Turning down demand

Demand flexibility is changing the way businesses use their power. In the second part of our look at award-winning energy innovation, we hear from a company that has created a “virtual power station”.
Published —
14.08.17
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ITS software can automatically switch off power-hungry appliances, saving clients money and helping the UK to cut emissions.

And now Open Energi says its award-winning system is generating a surge in revenue.

The London-based company has installed Dynamic Demand at more than 400 sites and is on course to increase turnover from £750,000 to about £1.25m in the current year.

It works by monitoring grid frequency and reacting to fluctuations by remotely turning clients’ equipment up or down.

It gets paid for the service by National Grid, which must maintain stable system frequency to avoid safety mechanisms disconnecting generators from the grid and causing power cuts. Open Energi then shares the income with clients such as retailer Sainsbury’s and water supplier United Utilities.

The energy market live feed supplied by reuters at the Tempus Energy head office in Central London [Image: Andrew Aitchison/Ashden]
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Not only does it reduce their energy bills, it can lead to lower carbon emissions overall, as judges from sustainable energy charity the Ashden Trust acknowledged when they handed out their annual energy innovation award last year.

The National Grid control room [Image: Andrew Aitchison/Ashden]
National Grid has a legal duty to keep system frequency stable [Image: Andrew Aitchison/Ashden]

Currently the grid requires fossil fuel power stations to run below full power so that they can quickly increase output when demand rises, or respond to unexpected generator outages.

“This reduces efficiency, increases CO2 emissions and limits the amount of renewable energy that can be connected because the power stations providing this service cannot be turned off,” the trust said.

But creating more flexibility in large customers’ demand can create more room for renewables on the grid. The trust explains: “It is not the amount of energy time-shifted that counts, it is the available capacity, as it is this that increases the stability of the grid.”

Open Energi’s commercial director David Hill says the publicity generated by the award helped the company surmount its biggest obstacle: convincing customers to hand over control of appliances such as air conditioners, freezers, water pumps or bitumen tanks to his company’s smart tech.

“We now have more than 30 contracted customers,” he says. “The nice thing about having that trust is it gives you a great foundation to build on.”

Open Energi's dynamic response equipment in operation at a water works

Operations with Dynamic Demand have created 20MW of flexibility, along with another 2MW via battery storage.

Demand flexibility is likely to play an increasingly important role as the UK goes through decarbonisation. All coal-fired plants are scheduled for closure by 2025, creating a greater reliance on the volatile output of renewables.

Industry veterans might point out that the 22MW flexibility enabled by Dynamic Demand thus far is dwarfed by that of modern gas turbine stations, which offer as much as 20 times that.

National Grid might turn down a fleet of stations by up to 100MW to provide frequency response.

However, research commissioned by Energy UK, the industry body representing suppliers and generators, suggests as much as 20% of peak demand could eventually be shifted. Its members who contributed to last year’s report Pathways to 2030 report believed demand-side response would play a key role in improving efficiency and reducing wholesale prices by driving down average generation costs.

The growing use of batteries is also expected to play a role. Dong Energy’s announcement in June that it would plug its Burbo Bank windfarm, off the Merseyside coast, into a 2MW storage system was seen as a landmark moment.

And Open Energi is already working with customers to employ batteries to maximise revenues from frequency response. Its technology has been integrated with a 500kWh Tesla Powerpack operated by Camborne Energy Storage at a solar plant in Somerset, storing energy generated during periods of low demand and releasing it when demand peaks.

A young woman uses a Futurepump solar-powered irrigation pump
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In this way, Open Energi is working on AI and machine learning that can manage assets to enable clients to take advantage of both wholesale price fluctuations and the capacity market. The latter pays suppliers in advance to provide back-up in times of extraordinary demand.

Last month, the government published a smart systems and flexibility plan which promised to update rules in support of innovation such as small-scale low-carbon generation, storage and smart tech. It was billed as an “opportunity to increase productivity at home, and put the UK in a leading position to export smart energy technologies and services”.

Meaningful policy changes are still required, insists Hill. Only when those developing new tech such as demand flexibility are on a level footing with incumbent energy firms will British businesses and consumers be able to benefit from greater efficiency, he argues.

But he says the importance of demand flexibility is becoming more widely recognised.

“It’s an incredibly exciting time,” he says. “The value of flexibility is going up. We are beginning to see academics and even businesses are saying ‘this can work and it can be much cheaper’.”

A year on from its Ashden success, Open Energi finds itself in line for two more awards.

The company’s work to automate asphalt producer Aggregate Industries’ machinery is one of ten projects in line for the Association for Decentralised Energy Innovation Award of the Decade, as it marks ten years of handing out annual prizes. And Open Energi’s Dynamic Demand 2.0 is also up for the association’s Visionary Project Award.

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