Open Utility has secured £412,500 funding from BEIS Energy Entrepreneurs Fund (EEF) to develop a groundbreaking new online marketplace for local electricity flexibility trading. The marketplace will help Distribution Network Operators (DNOs) play an active role in managing local smart grids: seen by many as a key missing piece in the transformation to a decentralised and decarbonised energy system.
With the rapid rollout of distributed renewable generation, storage and electric vehicles DNOs are facing unprecedented congestion problems on the local network. Open Utility’s platform will help DNOs transition into active “Distribution System Operators” (DSOs) that can procure customer flexibility to reduce congestion at specific times and locations; as a cost effective and agile alternative to network reinforcement.
Online marketplaces like Airbnb and Uber combine intuitive web design with scalable resource optimisation algorithms to lower barriers to entry and unlock the value of underutilised assets. Open Utility is leveraging the power of online marketplaces to solve one of the biggest challenges facing the energy industry: enabling DNOs to become DSOs.
Open Utility has built up a track record of innovating on a global scale. The flexibility marketplace will join their first product, a peer-to-peer matching service for renewable energy suppliers, which is already operational in the UK, Italy and the Netherlands.
According to a report by BEIS and Ofgem, a smart and flexible energy system could reduce UK electricity generation emissions and realise up to £17-40bn of savings by 20501. These benefits come from better optimisation and operation of the system which avoids or defers network reinforcements, avoids generation build, and avoids curtailment of low carbon generation. Highly scalable services that enable customer participation in local flexibility services is fundamental to unlocking these benefits.
The rapid growth of electric vehicles (EVs) will have a particularly big impact on the local electricity network. Flexibility trading platforms will play a key role in enabling EVs to co-ordinate their charging schedules with the DSO, so the decarbonisation of transport does not require £billions of electricity network reinforcement which ultimately would have to be borne by bill payers.
Local flexibility marketplaces are mentioned as being a focus for innovation funding in the BEIS Smart Systems and Flexibility Plan. With the £412,500 grant to Open Utility, BEIS are demonstrating that they are keen to turn words into action.
Ian Marchant, former CEO of SSE and investor in Open Utility, is supportive of Open Utility’s developments. Ian says: "As the energy system evolves into one that is decentralised and decarbonised the role of the local distribution companies will change fundamentally. Local and peer to peer energy and flexibility markets with play a leading role in this change and I am delighted the BEIS are sponsoring this key piece of preparatory work with Open Utility"
DSOs are beginning to trial novel approaches for procuring customer flexibility. Most notably, UK Power Networks announced in August 2017 that they were launching tenders for customer flexibility in 10 areas covering 13,000 postcodes in London, East Anglia and the South-East 2.
However, DSOs face several challenges in making local flexibility procurement a success. They have little experience in engaging with customers, as historically they were an invisible part of the energy supply chain. Without high levels of participation in their tenders, they cannot guarantee any benefits over traditional reinforcement. Open Utility’s solution can help DSOs interact with the long tail of flexibility providers to maximise participation in their tenders.
Tender processes need to become fully automated if they can eventually scale to cover the 1.7 million postcode areas in the UK. They will also need to coordinate with the System Operator, who needs to maintain overall control over national system balancing. Open Utility’s solution utilises resource-optimisation algorithms to manage this complexity and has interfaces to other interested parties like the System Operator.
We are speaking to a number of DSOs to join the trial later this year.
A key goal of the project is to lower barriers for providers to take part in local flexibility trading. The benefits are increased revenue opportunities which are uniquely available for distribution grid connected assets.
We will be running a consultation to engage with the flexibility community to ensure that the service fits the needs of a wide range of stakeholders, including demand-response aggregators, battery manufacturers, energy suppliers, distributed generators, project developers, electric vehicle manufacturers and technology suppliers.
Open Utility is becoming a global leader in software infrastructure for decentralised energy through their Piclo Platform. The flexibility marketplace will become the latest service to be offered on the platform.
The first commercial service on the Piclo Platform is a peer-to-peer (P2P) energy matching service for businesses who want to buy from local renewable generators. Open Utility trialed the P2P service through funding from a previous EEF award from the government in 2014, and subsequently launched a commercial version with Good Energy in 2016. Open Utility is now setting up trials of the P2P matching service in Italy in partnership with ERG and in the Netherlands in partnership with Essent.
About Open Utility is an ambitious software company based in London. In 2015 Open Utility launched their flagship Piclo® peer-to-peer energy marketplace for UK business customers with their first partner Good Energy. In 2017 Open Utility is expanding the Piclo® service in selected international markets. Open Utility has secured £1.5million of funding, including grants from DECC and private investment from Ian Marchant, former CEO of SSE. Open Utility has been named by Bloomberg as one of the UK’s top 50 Business Innovators and won Startup of the Year at European Utility Week. More information is available at: www.openutility.com/piclo
1 Upgrading Our Energy System: Smart Systems and Flexibility Plan, BEIS and Ofgem, July 2017, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/633442/upg rading-our-energy-system-july-2017.pdf
2 Flexibility Services: Invitation for Expressions of Interest, UK Power Networks, http://www.ukpowernetworks.co.uk/internet/en/have-your-say/documents/Flex_EoI_Aug17.pdf
Piclo develops software to make electricity grids smart, flexible and sustainable. Chaired by Volker Beckers, the London-based company has been building solutions for the energy industry since 2013, having secured investment from the Green Angel Syndicate, Mott MacDonald Ventures and the Clean Growth Fund. Piclo Flex is the leading independent marketplace for flexibility services.
Piclo Flex simplifies the end-to-end process for System Operators (SO) to source energy flexibility from Flexibility Service Providers (FSP), with over 12GW of flexible capacity registered. Since 2018, Piclo has supported the business-as-usual flexibility procurement of six of the UK DNOs and is commercially contracted with UK Power Networks, SP Energy Networks and Electricity North West. https://www.piclo.energy/