The number of low carbon technologies such as electric vehicles (EVs), heat pumps and energy storage batteries deployed in the UK continue to gain momentum in the race to net zero. These technologies are inherently flexible in their energy usage however, electricity market constraints are stifling this potential.
To help solve this issue, Axle has launched today (14 June) using its own energy flexibility platform (aimed at OEMs and energy suppliers) to help unlock the potential of renewable technologies.
According to Axle, its software dynamically provides flexibility to the electricity grid and shifts energy usage to when it’s cheapest and greenest. To find out more, Current± spoke to Karl Bach, co-founder of Axle, on the company’s aspirations and its technology.
Could you provide a bit of a background on Axle and how it fits into the UK energy space?
Axle is an energy flexibility startup. We connect EVs and home energy devices to electricity markets to help kick fossil fuels out of the grid.
The grid only works if electricity production equals electricity consumption. When the system isn’t in balance, electricity producers get paid to adjust their output up and down to meet demand.
Right now, that’s easiest with fossil fuels. It’s harder with intermittent wind and solar and as we all use more renewables, the grid gets harder to balance. Over the past 15 years, the annual cost of that balancing act has gone from £500 million to £4 billion in the UK, resulting in an extra 1.5 million tonnes of CO2 emissions per year.
This is where Axle’s energy flexibility platform comes in. Instead of using fossil fuels for balancing, we use EVs and other home energy devices like heat pumps and batteries. These are inherently flexible: the typical EV is plugged in for ten hours a day, but only charges for two, so you can shift those two hours around based on the needs of the grid — and the needs of the EV driver.
We aim to outcompete fossil fuels in balancing the grid. The volume is already almost there. Right now, the collective flexibility from EVs already on the road could replace the UK’s largest gas power plant. By 2030, EVs will have the capacity equivalent to every gas power plant. The challenge is connecting those millions of devices to energy markets while also ensuring they’re ready to drive when needed. That’s our secret sauce.
Axle focuses on connecting residential devices to flexible markets – how is this achieved?
When we talk about flexibility markets, we mean the services the System Operator procures to ensure that everyone is able to get the electricity they need. That’s typically an alphabet soup of different services to meet different needs: balancing, frequency, reserve, reactive power, and system restoration.
Each of these services has different uses and different participation requirements — but all of them were initially designed for fossil fuels. These complex requirements, along with the unpredictability of residential devices, mean that most residential capacity is untapped.
Our API solves all that complexity.
Energy suppliers and equipment manufacturers use it to quickly and systematically determine which services are most suitable for their customer base. Our software then handles the end-to-end process of delivering grid balancing: we connect the device to the market, predict the device’s flexibility, and offer that flexibility safely to the grid all while delivering on the customer’s expectations.
By optimising the combined flexibility of many home energy devices, we can lower residential customers’ energy bills by over 25%, while helping to remove fossil fuels from grid balancing.
What are some of the greatest challenges when trying to connect assets to flexible markets and how do you fit into the market to counter this?
Three things make what we’re doing hard. The first is technical, the second is systemic, and the third, behavioural.
Technically, we need to be able to connect to a device, understand its capabilities and requirements, algorithmically predict its behaviour, compare that to the needs and requirements of flexibility services, and steer those devices to deliver on the service. And we’re doing this reliably, programmatically, without requiring any additional hardware, at low cost, across national borders.
The systemic challenge is arguably even more daunting. We’re operating in a highly-regulated, highly risk-averse sector that is highly reluctant to change — people in the sector still consider ‘digitalisation’ a potential innovation! We’re seeing encouraging signs here — every System Operator in Europe is prioritising demand flexibility — but the battle isn’t over yet.
The final challenge is behavioural – people know they want cheap and green energy, but they don’t want to worry about the details. They think in terms of cold beers and hot showers, not in kWh or BTU. So we’re not looking to educate people to change their behaviour. Instead, we’re making flexibility attractive, automated, and robust. We make it easy for people to save money and CO2 without needing to think about it — it’s embedded in your charger or energy tariff, and you’ll always have enough battery for an emergency trip to A&E.
What agreements/partnerships have been secured already to help the business expand into the growing market?
We’ve recently announced our $1.6 million (£1.3 million) pre-seed financing round from Picus Capital and Eka Ventures. They bring deep expertise in renewable energy and consumer technology, and we’re delighted that they share our vision of a flexible, low carbon grid with consumers at the centre.
We’re also partnering with leading and innovative energy companies to connect their customers’ EVs and home devices with flexibility markets. We’re honoured to work with the likes of Pod Point and Easee, who are using their EV chargers to help the grid decarbonise. More to come — watch this space!
With the company having just launched, what do you hope to achieve in the coming years?
Our mission is to decarbonise the grid. We believe this requires a connected, dynamic, flexible grid, not the monolith we have today.
With our pre-seed capital, we’re expanding outside of the UK and diversifying support for devices beyond EVs. By the end of the decade, there’ll be 150 million EVs on the road, and many more heat pumps, batteries, etc. We want each and every one of these devices to support grid decarbonisation. We’re sprinting to make this a reality — we don’t have the luxury of waiting.