For flexibility company Limejump, 2021 got off to a busy start, adding 170MW of assets to its virtual power plant (VPP) by the middle of February.
It was a tumultuous period for the energy sector, with high demand and low wind causing record high pricing, and further emphasising the need for greater flexibility in the system. In particular following on from 2020, when the demand hit record lows while renewables surging, leading the ESO to bring in a number of mechanisms like the Optional Downward Flexibility Management (ODFM) service.
Almost a year since she took over the reins, Current± caught up with Limejump’s chief executive Catherine Newman to discuss capitalising on the changing market, Dynamic Containment and working as a scale-up.
How have you seen Limejump change and grow over your first year as CEO?
It's been a really interesting year, the ODFM product came in very shortly after I started so we had to really move very quickly. We've got a raft of new, different products coming in in the flexibility space from National Grid- we're not in Dynamic Containment (DC) right now but that's been a conscious choice on our part. People who are in DC are there partially; we made a choice that we're going in fully, with a full suite of sub-millisecond requirements that are needed.
We also made a commitment to Penso, with the 100MW Minety battery in Wiltshire that's coming online next month, that we will be taking them to DC first, and we'll be there ready to stack with the other products when we take that in. So that's been a really important focus for us.
I think in terms of other aspects of the market we're thinking about the longer term piece. So when you think about the beginning of this year, there's been so much movement with the uncoupling of the day ahead market, with EPEX and N2EX, that's been a really big change, and we've been able to react to that very quickly. And we've had some crazy pricing, with the BM clearing at £4000/MWh.
It's been a very crazy start to the year but we've increased our capacity in the grid now, so we’re at just over 1.35GW in terms of our capacities available to us, and we're now managing over 350MW of flexible assets in the portfolio.
We did the numbers at the beginning of the year and I love this stat, we have now been optimising assets for over 38,000 hours. Those kind of stats I think tell a real story about Limejump and how far we've come. We've been around managing flexible assets now for the last five years. There's nobody else in the market that's been doing it for that long.
Could you tell me about how Limejump’s trading desk works?
We've always been very passionate about tech- we have to be cutting edge with that kind of stuff. But you also need to have that trading element. One thing we did bring in this year, is we went to full 24/7 with people on the desk. Not 24/7 in the sense you get a phone call if something trips, we have people 24/7, trading actively throughout the market, and that's brought a lot of money for some of our customers through the door. So it's been a very challenging but exciting.
We've got such an experienced trading desk- we move very quickly. We integrated our trading desks with Shell's trading desk this year too, so we are managing a far larger portfolio now as well. We've had huge successes in that collaboration, really proving all our unique offering of automation and traditional trading can deliver to our customers and create that flexibility to the evolving grid needs.
With going into the ODFM last year, how would Limejump like to see it change or adapt this year?
We've just asked for as much forewarning as possible. I think National Grid ESO said the cutoff was going to be 6pm but they need to give us as much warning as possible. It's such a tight timeframe to enable people to react.
And also I think we've put forward that you've got to stop contacting customers directly. It really messes everything up for everybody because then they don't know if they're talking to the people that are managing their asset, is it National Grid that they should be talking to? We need really clear lines of communication.
There are so many other ways I think National Grid wants to try to manage flexibility this summer. We have got more batteries coming on the grid, and we want to be trying to charge more rapidly rather than turning off a wind or a solar asset. That isn't a financially sensible thing to do. And I think we've also submitted that we thought we should be building any of the charges for ODFM into the sit price.
Could you expand a little more on why Limejump chose to hold off on entering the DC market?
DC was postponed last year, and then was brought back in October. By that point, we'd made a decision that our portfolio was getting so big, I really wanted to focus on more strategic pieces in terms of a longer term view.
Now we're working with Shell, we're being asked to look after a bit more of the portfolio there. To be able to optimise and manage portfolios, the size we're getting to requires a little bit more focus and that's very much what we've done. There’s some really great prices at the moment for DC, and that part is disappointing. But if you're always going for the first shiny thing that's around it's not necessarily the best thing to do for longevity.
We're a scale-up now, we're 100% owned by Shell, but we're still very much a scale-up. I feel very lucky that Shell have made the decision to keep us at arm's length, to let us continue to do what we do, because they recognise that from a technical standpoint, if they touch us, they'll destroy us, and we're doing fine. So we can use the best bits of each other rather than trying to stifle our creativity and agility.
So I mentioned during a panel [at the Energy Storage Summit], DC is great now, but towards the end of the year it'll be filled. It's 1,100MW National Grid has now said for the summer, 800/900MW for the winter. By the end of November, prices will start to normalise a little bit more, but then there'll be something else that comes along. Short Term Operating Reserve (STOR) is going to be next. We're going to get various other different things, and I wanted to look at that stack as a whole, not just DC.
If we're going into DC, maybe for block one we want to go to DC, for block two we want to go into FFR and then for three and four we want to trade it, then for five we want the triad. If you are thinking about how you monetise your assets best, you have got to look at a combination of all those different things. Also looking at making sure we're getting the proper reporting for our customers.
One of the things I'm really proud of is we're not just an aggregator; I don't class us as an aggregator. We are more of a full package, we are more of a route to market provider. So we will buy your PPAs from you, we will optimise your flexible assets from both an algorithmic and a trading perspective, but we also have an engineering team. Our engineering team help set up different metering for people, we've got site developers that do site design, they do metering design, they do all of that stuff, which can then hook into our tech and really give customers the insights on how their assets are running, how their metering is running, making sure that they're recycling things.
Which is a really big problem in the market with some of the maybe not-so-experienced people, they'll actually spank people's assets, and then they're out of warranty. You need to be really careful in terms of how you're managing people's assets and having that time to have a little bit more thought, to not actually race into something for change.