Open Energi: creating a ‘virtual power station’

Creating an energy system that is secure, affordable and clean across the UK requires us to utilise cutting edge technology and come up with innovative solutions. Open Energi is one of the firms working to solve the energy crisis through the creation of a “virtual power station”.

David Hill, Open Energi’s Business Development Director, explains, “We are working with large energy users to help build a new energy economy, which is clean, secure and affordable. We harness small amounts of flexible energy demands from their equipment, such as HVAC, chillers, pumps and ovens, and aggregate this to create a virtual power station.”

The National Grid needs to balance electricity supply and demand second by second, failing to meet demand could lead to blackouts while exceeding it could lead to equipment failure and technical problems. This means continuously monitoring demand and altering supply to meet peaks and troughs.

Traditionally the solution to this has been to rely on supply-side measures, such as ramping power station output up and down as demand changes. Open Energi describes this method as “costly, inefficient and polluting” because peaks only happen for short periods of the day, resulting in up to 40% of the UK’s energy infrastructure being underutilised.

As the UK continues to move towards climate change targets and decarbonise the energy sector National Grid’s flexible supply will diminish because renewables will play a greater role.

Hill states, “National Grid cannot press a button to boost wind output or make the sun shine more brightly just because we’ve turned our kettles on as EastEnders finishes. Building a more flexible demand-side is vital to maximise renewable integration.”

Open Energi’s Dynamic Demand provides an innovative solution to this problem. Dynamic Demand works by turning equipment into ‘smart devices’ that can automatically adjust their electricity consumption in line with available supply .

“So as we all turn our kettles on at the end of our favourite TV show instead of National Grid ramping up a power station to meet the surge in demand, equipment across the UK can temporarily power down, freeing up supply so we can all have a cuppa,” Hill continued.

“Because these adjustments only occur for a few minutes at a time, performance is never impacted; the service is completely invisible.”

Open Energi estimates that around 10% of all demand can be “quickly and predictably shifted” without impacting businesses. The solution also reduces the need for new capacity to be built, meaning it is cheaper and quicker than other options. For example, a peaking plant would cost between £0.7-£5 million per megawatt while a battery system would cost £0.5-£1.8 million per megawatt. In contrast, Dynamic Demand can provide a solution for only £0.2 million per megawatt.

The cutting-edge solution has led to Open Energi being among a handful of high tech companies from around the world participating in the Cognicity Challenge. The challenge is a Smart Cities initiative, run by the Canary Wharf Group, to identify and accelerate the development “of smart city technology products and services”.

In July this year, the company will also attend the Business Green Leaders Awards after being shortlisted in the Small Business of the Year category. The awards aim to celebrate pioneers in the green economy that are driving sustainable business models and technologies.

Diverting spending from power stations to UK businesses

Open Energi’s Dynamic Demand doesn’t just benefit the power sector; it also offers an opportunity for businesses to generate revenue.

National Grid currently spends around £1 billion a year on grid balancing and Open Energi is helping divert this spending away from power stations and towards the UK’s businesses. Open Energi’s business model encourages companies and organisations to become active participants in energy markets rather than simply consumers. Empowering consumers to increase their involvement in the energy market is a step towards creating a fairer and more transparent system.

Participating businesses can generate up to 5-10% of their annual energy bill without impacting performance, while helping to decarbonise the grid and build a more efficient and secure energy system.

Businesses are paid for their availability 365 days a year and as a result earn revenue regardless of how often their assets are needed by National Grid.

Over the last twelve months Open Energi has doubled its customer base, proving that the benefits are high while impact remains invisible. Among the businesses embracing and profiting from the demand-side solution are Sainsbury’s, United Utilities, Aggregate Industries and the University of East Anglia.

In addition to generating extra revenue, Dynamic Demand can also aid in energy savings. While the service is energy neutral all assets are monitored and the information is passed on to businesses. The increased data and visibility has been utilised by some customers to generate energy savings while other have used the revenues to fund other sustainability initiatives.

Looking to the future and Open Energi’s long-term aims, Hill said, “Our vision is to build a new carbon economy that is clean, affordable and secure. This means working globally, with cities, businesses and in our homes to offer demand response solutions that can create a smarter electricity system, which rewards sustainable actions without impacting our lives or work.”

Photo: David Hill

Further reading:

Plummeting renewable costs present ‘historic opportunity’ to build clean energy systems

UBS: solar set to transform energy system within 20 years

Wave energy has potential to be cheaper than wind

Survey: global electricity system could be 70% renewable by 2050

Scotland’s electricity system could be almost 100% renewable by 2030