses are seeing significant value from participating in DSR, not just in terms of revenue, but also because it is the right thing to do and it is supporting their organisation’s sustainability credentials. Accessing all a business’ flexibility means it should be possible to return around 5-10% of its energy bill in DSR revenue. National Grid has clearly stated its desire and need to grow demand side participation significantly, and its value is expected to increase over time.

Myth 4: It’s a winter peak problem

There is a winter peak problem and margins remain slim at around 6.6%, but National Grid increasingly faces challenges in the summer and with the year round second-by-second balancing of supply and demand. As more of our power comes from wind, solar and other sources of distributed generation over which National Grid has no control, it is having to cope with periods in the summer months where supply exceeds demand, often overnight or in the middle of a sunny day. Rather than pay wind farms to turn off, it has been using a new service called Demand Turn-up to encourage businesses to shift their demand to these periods to help absorb the excess energy.

A very different challenge is that of managing the real-time balancing of electricity supply and demand, which National Grid must do 24/7, 365 days a year. Whether a gust of wind means a surge in power or a gas plant tripping means a shortage, demand flexibility is cleaner, cheaper and faster than ramping power stations up and down in response. Fast acting real time flexibility is essential to keeping the lights on in the future.

Myth 5: Participating in Demand Side Response means handing over control of my processes

Absolutely not! It is not the place of DSR providers to tell you how to run your business and you should always retain ultimate control. This should be a fundamental part of how you approach DSR. We spend a lot of time working with our customers to understand their assets and processes and agree the parameters within which they want their assets to participate. Once a control strategy is in place, each individual asset is then able to decide if it can respond, and the technology will enable it to kick us out automatically if it reaches a point where it can’t.

The beauty of DSR is that because the response is aggregated from many thousands of assets, where one fridge can’t respond we know that a pump or a bitumen tank will. Added to this there is always an override switch which means the system can be disabled on site at any time.

Myth 6:  Demand Side Response is easy

It is getting easier, but it is certainly not easy just yet. As described above, much of the effort and resource is required pre-implementation, in understanding the assets and processes and developing a strategy to ensure there is no impact on operational performance. There is a lot of great learning happening in the UK and globally, connectivity is increasing, technology is improving, and we are starting to see equipment being manufactured “DSR” ready. These changes are making it easier for businesses to participate by the day.

Myth 7:  Energy storage = batteries

Batteries are very interesting and the cost curve has been plummeting – especially for Lithium-ion batteries. But energy storage comes in many forms; there is thermal storage in a fridge, in a building’s air conditioning or in a bitumen tank for example.

Working with Aggregate Industries, we have found that a modern, well-maintained and insulated bitumen tank – which stores the liquid bitumen used to make asphalt for roads at between 150-180 degrees centigrade – can be switched off for over an hour with only a one-degree change in temperature.

Similarly, the water pumped to a reservoir represents a form stored energy. If we can find these small amounts of stored energy in everyday processes and unlock this flexibility for National Grid, then we can start to deliver a transformation in how our energy system operates without the need to build new batteries.

Myth 8: There isn’t enough demand flexibility to make a difference

A number of recent studies have looked at this, including the Association of Decentralised Energy and the National Infrastructure Commission. Our analysis suggests there is around 6GW of demand that can be shifted during peak periods, and that’s real demand only, not including back-up generators. 6GW is more than the UK’s two biggest coal fired power stations combined, and almost double the proposed Hinkley Point C nuclear plant. Unlocking this flexibility means we can build fewer peaking plants, integrate more renewable generation and mitigate the effects of intermittency. It offers major advantages in terms of cost, network reliability and sustainability which is good news for the environment and bill payers!

Myth 9: It’s unreliable

In setting the Capacity Market Auction Guidelines, National Grid prescribed the reliability for each balancing technology class available. Demand Side Response was ranked as more reliable than Combined Cycle Gas Turbines (CCGT), coal, hydro, oil or nuclear power. For example, for a 100MW nuclear generator, National Grid estimate it can rely on 81.4MW being available, while for DSR they would expect 89.7MW to be available. Large centralised power stations do not necessarily confer reliability. By their very nature they represent large single points of failure with the potential to cause massive disruption should a problem arise. The aggregated nature of DSR which relies on many thousands of smaller assets working together has proved its reliability over many years.

Myth 10: I have no flexibility!

You probably have more than you realise. If you’re thinking about demand flexibility but not sure how or if it could work for your business, we recommend you:
1) engage the right people internally who know what equipment you have and understand how it is managed
2) find someone who understands the market
3) find someone who understands your industry and what you do

By overlaying the above in a meaningful you can identify how much flexibility you have and where you can use it in a way that doesn’t disrupt your business and delivers the value you need.

 

 

Energy Storage: unlocking consumer value

Storage London Skyline of Gherkin

David Hill, Director, Open Energi, discusses how a sharing economy approach to battery deployment can unlock value for consumers.

Energy markets are in the midst of a revolution and the arrival of commercially viable energy storage systems is accelerating this change.

When looking at how the market will adapt to this change, there are two broad options for the deployment of energy storage. The first is the introduction of massive grid-scale batteries in front of the meter, backed by utilities and other large industry partners. Such an approach would support the traditional, centralised model of energy supply where value is returned to industry incumbents.

The second option is a behind the meter approach where energy storage helps to fuel the growth of a decentralised system.  One which sees batteries distributed in every business and home and transfers value to consumers, putting them in control of how, when and from where they consume their energy.

Yesterday, at the BNEF’s Future of Energy Summit, I discussed why this is not only the most exciting vision, but also the smartest.

A sharing economy approach

By co-locating batteries on business sites, you are taking the same sharing economy principles revolutionised by Airbnb and Uber, and applying them to industrial equipment and infrastructure to unlock new income streams from existing assets.

It means there’s no need to buy up acres of land or invest in expensive new grid connections. Batteries are installed on industrial and commercial customer sites and tap into the grid via existing connections.

This also means they can interact with other business assets and processes, opening up new revenue streams and energy saving opportunities for end users. In this way, batteries can help businesses to maximise the value of their total flexibility by:

  • Cutting costs during peak price periods
  • Earning revenue from frequency response
  • Unlocking value from assets with zero flexibility
  • Trading capacity in wholesale electricity markets

Unlocking total flexibility

Take a supermarket for example. Without a battery, it could use flexibility inherent in some of its equipment and processes, such as refrigeration, air conditioning and cold storage, to participate in real-time frequency response. For example, automatically turning air con units down for a short period of time (90% of switches are for less than 5 minutes) when demand exceeds supply, or turning them up when there’s an unexpected surplus on the system.  Because there is stored energy in these processes, i.e. the thermal inertia associated with heating or cooling, it could do this without impacting the quality of its products or the comfort of its customers.

This still leaves a significant portion of its energy consumption “untouchable.” Turning lighting, tills or baking ovens off to avoid peak pricing periods wouldn’t go down well with customers. Batteries change the game completely; enabling a supermarket to charge its battery when costs are low, and power as much of its consumption as possible from the battery during peak periods, including non-flexible consumption such as lighting, tills and baking ovens. As peak price periods only account for about 10% of a day, the rest of the time the battery can earn revenues from frequency response.

Combining energy storage and demand side response in this way is the key to unlocking the total value of flexibility to consumers – and the potential of this flexibility to transform how our electricity system operates. It’s a combination which means we’re already seeing business models on industrial and commercial sites with an ROI of 3-5 years. Not bad compared to 15-20 years for a grid-scale generation project.

Smart technology platforms

Similar to the other sharing economy models that have been catalysts for change in their respective industries, underpinning this flexibility in the energy industry is technology. Decrypting patterns of flexible demand and making intelligent decisions on a second-by-second basis about how an asset should behave and from where it should consume its energy requires cutting-edge technology.

Open Energi is using the same mathematical techniques that have let machines defeat chess and Go masters to build a technology platform that can aggregate massive amounts of flexible demand – from industrial equipment, co-generation and battery storage systems – and take us closer to the reality of a smarter grid; one that is cleaner, cheaper, more secure and more efficient.

 

 

A smarter approach to energy is supporting sustainability at Tarmac

Tarmac Harper Lane image

Tarmac is the UK’s leading building materials construction solutions company, committed to delivering a sustainable environment for the future. Steffan Eldred, Senior Energy Optimisation Manager at Tarmac talks about the company’s approach to sustainability and how demand response fits in.

As a company with almost 7,000 employees serving over 15,000 customers we are always looking for solutions that can help us operate more effectively and sustainably. We employ a whole life approach to sustainability, which means that we are not just considering the impact on our extractive or production processes, we’re also concerned about how they perform in life and how they perform when they come to the end of their life as well, in terms of recycling or re-use.

We have identified four priority areas to guide our strategy; people, planet, performance and solutions. Energy use, carbon emissions and climate change fit firmly in the planet category, so that’s where demand response comes in, helping us be smarter about how and when we use energy and support our carbon reduction targets.

Intelligent demand response

Demand response itself is not a new concept. What I think is new is the number of schemes that are available for businesses to participate in and the wider understanding of how this can support our transition to a more sustainable energy future.

We first heard about Open Energi’s approach – which involves making very quick but short changes in consumption – a couple of years ago now and we soon realised that this could unlock a lot of new opportunities for us to participate in demand response using smaller pieces of kit. Individually they don’t have much impact, but with today’s technology we can aggregate these across multiple sites, and suddenly it becomes something very meaningful which provides a big opportunity for us, National Grid and the system.

The service Open Energi provides via its Dynamic Demand platform is known as dynamic frequency response. The service needs you to respond within two seconds for up to 30 minutes, but typically the duration is only 4-5 minutes at a time. It’s the most valuable demand response scheme you can participate in but it’s effectively invisible from an operational perspective and once installed, it runs itself.

It wasn’t until we’d undertaken a trial on three of our sites in the South East and seen the technology in action that we were convinced, and that’s the approach I’d recommend to anyone thinking of installing this type of intelligent demand response. We ran the trial for a few months and this meant we could see that it worked, we could see the benefits it would bring, but most importantly for us, we knew it could be installed and operated safely without any impact on our sites.

The results of the trial enabled my team to go to the business and get buy-in from all of our internal stakeholders, from the Operations Director through to the teams on site operating our plant. After agreeing on the strategy, the actual installation was quite straightforward.

Tarmac approached it like any other engineering project, and had a project manager from Open Energi coordinating directly with someone on our side to manage the roll out. We appointed regional champions who stayed actively involved in the project, and provided all of our site staff with detailed comms packs.

We started at the beginning of 2015 and by April 2016 Dynamic Demand had been installed on over 200 bitumen tanks at 70 asphalt plans across the UK. What this means is the heating elements in each of those tanks, which keep the bitumen warm, can switch on or off in seconds to help National Grid balance electricity supply and demand. Collectively our tanks are providing the grid with capacity that we’re able to shift in real-time, so they’re able to use more when there is a surplus – for example when it’s particularly windy – and less when there’s a shortfall. It means we’re helping to build a smarter, more responsive energy system which is paving the way for more renewable power and reducing the nation’s reliance on fossil fuelled power stations.

Greater visibility and control

Another benefit we have seen from the technology is greater visibility and control of our tanks. We’re now able to see remotely if a tank is on when it shouldn’t be or if there’s a maintenance issue. For example, one heating element may be broken causing us to super heat others.  Responding to these kind of issues promptly can help us operate more efficiently and the learnings we are gathering from across all of our sites is helping us to identify and share best practice. Lastly, but most significantly, it has had no impact on site operations or safety and this is the ultimate measure of success for us – that we don’t even know it is happening.

Based on the success of this first phase of work with Open Energi, we’re now working together to identify other equipment such as pumps and HVAC controls that will also be suitable. We’re also keen to share what we have learned and encourage more businesses to follow suit.

Large businesses have an important role to play helping the UK meet its carbon commitments, and it’s very empowering to think that by working together, businesses can help drive a positive transformation in how the UK’s energy system operates, for the benefit of everyone.

UK demand side flexibility mapped

United Kingdom Map - London's spare GW of power

Open Energi  has mapped the UK’s demand side flexibility to reveal 6GW of peak-shifting potential, and 750MW of dynamic flexibility available for real-time grid balancing.

Demand-side response is at its core an optimisation of electricity usage in order to increase the stability of an energy network. The additional flexibility provided by adequate adjustments of energy consumption has major advantages within the context of an energy infrastructure designed to meet occasional peak demands. It represents an already-existing, cheap, sustainable and efficient alternative to building additional generation capacity that is used infrequently.

Flexibility can be defined in different ways, and several of these definitions can also overlap. First we will investigate the peak-shifting flexibility, which we define as the potential for shifting electricity usage for one hour outside of the peak demand of a given winter day. Currently, this is typically a time period where extra generation capacity is needed to ensure Grid stability.

The estimation of the potential peak-shifting flexibility for the GB Grid was obtained by cross-referencing publicly available annual energy consumption datasets with flexibility profiles for domestic and non-domestic users. Open Energi successively manages assets for DSR in the I&C sector, and has developed a large insight knowledge of the associated loads’ flexibility. The installation costs in this sector are around £50,000/MW, which makes it a target of choice for an immediately available and cheap source of flexibility.

While tapping into domestic flexibility might reveal to be slightly more difficult and expensive than for large energy users, we accounted for this sector in order to give a complete sense of the potential size of the flexibility in the country[1].

The outcome of this analysis reveals that the GB Grid has a peak-shifting potential flexibility of 6 GW, split almost evenly between domestic (3.2 GW) and non-domestic users (2.8 GW). The flexibility results, normalised per area unit in order to identify geographical zones with high flexibility potential, were mapped at a Local Authority level. Unsurprisingly, peak-shifting flexibility correlates with areas of significant electricity usage, namely big cities such as London and areas where energy-intensive industries are present.

This highlights the fact that the development of demand response, along with the improvement of the global energy efficiency in large cities, is a key factor in improving the resilience of the local utility system to cope with peak demand. The ability to shift demand temporally also presents the advantage of being much easier and cost-effective for implementation in urban areas compared to additional generation techniques, such as embedded generation and fuel substitution.

There is a second form of flexibility that can be used to ensure the reliability of an energy network that we will refer to as dynamic flexibility. It consists in a real-time adjustment of power consumption in response to frequency deviation. This frequency regulation activity is a long-lasting opportunity to ensure Grid stability and reliability, and represents a needed enabler to the smooth integration of growing renewables generation sources such as wind and solar.

Our analysis shows that around 750 MW of dynamic flexibility in the non-domestic sector can be unlocked to participate in dynamic frequency regulation activities. This flexibility arises from assets whose power consumption can be shifted, without any consequence for the end user, in order to help balance the Grid at a dynamic scale.

It is important to note that dynamic and peak-shifting flexibilities are not mutually exclusive: an eligible asset fitted with the appropriate equipment can shift its power consumption for either usage. In the following we assume that on a given winter weekday peak-shifting flexibility is used for displacing demand away from the two hours peak (typically 17h.00 to 19.00) into the two subsequent hours, while dynamic flexibility is used during the 20 other hours. We calculated that on a given winter day the potential CO2 savings represents 1560t CO2e per day for peak-shifting flexibility and 3900t CO2e per day for dynamic flexibility.

If we extrapolate the potential CO2 savings of the 750 MW dynamic flexibility operating annually 24h per day this increases to 4860t CO2e per day, and we obtain a figure of around 1.7 million tonnes of C02e saved per year.

Unlocking flexibility means we can build fewer peaking plants, integrate more renewable generation and mitigate the effects of intermittency. It therefore offers major advantages in terms of cost and network reliability and sustainability. Open Energi‘s technology is able to access this flexibility by dynamically and invisibly shifting energy consumption patterns.

[1] In order to extrapolate the total latent flexibility in the GB Grid, we assumed electricity users that have similar annual energy consumption have comparable flexibility; and contribution to peak demand is correlated to the annual consumption of electricity.

Webinar: Living Grid – calling pioneering organisations

Sunshine through tree tops - green energy

The Living Grid is a movement that aims to create a new approach to our energy system.

On the 18th May at 11.30am, Forum for the Future and Open Energi are co-hosting a webinar as part of Energy Live Online, to share more details about the Living Grid and invite businesses to participate.

Pioneer organisations, including United Utilities, Sainsbury’s, Aggregate Industries and Tarmac, are working together, and calling for others to join them, to create an electricity network that takes inspiration from nature to deliver, store and use electricity in the most optimal way possible.

This will make our system more compatible with the abundant renewable sources of energy around us, helping us achieve a 1.5-degree world and making our energy system ready for the future.

Is your organisation a pioneer?

Can you help drive the Living Grid movement forwards?

Join this webinar to find out:

  • What the Living Grid is
  • How your organisation can get involved
  • What the benefits are for you

Speakers:

Martin Hunt, Head of Networks and Partnerships, Forum for the Future

David Hill, Business Development Director, Open Energi

To register, please click on the ATTEND button in the panel below.