Aggregator Flexitricity claims its virtual power plant (VPP) has reached 500MW – and predicts a boom for the sector.
The firm said a 15MW asset signing up to provide flexibility in National Grid’s new ODFM footroom service took it past the half gigawatt mark.
Founder Alastair Martin said the milestone topped off the company’s most successful year to date.
“This demonstrates that there is a huge opportunity for flexible energy users and generators to help the National Grid meet the energy demands of the UK, and to earn from doing so,” he said.
Martin applauded the government for legislating to decarbonise the economy, but added that “reducing emissions is one thing; committing to eliminate them is quite another”.
As such, he said the firm expects to see “further dramatic growth in the demand response industry as energy users, distributed generation and battery storage increasingly come together to support the grid and help the UK reach its emissions targets”.
Acquired in 2014 by Swiss utility Alpiq, Flexitricity launched in 2004 as one of the first wave of firms to aggregate decentralised generation and flexible consumption, known as demand-side response. It was first to the GB market. Enernoc, now Enel X, launched in the US in 2003.
The firm moved beyond ancillary services and into merchant markets last year, acquiring a supply licence primarily to trade in the balancing mechanism, which offers a much deeper pool of value (£1bn+) to assets that can meet its requirements.
This year, National Grid ESO has had to work much harder to balance the system due to exceptionally low demand as a result of Covid-19 lockdowns. As such, it expects to spend an extra £500m over summer, largely via the balancing mechanism.
The ESO has committed to be able to run the grid entirely on renewable sources whenever possible by 2025. To do so, it will require significantly more sources of flexibility, such as demand-side response and storage – up to 10GW, according to some.