Statkraft: When is a VPP not a VPP?


State-owned Statkraft is building a big stake in the UK flexibility market. It aims to bring businesses into its AI-driven virtual power plant and simultaneously sell them energy. Brendan Coyne reports

Statkraft has quietly amassed a gigawatt of flexibility in the UK. It plans to double this by the summer while building a pipeline of new distributed assets via its B2B supply business, Bryt Energy.

Duncan Dale, UK vice-president sales and new products, is confident Statkraft will shake up the flexibility market. He just wishes they could think of a better name. “Virtual power plant (VPP) doesn’t do the technology justice,” Dale suggests. “We describe it as a ‘flex aggregation brain’.”

Duncan Dale

Evolutionary tale

The platform’s origins lie in remotely controlling wind farms to avoid negative pricing, a growing requirement as renewables penetration increases. Statkraft’s team in Germany then developed software to automatically balance generation, rolling in weather forecasts and other market data and using robots to trade within-day.

Meanwhile, the UK team built code to optimise battery charging and discharge. Then they brought gas peakers into the mix, while the Germany operation added pumped storage. Pulling it together into “one algorithmic package” was a natural evolution, says Dale.

“It is like a brain that has evolved, making zillions of calculations a year to place flexibility where it delivers most value,” he says. “It is like a system operator and a market built into one.”


Dale believes the platform has “high growth potential” and thinks combining behind and front of meter assets with energy supply sets Statkraft apart in a crowded market.

“Why us? Because trading energy is what we do, especially renewable energy. We have a gigawatt of different types of flexible assets connected in 50 different locations, so our platform works,” says Dale.

Crucially, the Norwegian state-owned company has an A- credit rating, “so you know you are going to get paid,” he adds.

Other large energy companies are attempting to combine PPAs, flex trading and energy supply. Shell, for example, has launched and acquired energy retail businesses and will acquire VPP operator Limejump, a company Statkraft’s Ventures arm had invested in.

Dale is not overly concerned by competition, large or small. Competitors may find it is “difficult to make supply, settlement and trading systems work together,” he suggests.

“We are the largest offtaker of renewable energy and the largest long-term offtaker in the UK market. Hydro flexibility is also our core competency. Working with renewable and intermittent generation is our DNA and the VPP taps into that.”

Regardless of market and regulatory changes, says Dale, “we will invest and improve what we do, so that if a customer signs a long-term agreement they can sure that we are good for that now – and good for that in future”.

He points out that Statkraft, in various guises, has been around since 1895. “There are other IT companies [offering VPPs] with some very smart people on board. But they may not exist in two years’ time.”


Dale believes the VPP will quickly reach 2GW of flex by bringing existing customers’ wind and solar farms into the platform. But he says Bryt will also bring in megawatts by funding solar and storage installations for industrial and commercial firms.

He says business customers are receptive to the idea that a “flex aggregation brain” is working for them.

“They like that because [Bryt] helps with demand-side management, price, load, demand-side response and we can fund rooftop solar as well,” says Dale.

“The customer makes an immediate saving. We pay, it is off their balance sheet, and we deal with the landlord lease problems that many have.

“So it is a renewable offering that future-proofs customers from all the changes taking place in the distributed energy revolution,” he suggests. “Many are finding that quite compelling.”

Merging of markets

The VPP ‘brain’ works on both sides of the meter, stacking up ancillary services as well as trading in energy markets, says Dale.

“It needs to do both [aspects] because the ancillary market is moving shorter and shorter. National Grid is looking to procure up to day-ahead and we are seeing the merging of markets and services. It ultimately becomes the same thing.”

Alternative technologies

Statkraft recently struck a deal with flow storage company RedT. The immediate aim is to deploy up to 10MW of solar PV and 6MWh of flow storage at industrial and commercial sites, scaling up to 100MW over the next three years. It seeks contract lengths of 25 years and claims the funded solution will cut energy bills by 20%.

Dale says Statkraft will provide “a range of alternative battery technologies” to customers, though details remain under wraps.

Related stories:

Statkraft and RedT ink solar storage deal

Statkraft plans 2GW UK virtual power plant by summer

Statkraft to optimise revenues for 6MW Dorking battery

Statkraft eyes new retail and flexibility models

Norway’s Statkraft buys into Limejump

EDF and Statkraft join blockchain consortium

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