A 'virtual power station' equivalent to the electricity generation of a gas-fired power station, is being created by UK Power Networks. New contracts for energy capacity worth £30 million are being awarded to 17 innovators in the energy, tech and car sector including Octopus Energy, Electric Miles and Ohme, making it the UK's largest-ever 'Flexibility' tender. The far-sighted move is creating new opportunities for batteries and renewable energy with 77% of the capacity coming from low carbon sources.
Creative technologies from smart cable chargers to digital apps that manage your EV charger will harness distributed energy resources including electric vehicle batteries and demand side response. Together they will create a virtual power station to help manage increased demand for electricity at peak times at lower cost, as customers shift towards low carbon energy technology. For further information see the IDTechEx report on Distributed Generation: Off-Grid Zero-Emission kW-MW 2020-2040.
More than two thirds of the new capacity (248 Megawatts) will come from using electric vehicles' batteries and smart charging when they are hooked up to the power networks.1 Flexibility providers who have been awarded contracts by UK Power Networks will now recruit up to 25,000 EV owners to support the network in this young and growing market.1
UK Power Networks, already the largest company to sign agreements for using the power of EVs in the UK, is laying the groundwork now for 2030 when the company estimates that up to 4.5 million new electric vehicles will be connected to the network. Even if just 10% of them participated in the flexibility market it would create an additional 1.3GW of capacity - the equivalent of a nuclear power station.
Sul Alli, director of strategy and customer services at UK Power Networks, said: "Britain is leading the world at harnessing the power of all these electric vehicle batteries that are going to be connected and using them for public good. Three years ago this market didn't exist and now it's offering as much capacity as a gas-fired power station. We're working with some of the most exciting start-ups out there, and we're proving it in the real world. There's a long way to go and no silver bullet, but the way we're using technology and data is going to be a big part of the answer to meeting the challenge of reaching Net Zero."
James Eddison, CTO and co-founder of Octopus Energy, said: "Octopus Energy is committed to make the transition to a green energy system as fast and affordable as possible. To do that, we need to harness the power of consumer energy demand, but so far the potential of household flexibility remains largely untapped. This tender shows that we're entering a new era in energy in which we are smart about the way we utilise the infrastructure in place and the devices connected to it. Time and time again, Octopus Energy and its smart tariff customers have proven that households will shift their energy usage out of peak times if they're incentivised to do so, helping to balance the grid. With this tender UK Power Networks is opening up new markets. Octopus is building on its ability to help customers provide services to the local electricity network and demonstrating how a consumer-led energy system can fast-track us to net zero. Advances in technology on the electricity network mean that electric vehicles can now be harnessed into virtual power stations to help relieve pressure on the network all the way from your neighbourhood streets to a major substation that could be 20 miles or more away."
Another participant in UK Power Networks latest round of flexibility contracts is Ohme, a UK-based company with the ambition to become the world's most trusted smart charging platform. The combination of Ohme's intelligent EV chargers, its mobile app and underlying platform delivers the capability to enable any connected EV to provide flexibility to the network. This means batteries can soak up energy at peak times, without compromising drivers' desired charging schedule, which they can set with ease through the Ohme app. Ohme's ability to communicate directly with drivers, coupled with its technology to turn up and turn down electricity demand at the micro-level, lays the foundations for managing this new world of grid balancing services.
David Watson, CEO and founder at Ohme said: "Ohme's intelligent charging technology harnesses consumer data, energy data and transport data to gain unparalleled insight into actual EV driver behaviour, which has the potential to unlock a whole new world of mass-market flexibility. We want to help create a smart charging system that will nudge consumers to charge at times of peak supply, protecting infrastructure from overload and delivering cheaper charging to drivers. In fact, when renewable energy is at a surplus, our customers can even be paid to charge. Ohme not only make EVs cheaper and simpler to run, but also delivers powerful insights to all players in the EV ecosystem, with the goal of accelerating the renewables revolution."
UK Power Networks is the largest investor in flexible capacity in the UK and is recognised as world-leading within the energy industry, with the company topping the global Smart Grid Index.2
A successful flexibility market should mean consumers seeing lower costs in the future. Investing in flexible energy capacity - where demand and supply is balanced between peak and off-peak periods - can be a lower cost approach than building new infrastructure in the electricity network. UK Power Networks runs an assessment before building any new capacity on the network to see if it would be cheaper to purchase that capacity as a service through its flexibility market.
To support pioneering new technologies, UK Power Networks has awarded several contracts for seven-year terms. This is enabling smaller companies to secure funding to realise their ideas.
Arun Anand, founder and CEO of Electric Miles said: "Thank you to UK Power Networks for trusting in a young startup like Electric Miles by awarding us a follow up to the initial contract with the opportunity to serve customers in higher volumes and more areas. Our Electric Miles app makes it easy for customers to make money from their electric vehicle by participating in flexibility markets. It's essential to have our ears close to the ground to learn from this early experience to deliver a great product that can remove the friction from drivers and support the electricity network at the same time. This project is helping to prove the capability of our platform in the real world."
UK Power Networks will continue to seek out innovative technologies to stimulate and grow the market for energy flexibility and help manage the growth of low carbon technology on the network. A further tendering process for flexibility solutions will begin later this year across dozens more locations, and several tender rounds are planned for 2022.
UK Power Networks is the country's biggest electricity distributor, making sure the lights stay on for more than eight million homes and businesses across London, the South East and the East of England. Network operators aren't the same as energy suppliers; network operators manage local power lines and substations, while energy suppliers sell the electricity that runs through the power lines. UK Power Networks continues to be listed in the Sunday Times' Top 25 Best Big Companies to Work For, and made industry history by becoming first company to win Utility of the Year two years running (2015 and 2016, also 2012).
The company invests more than £600 million in its electricity networks every year, offers extra help to vulnerable customers at times of need, and is undertaking trials to ensure that electricity networks support the transition to a low carbon future. It also moves cables and connects new electricity supplies. If you have a power cut ring 105, see www.ukpowernetworks.co.uk or tweet us @UKPowerNetworks
New contracts awarded by UK Power Networks will introduce 350MW of flexible capacity, on top of the 150MW already commissioned, to help meet the growing demand for energy between now and 2028. The awarding of contracts concludes the UK's largest ever tender for flexibility. The new contracts will benefit customers across London, South East and East of England.
1 Capacity is derived both from borrowing batteries and shifting demand through smart charging where EV drivers are incentivised to consume capacity outside of peak periods using dynamic systems.
Source: UK Power Networks
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