Explore this article and audio – a glimpse into FORESIGHT's depth

Join our global community of experts, contribute your insights in commentary and debate, and elevate your thought leadership. Get noticed, add value – be part of FORESIGHT's engaging discourse. Join us today.

Consumers’ role in flexibility is built on trust

The energy transition requires more flexible grids, but this flexibility can deliver benefits to consumers and grid operators. FORESIGHT spoke to Devrim Celal, chief executive at Octopus Energy’s flexibility platform provider KrakenFlex, about these developments and wider business model innovations in the energy sector

Failing to increase the level of flexibility on the power network will jeopardise the energy transition


Achieving global climate goals will require everyone to do their bit. However, it is hard for the average electricity consumer to contribute to the energy transition without a helping hand from technology. KrakenFlex, an energy flexibility management platform acquired by UKs Octopus Energy Group in 2020, aims to provide such assistance by making it easier for consumers to save money while contributing to demand response programmes. Flexibility in energy systems means having the ability to match demand to available supply, practically the opposite of the turn-it-up-when-you-need-more model that has dominated grids to date. While KrakenFlex and flexibility markets, in general, are still starting out, early experiences show this capability is not just good for grids and consumers but will also be essential in achieving the energy transition. FORESIGHT Climate & Energy (FCE):
What are you able to do with your technology?
Devrim Celal (DC):
Around 2010, just before we started KrakenFlex, the UK had about 3800 generation points. They were all central, big power plants with generation transmitted over transmission and distribution lines unidirectionally to millions of meter points. Fast-forward to now, the UK has over a million generation points and globally we have tens of millions of generation points. Energy is not central anymore. It’s really distributed and embedded in the distribution network. The flow is bidirectional. Solar and wind don’t conform to our demand profiles. They are intermittent, which makes balancing electricity with a high renewable generation mix hard. You have to be clever. You need intelligent software that can monitor everything, from rooftop solar to the way you charge your electric vehicle and the way you use your batteries, to maximise the use of the greenest and cheapest electrons throughout the system. That’s why we built KrakenFlex. It’s a software platform that can monitor, control and optimise any kind of energy resource. Recently, we launched Intelligent Octopus to support the latest-generation consumer proposition. Our first target customer group is electric vehicle owners. The car owner can sign up to the tariff using our app, register their car and their charge point and allow us to control those. And then we say: What would you like to have?” I think that’s a question that a utility has never asked any consumer. Often, the response is: I would like my car to be 100% charged by 7am tomorrow morning.” That preference is set and a large majority of consumers never change after that point. This way, we’ve just unlocked the flexibility of consumer charging. Otherwise, a large number of electric vehicle owners go home and plug in their cars during the most expensive and the most constrained periods. If we stick with the basic tariff or flat rate, that’s a disaster scenario for the network operators. Because we know the consumer’s preference and have a view of prices in the wholesale power markets and network constraints, we can optimise the charging schedule. We can meet consumer objectives by charging with green electrons without causing problems for the network. FCE:
What would be an average saving of somebody who’s on this scheme versus somebody who just plugs in when they get home?
DC:
This will change, but at the moment we’re offering a 75% discount on the regular tariff for the electrons going into the car. FCE:
How important is it for consumers to take part in demand response schemes?
DC:
If you look at the UK, grid, today we have 60 gigawatts (GW) of flexible power that can be turned on or off at any time. As we electrify heat and transport, we’re going to need about 220 GW of flexible power. And a large part, about 80 GW in the UK, is going to come from consumer flexibility. Unless we can build trust so consumers allow companies like us to make sure they can go to work in the morning by charging their cars, we’re not going to be able to deliver that 80 GW of flexibility. That also means we won’t be able to deliver the energy transition. FCE:
What energy assets are you targeting with this technology?
DC:
In the household, we focus on large controllable loads: your electric vehicle, your heat pump and battery. I don’t think we will go into kettles or washing machines or fridges. In different regions, we’re looking at split-unit air conditioners and other large controllable loads like electric hot water tanks and smart thermostats. FCE:
If you had vehicle-to-grid technology, allowing cars to send energy back to the electricity network, what kind of benefits would that yield for grid operators and consumers?
DC:
We’ve done a trial with Powerloop. We had 135 Nissan Leaf vehicle-to-grid-enabled cars, which equates to a megawatt of power, the entry point for the UKs Balancing Mechanism market. We’ve demonstrated that you could deliver services from consumer-owned, vehicle-to-grid-enabled EVs into the Balancing Mechanism. We’re aiming to do the same for smart charging as well. FCE
: What sort of level of consumer acceptance would you expect for something like this?
DC:
I am quite positive. In these early days, people buying electric vehicles are all looking for a cheaper way of charging those cars. The most important point here is consumer trust: being open, transparent, knowledgeable and having their best interests at heart helps earn consumer trust. FCE:
What other new business models are you seeing in the energy space?
DC:
There are many consumer devices that we can use to create system flexibility, but there aren’t widely used connectivity standards for these. So, one business model that’s starting to pop up is companies that become API [application programming interface] factories. We work with these companies when we are aiming to allow consumers to benefit from many different types of devices, as they can integrate with many different types of devices. Another [model] is a business that we’ve built called Electric Universe, which is an electric charge point roaming card and map that is billed using Kraken. They have over 300,000 charge points around the world connected to their card. Users only need this one card to access hundreds of different chargers and get all their bills standardised and sent alongside their electricity bill. •


TEXT
Jason Deign