Follow the launch of the follow-up to its popular demand response product Dynamic Demand, Clean Energy News caught up with Open Energi technical director Michael Bironneu and commercial director David Hill to discuss the platform’s development, demand response’s role in the energy transition and how it will change in the future.
Q: How has Open Energi looked to develop Dynamic Demand 2.0, and what’s contributed to it?
Michael Bironneau (MB): Historically Open Energi has been involved in the control of thousands of distributed assets, and in order to do that we often had to do a lot of very manual work to model the asset or understand its control philosophy. Once we'd done that, we still had to understand how to predict its performance characteristics and forecast when it would be available to us. That's why our data science team is one of the largest in the business.
When we started to develop this platform, we thought if the world wants to get to a place where we have 100% renewables, we're going to need a lot more flexibility. That means we have to be able to scale our service and doing things manually just doesn't cut it, even by applying machine learning techniques on a site-by-site basis. So not only do we have to consider how we achieve that massive scale of automation, but we also have to look at how we can get more benefits from the sum of the parts.
So we started to consider a self-learning and more automated approach. To illustrate that, if you have one chess master who's playing against eight opponents who, according to their Elo rating are eight-times less likely to win a game, you'd still bet on the master to win those eight games. It's the same kind of insight where we can leverage the seven years of data we have across our assets to achieve a slight edge over the control that allows us to do this.
Then we set out to put that into place using the latest IoT standards to make sure the platform could be as flexible and open for other parties as possible. We've also made some progress in stacking multiple projects with multiple benefits, for example be able to transition an asset from performing FFR for National Grid to helping suppliers balance out their portfolio at the request of their real-time trading team. Being able to combine those two completely seamlessly means we can unlock a lot more value from this flexibility.
David Hill (DH): Over a period time [of running Dynamic Demand 1.0] we discovered that the flexibility markets were becoming far more dynamic and at different periods of the day we needed to do different things with that asset to extract the most benefits. The most obvious thing is between 4pm and 7pm, instead of doing FFR we want to be shifting as much demand out of those periods to avoid TRIADs and red zone prices.
Increasingly, and we see this as an exciting part of our transition, we have effectively linked up our flexibility with electricity traders of our customers so they can begin to see that and dispatch with the benefit of their electricity trading. The only reason we've been able to do that is by proving to our customers over the last seven years that we can be trusted to flex their assets without impacting their productivity.
Q: Has demand response changed at all in that time?
DH: I think the last eight years has been dominated by pioneering first-movers in the market and people looking into demand response in certain areas, however I think demand response is definitely becoming one of the most talked about parts of the electricity value chain and is being talked about as prominently as renewables now. But businesses don't know what it means and what processes they should be looking at.
It really boils down to three core areas - optimising process assets, on-site generation and battery storage. We've got experience of managing all three of those asset classes and we can now put together the most optimal solution to try and maximise the amount of flexibility a customer has at any given time.
Q: What have been some of the main barriers to bringing this enhanced solution to market?
MB: Bringing all of those different asset classes together was a huge barrier. Trust was also a huge barrier. Going into the water and utility sector with this proposition a few years ago, to gain their trust especially in a regulated industry was very difficult and time consuming.
But once that barrier's overcome - and they see the benefit - then it's a lot easier. It's been a difficult journey in gaining customer trust, and then of course retrofitting our processes onto potentially 40-year old assets in the worst case.
Q: It seems to be tailored for where the UK power market is headed, do you feel this particularly resonates with pieces of legislation like the Clean Growth Strategy?
DH: Very much so. You can never totally predict the way in which the electricity market is going to operate in but there were some very clear indicators a few years ago that flexibility was only going to become more valuable. How we commercialised that flexibility is a very dynamic problem - what's valuable today might not be valuable tomorrow - but the ability to shift megawatts to different hours of the day is going to have enduring value as we bring more and more renewables online.
That's one of the reasons we spent so much time - and Mike's team particularly - discussing how we can create the most flexible platform that's trying to understand exactly how many megawatts we can shift at any given time and from any given process so we can come to market and say 'this is what we have, what's the best thing to do with it?' because the markets will evolve in ways we don't know. But having our customers to be responsive to those changes is the most valuable thing.
MB: I would say as well our platform, in terms of technology, there is no limitation that says it has to be the UK market. The price signals are almost abstract, it doesn't matter where they're coming from. There's nothing in here that limits us to the UK market.
Q: Is there anything that Open Energi feels is needed on the policy front to take demand response to the next level?
DH: This is always a quite challenging question and I feel like my answer is probably quite boring, but consistency is more interesting than any silver bullet. As a company you try to operate against the parameters you’re giving and create a platform that will deliver the best return on investment and the most exciting benefits from what exists today.
There are individual things within every different area of the market - be it the national grid system, the distribution network, our access to wholesale markets - each individual area could definitely be better, however a certain level of consistency is what businesses like us are more interested in.
MB: I totally agree with that. If you just look at one slice of the market, like the ancillary services market, I think there are 26 or 28 of them at the moment, and National Grid is undertaking a rationalisation of those. I think that's moving in the right direction, to get everyone on the same, level playing field and make sure more demand response can participate in the future.
Q: This might be a hard question to answer, but what might have to be factored into or feature in Dynamic Demand 3.0?
DH: One inevitably in the way the market is moving is it's becoming far more decentralised, and the ability to buy and sell power will become a more decentralised proposition - so who, where and how you buy your power will become a more dynamic process. So therefore having the ability for our customers to reveal how much flexibility they have and who they sell that to will be prevalent in how we ramp this up.
Revealing that flexibility to a broader range of market participants, whether it's the distribution network, a business next door, or a local energy supplier. At some point, there's always going to be someone close to you that wants that unit of flexibility more than someone else and being able to be part of that decentralisation is something we're quite excited about.
MB: Something which isn't there yet but will be there in the future is, as the system gets more decentralised, even at a domestic level, you could start to see that flexibility being traded as a kind of normal capacity from peer to peer. This is already something we do within our platform, trading flexibility between different sites for a specific client, but in the future as the scale of decentralisation becomes bigger, you can possibly see this operating at a system level.
DH: I would just add as well that something we're trying to transition the demand response market towards is, traditionally demand response has seen the role of an aggregator going to customers, selling technology and that market stuff back - you being the trader and the tech provider. Increasingly we're seeing the role of demand response turn businesses into net energy providers in certain areas. What we're trying to do is give our customers full control of this technology.