Ashden Awards 2016: Open Energi Case Study

To keep the lights on, National Grid has to keep electricity demand and supply exactly in balance, and when faults occur a rapid response is needed – within two seconds! Traditionally this was provided by gas and coal power plants running below full power, so they can adjust output quickly, but this is inefficient, expensive and increases CO2 emissions. Open Energi has developed an alternative – cutting-edge software which can automatically switch energy-hungry equipment on or off when required, without disrupting business operations.

Large energy users like water companies identify which items of equipment are not time-sensitive in their operation and this equipment can then increase or decrease its consumption within agreed parameters to provide a rapid response service to National Grid.

London’s spare gigawatt of power

London spare gigawatt of power

Lucy Symons, Policy Manager at Open Energi, explains how flexible demand could help power a sustainable future for London.

Projected population explosions in cities across the globe present urban planners with huge challenges. Between now and 2050, the number of Londoners alone is expected to increase from 8.6 million to 11.3 million, putting enormous pressure on energy infrastructure and requiring radical new solutions.

To meet the energy needs of 11.3 million Londoners in 2050, the Mayor is planning for a slew of new power plants as part of the enormous £1.3 trillion infrastructure spend earmarked in the London Infrastructure Plan. But there are alternative approaches to our current supply-side model that could deliver better value; we need to be original and also look at the demand-side opportunity.

Indeed, by taking a smarter, no-build approach to managing energy demand, London could shave off an eighth of the power currently used to keep the city’s lights on.

New modelling by Open Energi demonstrates that London has a whole gigawatt of ‘spare’ capacity in its current demand for energy: in-built flexibility that can be cheaply unlocked without the need to lay a single brick.

The challenge of matching supply with demand

London, like all mega cities, is still mostly fossil fuelled and this needs to change, fast. However, the rapid growth of renewable energy generation presents its own challenges, with spikes in electricity production that are often out of sync with times of high energy demand in homes and businesses; on a given day in winter, London’s energy demand peaks at 8GW between 4 and 7pm.

By contrast, at the height of summer, solar power supply follows the natural pattern of insolation- peaking at noon and in sharp decline by the late afternoon. Whatever the season, intermittency will be a persistent problem for balancing the London grid.

At present the generation infrastructure serving London is built to meet maximum possible demand. But with demand exceeding 7 gigawatts only 21% of the time, this is a hugely inefficient use of resources.

As London’s population grows, predicting electricity demand will be increasingly difficult. The GLA has forecast four scenarios, with demand in 2050 deviating from the 2015 baseline by as much as 30%. And this presents a major planning challenge.

Energy production local to demand

One approach is to throw more capacity at the problem, building London’s energy infrastructure for a theoretical peak that could be as much as 60% too high by 2050. Indeed, the Greater London Authority is already planning for local generation to meet 25% of London’s needs by 2025. Estimated total capital costs for this range from £50 billion to £100 billion.

While local generation undoubtedly has an important role to play, building 119MW of co-generation units requires space, which is already at a premium in London, and continues our reliance on carbon-emitting gas in a city struggling with air pollution.

And the challenge of building out clean supply-side alternatives is clear when looking at GLA projections for wind power for 2050, which depend on technological developments that will allow for small, decentralised turbines to be running right across the capital.

Flexibility local to demand

It’s a well reported fact that electricity margins are tighter than they have been for years and, as populations continue to grow, the need to balance energy supply and demand in order to mitigate the risk of power blackouts will be more important than ever. Grid agility and flexibility has traditionally been provided by building new supply assets, but a smarter approach can be found on the demand-side.

Demand response technology is, at its core, an intelligent approach to energy that enables aggregators to harness flexibility in our demand for energy to build a smart, affordable and secure new energy economy. True DSR technology invisibly increases, decreases or shifts 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 capacity margins in check.

Using over 5 years of data from working with businesses and National Grid to deliver demand response from all kinds of equipment –  including heating and ventilation systems, fridges and water pumps – right across the UK, Open Energi has modelled London’s industrial and commercial energy use to reveal an estimated 1040 MW of flexible demand that could be invisibly shifted to provide capacity when it is most needed.

This gigawatt of flexibility is electricity currently being put to use in powering London’s homes and workplaces between 4 and 7pm – with over half used in retail, commerce and light industry.

Harnessing this flexible power – a sizable slice of London’s 8GW winter peak demand – is not a technology problem. Right now, Open Energi’s Dynamic Demand technology is connected to 3000+ machines, invisibly and automatically reducing, increasing or delaying power demand, depending on available supply. Given that the bulk of London’s flexibility comes from non-domestic sites (large commercial buildings, retail and industry), using Dynamic Demand to unlock this 654 MW of flexibility could be the cleanest and most cost effective way to provide the power for London to operate, businesses to grow and its inhabitants to lead healthy lives.

As a direct alternative to building new power plants, Demand side response is an efficient way to optimise the existing generation infrastructure- shifting 1GW out of the peak would save the need to build a new mega power plant, equivalent to the size of Barking Power station.

From where we stand, powering London is a data-driven problem. The answer lies in decrypting patterns of flexible demand.

Analysis conducted by Remi Boulineau, remi.boulineau@openenergi.com

 

Ever ready: will batteries power up in 2016?

Open Energi Banner ADE

David Hill, Business Development Director, Open Energi

Open Energi tends to extol the virtues of Demand Side Response as a solution to the energy storage challenge.  It provides a no-build, sharing economy approach which is cheap, sustainable, scalable and secure.

By harnessing flexible demand and tapping into the thermal inertia of bitumen tanks or the pumped energy stored in a reservoir for example, we have created a distributed storage network able to provide flexible capacity to the grid in real-time without any impact on our customers.

But flexibility comes in many forms, and as the cost of energy storage systems tumble, it looks like 2016 might be the year when commercial batteries become a viable part of the UK’s electricity infrastructure, with recent analysis suggesting they could deliver 1.6GW of capacity by 2020, up from just 24MW today.

The price of energy storage systems is expected to fall sharply over the next three decades, with Bloomberg New Energy Finance predicting the average cost of residential energy storage systems will fall from $1,600 per KWh in 2015 to below $1,000 per KWh in 2020, and $260 per KWh in 2040.

As costs have fallen we have seen increasing interest from industrial and commercial customers keen to explore the benefits of installing batteries on-site and looking at systems capable of meeting 50%-100% of their peak demand – depending on their connection agreement (although it is worth noting an export licence is not a prerequisite).

In addition to providing security in the event of power outages, battery systems can help companies to reduce their demand during peak price periods, enabling them to seamlessly slash the astronomical costs – and forecasting difficulties – associated with Triads, and minimise their DUoS Red Band charges.

When they aren’t supporting peak price avoidance – which may be only 10% of the time – batteries can help to balance the grid – earning revenue for participating in National Grid’s frequency response markets. For example, discharging power to the system if the frequency drops below 50 Hertz and charging when the frequency rises above 50 Hertz.

National Grid’s new Enhanced Frequency Response market has been developed with battery systems in mind – requiring full response within 1 second – but isn’t expected to be up and running for a year or more.

In the meantime battery systems can generate significant revenues today via National Grid’s Dynamic Firm Frequency Response market, tendering alongside loads from companies like Sainsbury’s, United Utilities and Aggregate Industries, to help balance the grid, 24/7, 365 days a year.  And in the longer term the opportunity exists for companies to trade their batteries’ capacity in wholesale electricity markets.

With these saving and revenue opportunities in mind, we’re now at a point where battery systems can be installed behind-the-meter and deliver a ROI within 3-5 years for industrial and commercial sites. The ROI will be subject to certain factors, such as geographic location, connection size and of course the cost of the battery system itself, but these figures would have been unthinkable only a few years ago.

There are important technical factors to consider, including both the battery sizing in terms of its kW power rating and kWhr energy storage capacity, and also the underlying battery chemistry.  By taking into account the physical location of the battery along with models of different markets that it will operate in, it is possible to narrow down to the most appropriate technical parameters.  Another consideration is the gradual effect of wear and tear on the battery with continuous usage.  By analysing these effects it is possible to reduce some of the uncertainty around battery lifecycles (likely to be in the region of 10 years) and get better predictions of the likely revenue in each year of operation.

But whilst a payback of 5 years seems reasonable from an energy infrastructure perspective (where 15-20 years is more typical) for most companies used to a ROI within 2-3 years on energy projects it is not easy financing battery systems.

Some larger, capital rich companies may have the appetite and money to finance these projects themselves, but the majority of the companies we are talking to are keen to take these assets off balance sheet and finance installations via banks and other investors under third party ownership.

In these circumstances, managing the performance of battery systems – so that they meet their warranty and their lifecycle is maximised – whilst optimising their potential as a flexible resource able to cut energy costs, earn revenue and deliver a vital uninterruptible power supply  during outages will be key to their commercial success and scale of deployment.

The IOT technology meeting the UK’s grid balancing needs faster than a power station

Tech image

Chris Kimmett, Commercial Manager, Open Energi

It’s a well reported fact that electricity margins are tighter than they have been for a number of years and, as we move towards winter, talk will increasingly turn to the need to balance energy supply and demand in order to mitigate the risk of power black outs in the UK.

Almost all of the UK’s grid balancing has traditionally been done by coal and gas. But the EU’s Large Combustion Plant Directive has limited running hours at a number of plants and in the past twelve months both Longannet and Eggborough power stations, which currently provide around 5% of the UK’s capacity, have announced they will be closing their doors in 2016.

Add to this the solar and wind explosion – by the end of 2015 experts predict the UK will have 10GW of solar power, a benchmark most thought wouldn’t be reached until 2020, and by 2020 National Grid’s Future Energy Scenarios indicate that small-scale, distributed generation will represent a third of total capacity in the UK. This considered, we see that tomorrow’s electricity landscape will look very different to that of today.

The transformation of the energy system away from centralised generation to small-scale, distributed power means that speed of response to changes in energy supply and demand will be more important than ever.

Indeed, while most people are focusing on the tight capacity margin between supply and demand, the real blackout threat could come from generators being unable to respond within the required window to balance instantaneous shifts on the grid.

For more than 12 months, energy data analysts at EnAppSys have been monitoring grid frequency and analysing large deviations which, if not managed, can lead to instability. EnAppSys’ director Paul Verrill says that while we need to ensure the system has sufficient supply to meet demand, the real risk of blackouts could come from this second issue that often falls under the radar: a lack of capacity able to deliver additional power within the required timeframe.

Grid agility and flexibility will be essential as we move away from models of centrally dispatched generation, and National Grid, via its Power Responsive campaign, has already asserted that demand side response (DSR) will play an increasingly vital role in building a resilient, sustainable and affordable electricity system for the future.

This is especially pertinent given the results of new research by Open Energi, National Grid and Cardiff University, which suggests that smart demand side response (DSR) technology can meet the UK’s crucial grid balancing requirements faster than a conventional power station.

The latest research paper, which forms part of the ongoing collaborative research programme between Open Energi, National Grid and Cardiff University, titled Power System Frequency Response from the Control of Bitumen Tanks, looks at the feasibility of DSR to provide a significant share of frequency balancing services.

To test the scale of the opportunity for industrial heating loads to provide frequency response to the power system, bitumen tanks (which contain the glue that binds our roads together) equipped with Dynamic Demand technology were tested in combination with National Grid’s model of the GB transmission system.

Dynamic Demand deployed at scale is able to contribute to the grid frequency control in a manner similar to, and, crucially, faster than that provided by traditional peaking power generation – not to mention more cleanly and cheaply.

Field tests showed that full response could be provided in less than two seconds, as compared to 5 – 10 seconds for a thermal generator. Large scale deployment of Dynamic Demand will reduce the reliance on frequency-sensitive generators and ensure that the grid stays balanced in a cost-effective, sustainable and secure manner.

The research simulations help to shape National Grid’s understanding of DSR as a replacement for frequency-sensitive generation and will be used when they are planning their requirements for grid network operation in the future – with huge impacts on the future of our energy mix.

When launching Power Responsive, National Grid CEO Steve Holliday said: “The move to a low carbon economy coupled with rapid advances in technology and innovation are transforming our electricity supply. But supply is only half the story. The challenge now is to exploit new opportunities to radically evolve our energy system by changing the way we use electricity.”

And this is why the research findings are so significant.

With more renewables and decreased thermal generation, ‘inertia’ on the Grid will decrease, making frequency more unstable. To counteract this effect we need faster response, so by rolling out Dynamic Demand today we are future proofing the Grid.

With their new Power Responsive campaign, National Grid has recognised the need for a new source of flexibility and have stated they are committed to scaling the smart DSR industry.

Demand side response is intelligent energy usage. By knowing when to increase, decrease or shift their electricity consumption, businesses and consumers will save on total energy costs and can reduce their carbon footprints. It is the smart way to create new and efficient patterns of demand.

IoT technology meets UK’s energy grid needs faster than power stations

Aggregate Industries Moorcroft quarry

Research has found that Open Energ’s Dynamic Demand technology can meet the UK’s crucial grid balancing requirements faster than a conventional power station. The paper published as a result of ongoing collaborative research by Open Energi, National Grid and Cardiff University, titled Power System Frequency Response from the Control of Bitumen Tanks, looked at the feasibility of DSR providing a significant share of frequency balancing services.

Bitumen tanks (containing the glue that binds our roads together) equipped with Dynamic Demand were used in combination with National Grid’s model of the GB transmission system to investigate the capability of industrial heating loads to provide frequency response to the power system.

The conclusion is that Open Energi’s Dynamic Demand technology, deployed at scale, can contribute to grid frequency control in a manner similar to, and, crucially, faster than that provided by traditional peaking power generation. Field tests showed that full response could be provided in less than two seconds, as compared to 5 – 10 seconds for a thermal generator. Large scale deployment of Dynamic Demand will reduce the reliance on frequency-sensitive generators and ensure that the grid stays balanced in a cost-effective, sustainable and secure manner.

While a lot of focus has understandably been given to tight capacity margins between supply and demand, the real threat could come from generators being unable to respond within the required window to balance instantaneous shifts in supply and demand. With more renewables and decreased thermal generation, ‘inertia’ on the Grid will decrease, making frequency more unstable. Dynamic Demand can help to counteract this effect by providing faster response, helping to future proof the Grid.

The paper was published in the IEEE Transactions on Power Systems Journal. Download a copy here.

Dynamic Demand wins Innovation of the Year Awards

Business Green Leaders Awards

Open Energi is proud to have been awarded Innovation of the Year at the 2014 BusinessGreen Leaders Awards for its Dynamic Demand technology, a unique form of Demand Response which helps National Grid to balance electricity supply and demand on a second-by-second basis.

Now in their fourth year, the BusinessGreen Leaders Awards celebrate the leading businesses, executives, entrepreneurs, investors, and campaigners from across the green economy, highlighting how these pioneers are driving the emergence of innovative and sustainable new business models and technologies. The Awards were extremely competitive with over 260 entries whittled down to 130 shortlisted entries.

“Everyone at Open Energi is delighted and proud that Dynamic Demand has been recognised by the prestigious BusinessGreen Leaders Awards,” commented Open Energi Commercial Director, Ged Holmes. “Balancing supply and demand is vital to the operation and security of the UK electricity system and Dynamic Demand has a vital role to play in delivering clean, secure and affordable energy in the years to come.”