Open Energi and Forum for the Future urge firms to join demand-side response ‘movement’

April 26, 2016

maxresdefault — Bristow: All technology providers welcome.

Aggregator Open Energi and sustainable development organisation Forum for the Future have launched The Living Grid, a platform to drive uptake of demand-side response and battery storage.

Open Energi clients Aggregate Industries, Sainsbury’s and United Utilities, are already onboard and the group wants other large companies to join what it is calling a “movement”, rather than a demand-response association or lobby group. Tarmac is also a supporter and collectively, the aggregator’s clients supporting The Living Grid represent 39MW.

The aim is to bring around 20 large corporates under the banner by 2020, and The Living Grid hopes to represents 200MW of flexible power at that point.

That deadline coincides with National Grid’s goal of achieving 30-50% of balancing services from demand-side response rather than through power stations by 2020.

While Open Energi is the founder technology partner and its clients the founder members, Giles Bristow, Forum for the Future’s director of programmes, hopes other aggregators will join the Living Grid and further its aims. So far, it has had discussions with Tempus Energy and a UK battery storage start-up about joining the group. Distribution Network Operators (DNOs) are also welcome to participate, says Bristow.

“Having one technology partner is a risk, but we genuinely want to bring in more technology providers – they might be on the generation side, might be in storage, might be other demand-side technologies too. The more the merrier – this is about critical mass and creating as much positive movement as possible.”

Pushing for change

It is “definitely not” a lobby group, says Bristow, “but [a forum for] telling positive stories that the proof of this type of technology is now low risk. I think that has been a barrier to people in the past. People worry about their kit and processes. But the internet of things has shown these are pretty low risk. So it is being part of a movement that is greater than the sum of its parts.”

“It’s a movement of forward-thinking organisations who want to bring a new approach to the energy system. The future needs to be quite radically different and we want to help prepare the ground for it.”

Fees and funding

While Forum for the Future is a charity, The Living Grid will be funded by a cut of the revenues that National Grid pays aggregators and participants for balancing services.

“At the moment there is no membership fee, [the funding] comes through our contract with Open Energi – and other technology providers in the future – so Open Energi is meeting our management costs,” says Bristow. Some of that money is put into an innovation fund to “further The Living Grid’s aims and to showcase other technologies,” he adds.

“We really hope Open Energi is the first of many technology providers, and that [its clients] are the first of many large corporates to join,” says Bristow.

Post COP21, he says, it an opportunity for the latter to demonstrate their commitment with “actions, rather than hollow words”.

Traction

The move comes as the development of the demand-side response market begins to accelerate.

National Grid has launched several new schemes, some of which have been over-subscribed. Meanwhile, aggregators are trying to scale their businesses to meet Grid’s ambitious targets, and energy suppliers are launching demand-side products to help them balance renewable portfolios, which have recently become more expensive to manage due to changes in market balancing and settlement rules.

At the same time, the government is planning reforms to the capacity market’s transitional arrangements which could mandate a minimum amount of demand-side response rather than generation being allocated contracts. It is also proposing to lower the threshold for market entry to 500kW, which would mean more entrants in the aggregator market.

The changes come as more and more businesses are moved to half hourly metering and settlement. This will expose them more fully to time of use tariffs for electricity, with potentially significant cost implications.

Those changes clear the path for increased take-up of demand-side response and storage, which the recent National Infrastructure Commission report said should be prioritised by government.

Find out more about The Living Grid here.

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