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Utility Week 7th August 2015

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UTILITY WEEK | 7TH - 13TH AUGUST 2015 | 21 • 6GW Upside calculates that it could make 6GW of storage capacity available today by harnessing the battery potential of existing UPS systems installed by businesses Operations & Assets The big number: Tors stage 2, the proof of concept model "If a DNO pays 20 per cent of the price of the battery and the homeowner pays the other 80 per cent – it's now an economically sensible decision for the homeowner, but the DNO gets the benefit of all that battery capacity for 20 per cent of the capital cost." Graham Oakes, founder of Upside TM Upside's proposition: the distributed battery Upside intends to help resolve the UK's energy secu- rity worries and diminish the infrastructure invest- ment challenge ahead of generators by realising the potential of energy stored in existing industrial batteries – and also in domestic electricity storage systems as these begin to be adopted. Upside calculates that there is around 6GW-worth of power available via the exploitation of uninterrupt- ible power supplies (UPSs) in the UK today and has developed software that would allow it to manage the charge and discharge of these UPS batteries remotely. This means that at times of peak demand, Upside could take demand from UPS owners – mainly busi- nesses that own UPSs in case of power failures – off grid. The company is currently conducting a pilot scheme to prove the feasibility of this proposition at scale. This project has around £700,000 of funding from Innovate UK and the Department of Energy and Climate Change. Upside's business model has potential value for several groups: For UPS owners and energy consumers, this proposition would mean receiving regular payments for not using grid energy at times of peak demand. Perhaps even more valuably for businesses, they would receive a free battery testing and maintenance service from Upside, making their business continuity plans in case of a power outage far more robust. For domestic energy consumers, Upside believes that by empowering households to provide high value balancing services, it can significantly reduce the payback period for domestic batteries and play into the emotional drive for domestic generators to "self- consume". For National Grid, Upside will provide frequency response services. Today National Grid supports about 8 per cent of its frequency response require- ments via demand response. Upside wants to double that, a service it thinks will be worth between £20 million and £30 million a year. For Distribution Network Operators, the offer is peak shaving, and the ability to avoid reinforce- ment costs. Upside hopes that its proposition will make it attractive for DNOs to subsidise the uptake of domestic batteries – primarily in tandem with solar PV installations. Theoretically, a DNO could replace capital spend allocated to reinforcement with a sig- nificantly lower expense in battery subsidy to achieve similar resilience. For energy suppliers, Upside's plan is to help manage their imbalance charges when half-hourly settlements become the norm. Upside will be able to provide granular visibility of what imbalance charges for each half-hourly period are likely to be and will be able to shift demand in order to reduce those charges. Effectively, Upside will bid to shift demand at a cost that is less to the supplier then the potential imbal- ance charge for the period, thereby providing them with a saving. Utility Week's Game  Changer series  seeks to champion  disruptive  innovation in the  utilities sector.  To put forward  a technology for  coverage contact  assistant editor  (insights) Jane  Gray, email:  janegray@fav- house.com life, this partnership should prove that an office employ- ing around 50-60 employees with a UPS for its servers can "take 10KW of load off the grid very easily". The proposition will open up the opportunity for businesses to have a pleasant experience around their energy use. Rather than just being billed for consump- tion, they will receive regular, if modest, payments. As a bonus, Upside will alert them as to the conditions of the battery in the UPS. "The classic failure mode on a UPS is that the first time you use it, the battery is dead because a battery only has a defined lifetime," explains Oakes. "If we're testing that battery every week, then we're able to tell the business what the state of the battery really is – so there's a maintenance benefit to them which is probably more valuable than the money we give them." While business customers' UPSs are one side of the story, Upside's real customers are in the energy industry, and it is working on a range of value-added products for as many players in the sector as possible. The scope of its offerings could expand if domestic storage takes off, and also as electrified transport and distributed energy generation gain traction. Oakes is ambitious for his start-up firm. It will run tri- als to prove its proposition at scale later this year, and is in the process of recruiting the senior management team it needs. But as well as the commercial opportunity, Oakes is also driven by a belief that Upside can address some of the fundamental quandaries the UK's tradi- tional, asset heavy energy infrastructure faces as it grap- ples with the trilemma of affordability, sustainability and security of supply. His thinking – which he expressed in Ofgem's recent consultation on non-traditional business models – is that: "The [UK energy] industry is not very good at sweat- ing its assets. "The grid was built with a massive emphasis on reli- ability and a huge amount of redundancy, and therefore has created risks for itself because it means the cost of investment is so high. It's so hard to justify investing because you've got to allow for that excess reliability. You've got to find a way of – not loosening the risk man- agement, but managing the risk differently – so that you look at systemic risk, not subsystem risk. "If you do that, then you can probably find ways of getting a better risk-reward trade-off that would make it more attractive for investors."

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