KrakenFlex – formerly known as Upside Energy – was acquired by the Octopus Energy Group in 2020, a move which CEO Devrim Celal says has given the company the resources to grow significantly as well as become more involved with things such as UK energy policy.
“We couldn't do that as Upside Energy in the past because we were smaller and had limited capacity, but within the Octopus Energy Group, we're able to do a lot more forward thinking and almost informing of policy as opposed to working alongside policy,” Celal tells Current±.
KrakenFlex is a software company that manages distributed energy resources (DERs) such as electric vehicles (EVs), heat pumps and batteries to match real-time energy demand and supply. The company delivers services such as frequency response, the Balancing Mechanism and Dynamic Containment.
The need is there for the types of services KrakenFlex offers due to the number of generation points in the UK having grown significantly, with over a million generation points now distributed all through the system, compared to around a decade ago when the UK had under 4,000 generation points, the vast majority of which were thermal.
As the UK moves away from thermal – which Celal describes as a totally controllable, flexible generation system – to one that is reliant on wind and solar and therefore intermittent, forecasting “becomes very challenging, and never perfect”.
“When you move from the old world, where you could have run it on an Excel spreadsheet, and a few old, cranky systems, you need something that's brand new. That's what we do.
“We are that brand new system that can manage massive scale in real time, and super complexity, where humans can't make decisions anymore. You need systems, both to make those decisions and execute them as well,” he says.
Celal explains that KrakenFlex stays close to National Grid and the distribution network operators (DNOs) so the company is able to respond to their requirements very quickly, while also developing opinion pieces and having discussions with the regulator and operators about “how you do the next level”.
Since the acquisition by Octopus, KrakenFlex has grow eight times over, going from 180MW contracted to approaching 1.5GW- which Celal says would be higher if 2GW of Octopus Renewables assets are included. Those are due to be on the KrakenFlex platform within the next three to six months.
Explaining this growth, Celal says: “I think we're at a point where people realise you can't live without flexibility, but also having the reputation and balance sheet of Octopus Energy has been useful.”
The two have integrated since the acquisition, with Celal stating that it’s now all about taking Octopus Energy’s 3.2 million customers – many of whom are already on a smart tariff – and pulling them onto the next generation tariff, dubbed Intelligent Octopus.
This is a “really easy user experience”, Celal says, giving the example of smart charging of electric vehicles (EVs). Consumers can register their EV on an app, put in their preferences i.e. the range and time they need their car charged by, and then KrakenFlex matches that with elements like electricity prices to determine the best time to charge that car.
The benefit of this for consumers is the reduced price for charging using the tariff, while for Octopus Energy, it’s expected this will attract a new audience, with EV uptake growing rapidly.
KrakenFlex is planning on expanding into a number of markets throughout the course of this year. Already, the company has announced a partnership with Norsk Hydro’s Hydro REIN for several projects across Europe and North America.
Indeed, the company is to be in Canada from this month with Norsk Hydro, in Texas with Octopus Energy in around April/May, as well as Sweden, again with Norsk Hydro. The company also has deployments earmarked for Japan towards the end of the year.
However, Celal says that there are elements of the UK energy system that are ahead of its European peers.
“When I talk about Dynamic Containment to system operators in Belgium, Germany and Australia, they are blown away.”
He adds that Dynamic Moderation and Dynamic Regulation are the “perfect next steps”, but adds that National Grid ESO is going to need to look more closely at synthetic inertia.
He references ideas already being talked about, such as using solar inverters overnight, wind turbines and battery storage.
A new Grid Code modification is enabling renewables to provide ‘grid forming’ or virtual synchronous machine capability to the grid, with this including inertia.
“Beyond that, I think National Grid will have to look at constraint management a lot more creatively,” he says. This should not just be curtailment of larger wind farms in Scotland, but also looking at things such as electric vehicle batteries.
Research from LCP earlier this year found that an increase of 20GWh of battery storage could reduce the amount of curtailed wind power in Great Britain by 50%, with wind curtailment between Scotland and England are expected to cost consumers £1 billion per year by 2025.
Meanwhile, the 4D heat project, which concluded in 2020 and was led by SSEN and National Grid ESO, found that up to 540GWh of curtailed wind could be used for domestic heating across off-gas grid Scotland in 2030.
For KrakenFlex, however, the focus is very much on the growth of the platform. Celal says the company is learning a lot, and looking at how to internationalise the platform and deployment models.
There are plans in place for deploying small teams in different geographies, looking at the culture and operational models in those countries to determine how the company grows the team, although the Manchester tech hub, set up by Octopus Energy in a bid to make the UK the Silicon Valley of energy, will remain the main hub.
Overall, however, Celal says it's been "an incredible growth journey" so far.